Legislature(2015 - 2016)BUTROVICH 205

03/09/2015 03:30 PM Senate RESOURCES

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03:30:31 PM Start
03:31:00 PM Overview: Wetland Mitigation
04:18:45 PM SB70
05:00:29 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Wetlands Mitigation in Alaska TELECONFERENCED
-- Testimony <Invitation Only> --
Heard & Held
-- Public Testimony --
Scheduled but Not Heard
-- Public Testimony --
<Above Item Removed from Agenda>
Scheduled but Not Heard
<Pending Referral>
-- Public Testimony --
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<Pending Referral>
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 9, 2015                                                                                          
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Cathy Giessel, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator John Coghill                                                                                                            
Senator Peter Micciche                                                                                                          
Senator Bert Stedman                                                                                                            
Senator Bill Stoltze                                                                                                            
Senator Bill Wielechowski                                                                                                       
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
OTHER LEGISLATORS PRESENT                                                                                                     
Senator Click Bishop                                                                                                            
COMMITTEE CALENDAR                                                                                                            
OVERVIEW: WETLANDS MITIGATION                                                                                                   
     - HEARD                                                                                                                    
SENATE BILL NO. 70                                                                                                              
"An  Act relating  to exceptions  from designation  as a  special                                                               
purpose site under  art. VIII, sec. 7 of the  Constitution of the                                                               
State of Alaska  for portions of Denali State  Park, Captain Cook                                                               
State  Recreation Area,  Nancy Lake  State  Recreation Area,  and                                                               
Willow Creek State Recreation Area to allow leasing a right-of-                                                                 
way for a natural gas pipeline."                                                                                                
     - HEARD & HELD                                                                                                             
HOUSE JOINT RESOLUTION NO. 7                                                                                                    
Opposing the proposed designation of an Aleutian Islands                                                                        
National Marine Sanctuary.                                                                                                      
     - SCHEDULED BUT NOT HEARD                                                                                                  
HOUSE JOINT RESOLUTION NO. 8                                                                                                    
Urging the  federal government  to empower  the state  to protect                                                               
the  state's   access  to  affordable  and   reliable  electrical                                                               
     - SCHEDULED BUT NOT HEARD                                                                                                  
HOUSE JOINT RESOLUTION NO. 6                                                                                                    
Supporting the introduction and  enactment of federal legislation                                                               
acknowledging   that  the   federal  government   is  financially                                                               
responsible  under the  Alaska Native  Claims Settlement  Act for                                                               
the remediation of contaminated  land subject to conveyance under                                                               
the Act; urging  the United States Department of  the Interior to                                                               
implement the  six recommendations to  identify and clean  up the                                                               
Alaska Native Claims  Settlement Act lands in its  1998 report to                                                               
the  United States  Congress;  and urging  the  President of  the                                                               
United States  and the  United States  Congress to  remediate and                                                               
make free from  pollutants lands in the state  conveyed under the                                                               
Alaska Native Claims Settlement Act.                                                                                            
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  70                                                                                                                  
SHORT TITLE: GAS PIPELINE RIGHT-OF-WAY; PARKS;REFUGES                                                                           
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
03/06/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/06/15       (S)       RES, FIN                                                                                               
03/09/15       (S)       RES AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
SARA LONGAN, Executive Director                                                                                                 
Office of Project Management and Permitting (OPMP)                                                                              
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented  overview of wetlands compensatory                                                             
mitigation  and DNR's  efforts to  better understand  the federal                                                               
decision  making process.  Evaluated the  state's options  to get                                                               
more involved with wetlands mitigation.                                                                                         
BEN ELLIS, Director                                                                                                             
Division of Parks and Outdoor Recreation                                                                                        
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Commented on SB 70.                                                                                      
DON PERRIN, Acting Coordinator                                                                                                  
State Pipeline Coordinator's Office                                                                                             
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Commented on SB 70.                                                                                       
FRANK RICHARDS, Vice President                                                                                                  
Engineering and Program Management                                                                                              
Alaska Gasline Development Corporation (AGDC)                                                                                   
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Available to answer questions on SB 70.                                                                  
MIKE THOMPSON, Environmental Regulatory and Lands Manager                                                                       
Alaska Stand Alone Pipeline (ASAP)                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions on SB 70.                                                                             
JOHN HUTCHINSON, Assistant Attorney General                                                                                     
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered legal questions regarding SB 70.                                                                
ACTION NARRATIVE                                                                                                              
3:30:31 PM                                                                                                                    
CHAIR  CATHY   GIESSEL  called  the  Senate   Resources  Standing                                                             
Committee meeting  to order at 3:30  p.m. Present at the  call to                                                               
order  were   Senators  Costello,  Coghill,  Stoltze   and  Chair                                                               
^Overview: Wetland Mitigation                                                                                                   
                  Overview: Wetland Mitigation                                                                              
3:31:00 PM                                                                                                                    
CHAIR GIESSEL  announced the  first order of  business to  be the                                                               
overview of wetlands mitigation in Alaska.                                                                                      
She recognized Senator Bishop in the audience.                                                                                  
3:31:18 PM                                                                                                                    
SENATOR MICCICHE joined the committee.                                                                                          
SARA  LONGAN, Executive  Director, Office  of Project  Management                                                               
and  Permitting (OPMP),  Department of  Natural Resources  (DNR),                                                               
Anchorage,  Alaska,   said  she  would  be   discussing  wetlands                                                               
compensatory mitigation  and DNR's  efforts to  better understand                                                               
the  federal decision  making  process as  well  as evaluate  the                                                               
state's options to get more involved with wetlands mitigation.                                                                  
MS. LONGAN began  with a general overview  of federal regulations                                                               
that  require wetlands  compensatory  mitigation.  The U.S.  Army                                                               
Corps  of  Engineers  (USACE) is  responsible  for  administering                                                               
Section  404 of  the Clean  Water Act,  one of  the multiple  and                                                               
major permits necessary specifically  to place fill into wetlands                                                               
or waters of  the United States. In 2008,  the U.S. Environmental                                                               
Protection Agency  (EPA) developed regulations  commonly referred                                                               
to  as the  Wetlands Mitigation  Rule. The  ACE must  comply with                                                               
these  regulations and  the EPA  maintains veto  authority. While                                                               
the  ACE  leads this  effort,  it  is  in full  consultation  and                                                               
coordination with EPA and other federal agencies.                                                                               
Project applicants  go through great efforts  to minimize impacts                                                               
to wetlands and  aquatic resources. They are  required to produce                                                               
aquatic  site assessments  (ASA),  very recently  referred to  as                                                               
wetlands  functional analyses.  This  science  is very  critical,                                                               
because the ACE uses it  to determine the appropriate category of                                                               
wetland  impacts for  purposes  of assigning  a mitigation  ratio                                                               
that can be translated into  an in-lieu mitigation fee (ILF). She                                                               
observed that the regulatory  guidance particularly regarding the                                                               
parameters  necessary to  fulfill these  ASAs have  been changing                                                               
over  the  last   few  years  and  total   mitigation  costs  are                                                               
MS. LONGAN  said project applicants  must offset  the unavoidable                                                               
impacts  to wetlands  and aquatic  resources and  that there  are                                                               
various ways to achieve those goals:                                                                                            
1. Restoration                                                                                                                  
2. Enhancement                                                                                                                  
3. Creation                                                                                                                     
4. Preservation                                                                                                                 
There are three mechanisms to do that:                                                                                          
1. Mitigation bank credits                                                                                                      
2. In-lieu fee (ILF) program credits                                                                                            
3. Permittee-responsible mitigation, watershed approach                                                                         
It is  required and  preferred that  these three  preferences and                                                               
options are  conducted in  the same  watershed where  the impacts                                                               
are taking place.                                                                                                               
3:35:17 PM                                                                                                                    
SENATOR  COSTELLO asked  where  in the  process  of the  National                                                               
Environmental   Policy  Act   (NEPA)  and   environmental  impact                                                               
statement  (EIS) the  discussion  about the  scope of  mitigation                                                               
MS.  LONGAN  answered  late  in   the  process  at  end  of  NEPA                                                               
SENATOR STOLTZE  asked for examples of  enhancements. For example                                                               
are  the  extensive  culvert  repairs  done  statewide  for  fish                                                               
habitat and  tsunami debris cleanup, which  didn't even originate                                                               
here, comparable mitigation measures?                                                                                           
MS. LONGAN answered  that it's on a case by  case basis under the                                                               
ACE purview  in consultation  with the EPA.  DNR is  engaging now                                                               
and  more  consistently  participating  in  those  conversations,                                                               
because they tend to agree  with him that culvert replacements or                                                               
debris  contamination site  cleanup should  qualify for  wetlands                                                               
compensatory mitigation.                                                                                                        
SENATOR STOLTZE  said he  didn't see the  nexus between  the good                                                               
idea and some type of action  and asked if the state agency needs                                                               
more assistance in engaging in  the process. Is more coordination                                                               
between the borough and state entities needed?                                                                                  
MS. LONGAN answered that her  presentation would describe efforts                                                               
under way at DNR to actually  establish and seek its own approval                                                               
from the ACE to run its own mitigation program.                                                                                 
3:38:10 PM                                                                                                                    
SENATOR STEDMAN joined the committee.                                                                                           
MS. LONGAN  described a mitigation  bank as a wetlands  area that                                                               
has been  restored, established,  enhanced or preserved  then set                                                               
aside to  be used to  offset unavoidable impacts.  Upon approval,                                                               
permittees  purchase  credits from  the  bank  based on  wetlands                                                               
functions and  number of acres  of restored. The  mitigation bank                                                               
sponsor is  responsible for the  success of the  mitigation plan.                                                               
Offsite mitigation is allowed.                                                                                                  
Under  the  in-lieu fee  program  (ILF),  the permittee  provides                                                               
funds to an in-lieu fee  mitigation sponsor (non-profit or public                                                               
agency) that  are used  to build  and maintain  mitigation sites.                                                               
The success  of the mitigation  plan relies upon the  ILF sponsor                                                               
and  mitigation typically  occurs "off-site."  The difference  is                                                               
that mitigation occurs typically after a project is permitted.                                                                  
SENATOR  COGHILL said  she didn't  have  to answer  now, but  the                                                               
first  thing that  came  to  his mind  was  accountability for  a                                                               
mitigation sponsor.                                                                                                             
MS. LONGAN said  there is another option for  a project applicant                                                               
(the  permittee)  to  develop  and seek  approval  of  their  own                                                               
mitigation plan.  This can be  done on-site or off-site.   Simple                                                               
arithmetic.  The  higher the  mitigation  number  the larger  the                                                               
total mitigation costs.                                                                                                         
She noted that OPMP is  hearing mainly from the mining companies,                                                               
but perhaps others are impacted,  but since the implementation of                                                               
the  2008  rule, permittee  responsible  is  occurring much  less                                                               
often in Alaska.                                                                                                                
She explained  that the  Mitigation Ratio  is an  aggregate index                                                               
used to  calculate the gain and  loss of wetlands to  be adjusted                                                               
based on the  functions and qualities of those  wetlands. This is                                                               
simple  arithmetic: the  higher  the  wetlands mitigation  ratios                                                               
are,  the  greater  number  of acres  are  necessary  for  offset                                                               
purposes. Therefore,  also, is the higher  total mitigation cost.                                                               
In Alaska, mitigations ratios typically  range from 1:1 up to 3:1                                                               
depending on wetland category and  type of mitigation. Ratios for                                                               
preservation, for  example, will  be set differently  compared to                                                               
restoration or enhancement.                                                                                                     
MS. LONGAN  said some mitigation ratios  are 10:1 and there  is a                                                               
list of factors  that federal agencies may use  to increase these                                                               
mitigation ratios.  That can include  whether the  wetlands being                                                               
impacted  or  the  aquatic  resources   are  used  to  support  a                                                               
threatened  or  endangered species.  If  a  federal agency  deems                                                               
those  same resources  as very  rare, again  there is  a list  of                                                               
criteria  that can  offer  them the  opportunity  to have  higher                                                               
mitigation ratios.                                                                                                              
3:41:25 PM                                                                                                                    
SENATOR COGHILL  said his  understanding is  that those  are more                                                               
MS.  LONGAN  responded that  this  is  one  of the  reasons  that                                                               
compelled DNR  and OPMP  to pay closer  attention to  how federal                                                               
decisions were being  made. That is why she can  report that over                                                               
the  last year  and a  half, OPMP  has gone  through some  pretty                                                               
resource-intense  efforts to  get more  engaged with  the federal                                                               
agencies. They  do have concerns when  perhaps subjective federal                                                               
decisions are  made that are  increasing these ratios as  high as                                                               
10:1 or higher and want to  understand what science is being used                                                               
to make those determinations.                                                                                                   
SENATOR COGHILL asked if somewhere  along the line she would give                                                               
them a  criteria baseline  for things  the department  would look                                                               
MS. LONGAN  replied that they could  do that, but it  is early in                                                               
the process.                                                                                                                    
3:42:42 PM                                                                                                                    
SENATOR COSTELLO  asked where the  authority came from  to change                                                               
the  criteria. Was  it  from Congress  or  were federal  agencies                                                               
taking things  into their  own hands and  providing for  no voice                                                               
from the state?                                                                                                                 
MS.  LONGAN  answered  that  the  mitigation  ratio  criteria  is                                                               
actually listed in the 2008 federal rule.                                                                                       
SENATOR MICCICHE  said Alaska has  174 million acres  of wetlands                                                               
and  asked  if Alaska's  wetlands  are  treated differently  than                                                               
other states with less wetlands remaining.                                                                                      
MS. LONGAN  replied that  DNR's observation  is no  and explained                                                               
that   a  1994   federal  report   called  out   specific  unique                                                               
characteristics  of Alaska  that  the federal  agencies have  not                                                               
been  taking   into  consideration  as  they   have  made  recent                                                               
mitigation decisions.                                                                                                           
SENATOR  STOLTZE asked  if  there  is an  index  of formulas  and                                                               
ratios that one could look at.                                                                                                  
MS.  LONGAN  replied   that  is  precisely  what   DNR  wants  to                                                               
understand  better. They  have  looked at  ratios  used in  other                                                               
states  in the  Lower 48  and she  will report  on how  they make                                                               
those determinations as well as how they establish fees.                                                                        
SENATOR  STEDMAN  said  some constituents  had  complained  about                                                               
running into the  mitigation issues when trying  to develop small                                                               
areas of four or five acres.                                                                                                    
3:45:13 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
3:46:01 PM                                                                                                                    
MS. LONGAN said  she would discuss that, but first  she wanted to                                                               
describe how  the 2008 mitigation  rule was developed and  why it                                                               
is difficult  to implement  in Alaska.  When the  current federal                                                               
"No  Net Loss  Policy"  - which  states that  where  there is  an                                                               
impact  there  shall be  no  net  loss  of wetlands  and  aquatic                                                               
resources -  was being developed,  Alaska was not  experiencing a                                                               
rapid decline of wetlands as was the case in the Lower 48.                                                                      
The Alaska Wetlands Initiative compelled  the federal agencies to                                                               
produce   a   report   in  1994   that   described   the   unique                                                               
characteristics of Alaska's wetlands.  This report concluded that                                                               
a  flexible regulatory  approach was  necessary, emphasizing  the                                                               
"practicability" and  "flexibility" of the regulatory  program to                                                               
reflect  circumstances   in  Alaska.   This  initiative   is  not                                                               
currently in effect.                                                                                                            
3:47:01 PM                                                                                                                    
MS. LONGAN said  Alaska has 174 million acres, 43  percent of its                                                               
land mass,  of wetlands. This  means limited lands  are available                                                               
that would be eligible for  wetland compensatory mitigation. It's                                                               
difficult  to comply  with the  rule, because  wetlands can  only                                                               
qualify to be used for mitigation  if there is an imminent threat                                                               
to them.  Because of our  pristine nature and small  inventory of                                                               
previously  disturbed wetlands,  it is  difficult to  have enough                                                               
wetland  credits  eligible and  compliant  with  the rule.  Other                                                               
limiting  factors unique  to Alaska  are that  there is  only one                                                               
federally  approved  ILF  compensatory  mode  mitigation  program                                                               
sponsor for projects proposed on the  Arctic Slope that has a lot                                                               
of oil and gas and resource development activities.                                                                             
She said the  ILF program sponsors must  produce an "instrument,"                                                               
a report describing their methodologies  in terms of how they are                                                               
to manage their ILF program. This  report is submitted to the ACE                                                               
ultimately for  approval. Some  of the  Alaska ILF  programs will                                                               
disclose what their cost per  acre include. Some examples of cost                                                               
per acre credits in Alaska can  range from $44,000 up to $125,000                                                               
per  acre, the  larger number  more typically  seen in  southeast                                                               
portions of the state. These  costs are established solely by the                                                               
ILF program sponsor  and they are driven by the  type of wetland,                                                               
the value, and the geographic area.                                                                                             
OPMP investigated what  other ILF programs are like  in the Lower                                                               
48 and readily  admits that the costs are  sometimes much smaller                                                               
than  what  states  like  New  Jersey,  Florida,  or  others  are                                                               
charging. OPMP  is hearing from  the operators  that collectively                                                               
an increase of the mitigation  ratios as well as significant cost                                                               
per  acre is  burdensome in  Alaska  because of  its large  size.                                                               
There is very  little existing infrastructure in  some regions of                                                               
the state,  so the  proximal distance  for project  applicants to                                                               
get  to  their  project  site collectively  with  all  the  other                                                               
factors, raise the  chances that these mitigation  costs will run                                                               
the risk of making a  once commercially viable project perhaps no                                                               
longer economically feasible.                                                                                                   
MS. LONGAN  said there are  three ILF  programs and one  is being                                                               
proposed;  there  are  five  mitigation   banks  and  four  being                                                               
proposed in Alaska.                                                                                                             
3:50:02 PM                                                                                                                    
SENATOR  COSTELLO mentioned  that  ConocoPhillips' Moose's  Tooth                                                               
project  is being  required to  mitigate "travesty  wells," which                                                               
are  solely   the  responsibility   and  cause  of   the  federal                                                               
government and asked if this is  the first time a private company                                                               
is being required to mitigate on federally owned land.                                                                          
MS.  LONGAN  answered  that  it  is  the  first  case  in  OPMP's                                                               
experience,  but it  was placed  on hold  as the  Bureau of  Land                                                               
Management  (BLM) is  now undertaking  the effort  to develop  an                                                               
NPRA  regional mitigation  plan. Today  she wanted  to underscore                                                               
that she  is talking  about a  very specific  regulatory function                                                               
for wetlands compensatory mitigation.  Equally important and what                                                               
happens through  the NEPA process  is the capital  "M" mitigation                                                               
which means that project applicants  are mitigating for all other                                                               
impacts:  from  subsistence  to  wildlife  and  air  quality.  At                                                               
Moose's Tooth,  DNR saw those  two and the  wetlands compensatory                                                               
mitigation  were getting  conjoined in  a way  that OPMP  perhaps                                                               
felt that  some "double-dipping" was occurring.  The BLM listened                                                               
to this  concern, but it's another  reason why DNR is  wanting to                                                               
get more involved.                                                                                                              
SENATOR MICCICHE  asked if anyone had  litigated the compensatory                                                               
program as a taking on patented  land anywhere in the U.S. before                                                               
the Clean Water Act.                                                                                                            
MS.  LONGAN said  she hadn't  heard  of that  occurring, but  she                                                               
would look into it.                                                                                                             
SENATOR  STEDMAN asked  for a  list of  properties in  mitigation                                                               
banks, because  there is  an interest in  changing the  status if                                                               
they  can. The  area he  represents  is a  rainforest and  people                                                               
don't have the capital to litigate  this and the fee is viewed as                                                               
extortion. He asked  what happens to the private  land owners who                                                               
inadvertently breach this rule.                                                                                                 
MS.  LONGAN said  she would  investigate that  issue further  for                                                               
3:56:03 PM                                                                                                                    
SENATOR STEDMAN asked if Native  corporation lands come under the                                                               
404 Permit process also.                                                                                                        
MS. LONGAN answered yes. She  explained that approximately a year                                                               
and a  half ago,  OPMP was  asked to  creatively think  about the                                                               
problem  and   to  identify  goals  for   solutions.  They  asked                                                               
themselves  how  DNR  or  anyone could  get  more  involved  with                                                               
wetland mitigation.  A limiting  factor is that  so few  lands in                                                               
Alaska are privately owned.                                                                                                     
However, everyone is  familiar with the fact that  the state owns                                                               
and  manages a  very large  portfolio of  acreage throughout  the                                                               
state and  this may be an  opportunity. They asked the  ACE about                                                               
suitability and implementation questions  and they have been very                                                               
supportive. In fact, they have  been collaborating on identifying                                                               
and   developing   an    Alaska-specific   wetland   compensatory                                                               
mitigation program.                                                                                                             
According  to the  ACE, the  requirements  for DNR  to develop  a                                                               
prospectus  and submit  it for  approval to  run a  state-managed                                                               
umbrella  in  lieu  fee  program  (ILF). To  do  this,  DNR  must                                                               
inventory its state  lands with the best  science and information                                                               
available.  This  can  be   done  using  multi-layered  screening                                                               
criteria and geographic information  system (GIS) audit developed                                                               
in collaboration with mitigation specialists.                                                                                   
3:59:00 PM                                                                                                                    
She  explained that  the federal  agencies have  had a  statewide                                                               
interagency review  team, the group  that evaluates  the existing                                                               
ILF program and mitigation banks  that are seeking approval. This                                                               
is paid back significant dividends,  because it has allowed OPMP,                                                               
DNR  and other  state agencies  a seat  at the  table when  those                                                               
conversations are being had.                                                                                                    
As  soon  as  OPMP  was  learning  more  about  the  compensatory                                                               
wetlands  mitigation process,  they realized  that although  they                                                               
are part  of the NEPA  conversation throughout, they  never heard                                                               
about  the specific  regulatory function  making decisions  about                                                               
wetlands  compensatory mitigation.  She thanked  the ACE  and the                                                               
BLM,  because   in  this  example   OPMP  suggested   having  the                                                               
conversation as  part of  NEPA. That, in  fact, occurred  for the                                                               
Greater Moose's Tooth project.                                                                                                  
She said the  state tries to partner with  the federal government                                                               
where it makes sense to  develop a general permit. Companies have                                                               
been  asking  for  more   consistency  in  wetlands  compensatory                                                               
mitigation. Where  this goal hasn't  been achieved, at  least the                                                               
federal and state agencies are having the conversation.                                                                         
A  major part  of seeking  approval from  the Corps  of Engineers                                                               
will be  an inventory of  state lands.  A screen shot  of ongoing                                                               
efforts revealed  DNR mapping using sophisticated  tools in areas                                                               
of the state  where just a few years ago  they weren't adequately                                                               
mapped. This is  a key part if  the state is to  be successful in                                                               
seeking approval from the ACE to develop and ILF program.                                                                       
SENATOR COGHILL  asked if the  federal government had  been doing                                                               
any GIS mapping on BLM and forestry lands.                                                                                      
MS.  LONGAN  replied  that  mapping is  taking  place  among  the                                                               
federal agencies, particularly BLM, but  she didn't know how much                                                               
progress had been made on any particular parcel.                                                                                
4:01:18 PM                                                                                                                    
SENATOR  COGHILL  asked  if  the  wetland  mitigation  ratios  on                                                               
federal lands are more generous.                                                                                                
MS. LONGAN answered  that as of about two years  ago, OPMP didn't                                                               
know the answer  to that, and that is why  state participation on                                                               
the State  Interagency Review Team  is so  important. Restoration                                                               
projects take  place on federal  lands, but she thought  that the                                                               
mitigation  uses  private  lands for  preservation  purposes  and                                                               
didn't know how  much active mitigation banking  was taking place                                                               
on federal lands.                                                                                                               
4:06:00 PM                                                                                                                    
She said  the DNR and the  state can help by  offering options to                                                               
wetlands compensatory  mitigation. Things  like the  2008 federal                                                               
rule listing  the advantages of having  non-profit and government                                                               
agencies  act  as  third  party mitigation  sponsors  is  in  the                                                               
state's  favor, because  profit isn't  driving the  necessity for                                                               
running  these  programs.  Thirty-one other  states  are  already                                                               
involved in  mitigation, 25  states run  mitigation banks  and 12                                                               
states run ILF programs.                                                                                                        
She  said   that  DEC   has  been   taking  advantage   of  grant                                                               
opportunities and  that EPA's  wetland program  development grant                                                               
funding,  although small,  won't be  enough to  cover all  of the                                                               
efforts necessary  for the state to  seek approval to run  an ILF                                                               
program,  but  it's  helpful. Qualified  recipients  can  receive                                                               
grant money to develop a  comprehensive monitoring and assessment                                                               
program,  improve the  effectiveness of  compensatory mitigation,                                                               
or  refine  the protection  of  vulnerable  wetlands and  aquatic                                                               
resources, very important principles to  DNR, DEC and ADF&G. They                                                               
feel they have  a good sense of how this  is impacting the larger                                                               
scale resource  development, but  they want to  know how  it will                                                               
impact the little guys.                                                                                                         
SENATOR  STEDMAN  said he  knows  that  two of  his  constituents                                                               
aren't going  to subdivide  anymore, because  it's not  worth the                                                               
headaches.  He wanted the state to  be the sole holder of all the                                                               
mitigation banks  and look  at the  feasibility of  absorbing the                                                               
current ones and  to be involved in the payment  program, too. If                                                               
the  federal government  insists that  it  stays the  way it  was                                                               
10,000  years ago,  so be  it, but  the state  should be  the one                                                               
holding the land.                                                                                                               
4:09:45 PM                                                                                                                    
MS.  LONGAN responded  that none  of  the Lower  48 programs  are                                                               
state-owned. Where the  state was involved in the  Lower 48 other                                                               
privately-owned  ILF   or  mitigation  banks  were   very  likely                                                               
SENATOR COGHILL said  that there was less than  2 percent private                                                               
property in  Alaska and  he guessed the  Native lands  would have                                                               
trust issues.  When it comes to  federal land, would that  be put                                                               
into private  holdings and if  they don't  do that why  can't the                                                               
state keep the title under a wetland agreement?                                                                                 
MS.  LONGAN  felt  confident  that the  state  could  raise  that                                                               
interest to  the ACE that has  been collaborating so far  to help                                                               
achieve those goals.                                                                                                            
SENATOR  COGHILL  asked  if  the   Corps  had  taken  lands  into                                                               
mitigation  outside   of  a  watershed,  because   everything  is                                                               
"greenfield"  in Alaska  and staying  within  a single  watershed                                                               
area is  going to be very  difficult. Their own study  might show                                                               
that there has to be some flexibility.                                                                                          
SENATOR COSTELLO asked the status  of the state's mapping efforts                                                               
and the cost.                                                                                                                   
MS. LONGAN answered  that to get approval to run  an ILF program,                                                               
the state would need two  years of mapping information available,                                                               
but if they continue  on the path they are on,  they could have a                                                               
prospectus  submitted to  the Corps  of Engineers  within six  to                                                               
eight months.                                                                                                                   
SENATOR  COSTELLO asked  if that  timeline is  achievable in  the                                                               
current budget environment.                                                                                                     
4:14:41 PM                                                                                                                    
MS. LONGAN answered that the funding  that OPMP has had up to now                                                               
has  made the  efforts to  date possible.  OPMP receives  program                                                               
receipt  money and  funds from  outside sectors.  They are  doing                                                               
well  with this  funding, but  have not  secured funding  for the                                                               
next fiscal year. The project applicants  are the ones who have a                                                               
predominant concern in terms of  the increasing mitigation costs.                                                               
She encouraged them to read the 1994 Wetland Initiative Report.                                                                 
4:15:47 PM                                                                                                                    
SENATOR COGHILL said that he  and Senator Bishop had been working                                                               
together on  looking for a way  to encourage the state  to be the                                                               
recipient of lands in mitigation.  However, the state should know                                                               
what the  federal government does  with its lands before  it asks                                                               
to do  things and asked  the timeframe of understanding  what the                                                               
federal management is going to be doing.                                                                                        
MS. LONGAN  answered she would  get that information to  him very                                                               
4:17:18 PM                                                                                                                    
SENATOR STEDMAN  asked the  cost for  the Southeast  Region, both                                                               
public and private, if it's available.                                                                                          
MS. LONGAN answered that she would get those estimates for him.                                                                 
CHAIR GIESSEL thanked Ms. Longan for her presentation                                                                           
         SB  70-GAS PIPELINE RIGHT-OF-WAY;PARKS;REFUGES                                                                     
4:18:45 PM                                                                                                                    
CHAIR GIESSEL  announced SB  70 to be  up for  consideration. She                                                               
invited Mr. Ellis and Mr. Perrin to the table.                                                                                  
4:19:34 PM                                                                                                                    
BEN ELLIS,  Director, Division of  Parks and  Outdoor Recreation,                                                               
Department of Natural Resources  (DNR), Juneau, Alaska, explained                                                               
that SB 70  will allow a gasline to go  through four Alaska state                                                               
parks. He explained  that when recreational land  has been pulled                                                               
out  of the  general state  land  the multipurpose  use has  been                                                               
replaced by a specific use, in  this case it would be recreation.                                                               
Because of the  difference between Title 38  lands (general state                                                               
land administered by the Division  of Mining, Land and Water) and                                                               
Title 41 land (state park lands)  he does not have the ability to                                                               
do any type  of long-term lease on Title 41  land. The concept of                                                               
title 41 is  to lease for short  periods of time of  four or five                                                               
years to  allow a  concession or something  similar to  occupy an                                                               
area; Title 41 lands are  not designed for long-term leasing that                                                               
the right-of-way for  a pipeline would need.  This bill addresses                                                               
that by allowing the four units  mentioned to be used in a right-                                                               
of-way situation while still being managed for park intent.                                                                     
4:21:48 PM                                                                                                                    
DON  PERRIN,  Acting  Coordinator, State  Pipeline  Coordinator's                                                               
Office, Department  of Natural Resources  (DNR), said  the intent                                                               
of this bill  is to allow for a pipeline  corridor through Denali                                                               
State Park  and three other  identified state  recreational areas                                                               
that are all under Title 41.                                                                                                    
He said the  State Pipeline Coordinator issued  a 38.35 right-of-                                                               
way  (ROW) lease  to the  Alaska Gasline  Development Corporation                                                               
(AGDC) in  2011. Presently it  is a dis-contiguous  lease because                                                               
of these Title 41 lands. This  bill would allow them to apply the                                                               
Right-of-Way  Leasing  Act  and  have a  contiguous  38.35  lease                                                               
through state lands.                                                                                                            
He said  the primary objective  of the bill authorizes  the lease                                                               
under  the  Right-of-Way  Leasing   Act.  It  requires  that  the                                                               
corridor  be managed  as  park land  and  recreation areas  until                                                               
leased  under   38.35  and  then   returned  to  park   land  and                                                               
recreational  areas  upon  termination  of  the  lease.  It  also                                                               
provides supplemental  requirements to reserve  traditional means                                                               
of  public access  and minimizes  the impact  of the  pipeline on                                                               
specific  values of  the park  and recreation  areas. This  means                                                               
that the State Pipeline Coordinator's  Office would work with the                                                               
Division  of  Parks  and  Outdoor  Recreation  to  formulate  and                                                               
establish  stipulations and  requirements of  the lease  that are                                                               
intended  to protect  the park  values  of those  areas. It  also                                                               
clarifies that it is in  the DNR commissioner's power to delegate                                                               
condemnation authority  to a  lessee that  does not  apply within                                                               
these park area  boundaries. In other words,  they cannot condemn                                                               
this land for a pipeline.                                                                                                       
Finally, Mr. Perrin  explained that SB 70 would  require that the                                                               
gas pipeline lease be issued before January 1, 2020.                                                                            
MR. ELLIS  explained that the  bill is needed  so there can  be a                                                               
right-of-way  lease through  the  four state  park units:  Denali                                                               
State  Park and  the recreational  areas of  Willow Creek,  Nancy                                                               
Lake, and Captain Cook State Park.                                                                                              
4:25:29 PM                                                                                                                    
MR. PERRIN said one might ask  why this bill does not include the                                                               
state  game refuges.  They believe  that  the 38.35  Right-of-Way                                                               
Leasing Act  does apply  in those areas  and therefore  they were                                                               
not included in  the bill. Permitting for  geotechnical and other                                                               
field  work that  will  support the  final  application is  being                                                               
conducted in those areas, as  well. So, after discussion with the                                                               
Department of  Law, they didn't  feel they needed to  include the                                                               
state game refuges.  In regards to the two  gasline projects, the                                                               
ASAP and AKLNG,  the corridor that would be  created through this                                                               
bill is  basically what would be  granted to AGDC upon  review of                                                               
their amended application.                                                                                                      
4:27:36 PM                                                                                                                    
In 2012  the Corps of Engineers  finalized their EIS and  the ROW                                                               
was granted. It  follows the DOTPF ROW along  the Denali Highway,                                                               
but  because  it  was  through Title  41  lands,  the  department                                                               
determined the ROW Leasing Act didn't apply there.                                                                              
In 2013, the AKLNG project came  into being and the engineers for                                                               
both   projects  began   working   together  in   terms  of   the                                                               
geotechnical work needed  for the ROW. This means  core holes are                                                               
being drilled to assess the underlying  soils to come up with the                                                               
best ROW.  While it  is a  little early for  AKLNG to  finalize a                                                               
ROW, they  believe this corridor  will suffice for  both projects                                                               
and any  gasline project. Both projects  are currently conducting                                                               
field work along  that corridor to gather  information that would                                                               
support an application at some point.                                                                                           
4:28:57 PM                                                                                                                    
MR.  ELLIS said  they had  an organizational  meeting with  field                                                               
workers and this Wednesday the first work will begin.                                                                           
SENATOR WIELECHOWSKI asked  how confident he is that  this is the                                                               
line the "Big Three" are building.                                                                                              
MR. PERRIN answered  that their confidence level is  based on the                                                               
field work that is currently  occurring. They won't know what the                                                               
final  alignment is  until  FERC has  completed  its process  for                                                               
SENATOR WIELECHOWSKI asked if it's better  to pass this now or to                                                               
MR. PERRIN answered if they could  pass it now, it is enough land                                                               
to accommodate either project.                                                                                                  
CHAIR GIESSEL  said asked how  much wiggle  room there is  if the                                                               
line moves.                                                                                                                     
MR.  PERRIN answered  there  is a  significant  amount of  wiggle                                                               
room,  although the  ASAP  project could  end  up with  something                                                               
other than the line.                                                                                                            
SENATOR WIELECHOWSKI asked how large the easement is.                                                                           
4:31:44 PM                                                                                                                    
FRANK   RICHARDS,  Vice   President,   Engineering  and   Program                                                               
Management,  Alaska   Gasline  Development   Corporation  (AGDC),                                                               
Anchorage, Alaska, invited Mike Thompson to answer it.                                                                          
MIKE  THOMPSON,  Environmental   Regulatory  and  Lands  Manager,                                                               
Alaska Stand  Alone Pipeline  (ASAP) Project,  Anchorage, Alaska,                                                               
answered  that they  are looking  at 120  foot easement  for both                                                               
construction and operations and a  300 foot buffer on both sides;                                                               
so a  total of 750  feet. Any  quarter section that  touches that                                                               
buffer within 300  feet of that buffer was  incorporated into the                                                               
corridor  they are  discussing right  now. A  quarter section  is                                                               
about  1320 feet  by  1320  feet. This  is  a fairly  significant                                                               
buffer  and ASAP's  engineering  team said  it  would meet  their                                                               
SENATOR COSTELLO reminded  them of the Creamer's  Field issue and                                                               
asked what  assurances the legislature has  that the descriptions                                                               
are correct.                                                                                                                    
4:37:06 PM                                                                                                                    
MR. ELLIS  answered that this  is the description that  they feel                                                               
assured with, but there may be modifications to it.                                                                             
CHAIR  GIESSEL   asked  Mr.  Richards   if  these   are  accurate                                                               
descriptions of these properties.                                                                                               
4:38:20 PM                                                                                                                    
MR. RICHARDS  said the  land descriptions  in Section  1 actually                                                               
came  from AGDC.  The reason  they are  comfortable with  this is                                                               
because  it  provides  a  sufficient   amount  of  area  to  make                                                               
modifications  as they  work  with their  partners,  AKLNG, on  a                                                               
common alignment.                                                                                                               
SENATOR  WIELECHOWSKI   asked  how  750  feet   compares  to  the                                                               
TransAlaska Pipeline System  (TAPS) buffer and if  there would be                                                               
public access through this corridor.                                                                                            
MR.  ELLIS answered  that they  would envision  working with  the                                                               
least impact  to the area  and manage that  through stipulations,                                                               
and it would still be open for people to cross.                                                                                 
4:41:17 PM                                                                                                                    
SENATOR MICCICHE  pointed out  that language on  page 4,  line 9,                                                               
would reserve  uses for typical use  as opposed to leaving  it up                                                               
to ROW law.                                                                                                                     
SENATOR COSTELLO  asked what changes  Mr. Ellis  was anticipating                                                               
and how they related to HB 139.                                                                                                 
MR. ELLIS  replied that his earlier  comment was more in  a small                                                               
sense of  movement. In  other words,  the ROW  line they  see now                                                               
will not be the  final ROW line, but he was  confident it will be                                                               
within the 750 foot ROW easement that this would grant.                                                                         
He said they  began reviewing HB 139 on Friday  and couldn't do a                                                               
comparison at this time, but it will need to be done.                                                                           
SENATOR  STOLTZE asked  if he  thought it  would have  de minimis                                                               
consequences for this project.                                                                                                  
MR. ELLIS answered  that one of the largest  differences he could                                                               
see  offhand  is   that  HB  139  includes   refuges  within  the                                                               
description.  He would have to  defer to the Alaska Department of                                                               
Fish and Game or the Department of  Law as to whether it needs to                                                               
be in there.                                                                                                                    
MR. PERRIN added  that HB 139 is still being  reviewed, but it is                                                               
exclusive to  AGDC and  the ASAP  project and  not a  pipeline in                                                               
CHAIR  GIESSEL  said  this  bill  would be  held  over  and  that                                                               
information should  be available for  the next hearing.  They are                                                               
pretty concerned that parts won't be left out again.                                                                            
4:46:41 PM                                                                                                                    
SENATOR WIELECHOWSKI asked  if there were any  impacts to hunting                                                               
or the ability to use firearms.                                                                                                 
MR. ELLIS answered that would  definitely be a negative impact on                                                               
hunting and using firearms near the corridor.                                                                                   
SENATOR WIELECHOWSKI asked  if he saw any  businesses being taken                                                               
by eminent domain with passage of this bill.                                                                                    
MR. ELLIS answered no, but that  is a question for the Department                                                               
of Law.                                                                                                                         
4:48:00 PM                                                                                                                    
JOHN HUTCHINSON,  Assistant Attorney  General, Department  of Law                                                               
(DOL),  Juneau, Alaska,  said the  final  question about  eminent                                                               
domain is  one for someone  involved with the  pipeline projects.                                                               
There are several  private inholdings within the  state parks and                                                               
the question is  if that alignment go through  a private holding.                                                               
The bill requires the state to  exercise eminent domain but it is                                                               
not actually  authorized in  several of the  parks; the  state is                                                               
required to  purchase land  rather than  take it  through eminent                                                               
domain. It's unlikely  that there will be any  takings within the                                                               
parks using eminent domain.                                                                                                     
He also  clarified that the  corridor identified in this  bill is                                                               
not actually  the final  ROW; it  is a  corridor of  land through                                                               
which  leasing  would be  authorized.  The  legislature would  be                                                               
giving  back to  DNR the  power to  authorize at  least somewhere                                                               
within  this corridor  the final  construction corridor  that Mr.                                                               
Thompson was  talking about,  which would  be some  small segment                                                               
within the legal description.                                                                                                   
He  said  the  Talerico  bill   takes  a  different  approach  in                                                               
authorizing  leasing  throughout  the   park;  there  is  no  set                                                               
SENATOR WIELECHOWSKI  asked which approach was  preferable from a                                                               
legal standpoint.                                                                                                               
MR.  HUTCHINSON   answered  that  was  a   policy  question.  The                                                               
legislature is authorized  to open this land for  leasing and the                                                               
governor's bill  takes a more minimalist  approach in identifying                                                               
a corridor within  which a lease is authorized to  be issued. The                                                               
downside to  that is that  there is some uncertainty  about where                                                               
the pipeline  will finally cross.  The upside is that  the entire                                                               
park is not being opened to ROW leasing.                                                                                        
SENATOR  COSTELLO said  this  sets a  general  guideline for  the                                                               
area, but would  this legislation have to be  replaced or changed                                                               
at some  point. Is it just  a building block for  the pipeline at                                                               
which some point they will know the specific route?                                                                             
MR. HUTCHINSON  answered no;  the legislature  would not  have to                                                               
come back. This sets an  area through which leasing is authorized                                                               
for  10  years  until  January  1,  2020.  The  only  reason  the                                                               
legislature would have to look at  it again is if the pipeline is                                                               
in a dramatically different place.                                                                                              
SENATOR  COSTELLO  asked if  there  is  any practical  difference                                                               
between saying  we know this  is the  area that could  change and                                                               
the Talerico blanket approach.                                                                                                  
MR.  HUTCHINSON  answered that  is  a  complicated question.  One                                                               
advantage  in  the   governor's  approach  is  if   there  was  a                                                               
challenge, the legislature had already  looked at this particular                                                               
corridor,  which  would limit  review  of  that decision  by  the                                                               
courts.  A  much broader  bill  would  require lots  of  specific                                                               
circumstances leaving it more open to challenge.                                                                                
4:54:19 PM                                                                                                                    
SENATOR  STOLTZE asked  Mr.  Ellis  to define  what  some of  the                                                               
stakeholders are in this process from his division's standpoint.                                                                
MR. ELLIS answered  that he had no  discussions with stakeholders                                                               
on  this  process so  far,  but  during  the  EIS of  a  previous                                                               
rendition  meetings were  held in  Talkeetna,  Trapper Creek  and                                                               
other  places  where individuals  made  comments.  He is  in  the                                                               
process  of  getting those  comments.  Alaska  State Parks  would                                                               
consider  stakeholders to  be various  user groups  in the  area,                                                               
businesses and the MatSu Advisory Board.                                                                                        
SENATOR MICCICHE asked  him to research whether  firearms will be                                                               
allowed on  the ROW.  It is  open to  traditional uses  except in                                                               
very specific cases like during construction.                                                                                   
4:57:16 PM                                                                                                                    
MR. ELLIS responded  that his comment was  about the construction                                                               
MR. PERRIN  added that through  the remainder of the  current ROW                                                               
that exists  (the 38.35  on state lands)  the hunting  analogy is                                                               
the same.  Folks access and  hunt along those non-park  lands and                                                               
so  the analogy  would be  the same  in the  park as  outside the                                                               
park. It will need to be clarified.                                                                                             
SENATOR  MICCICHE pointed  out  that under  49  CFR 192  requires                                                               
maintaining the  ROW. So,  actually there  is improved  access in                                                               
many situations.                                                                                                                
SENATOR  WIELECHOWSKI  asked  if  the improved  access  is  going                                                               
through wetland  areas, would it  be converted into an  area that                                                               
can be walked or driven over.                                                                                                   
MR. ELLIS  answered that it is  premature to say, but  the intent                                                               
would be to  use the "rails for trails" model  where old railroad                                                               
beds were  turned into hiking  or ATV  trails. And some  level of                                                               
restoration must be looked at.                                                                                                  
CHAIR GIESSEL said she would hold SB 70 for further review.                                                                     
5:00:29 PM                                                                                                                    
Finding no further  business to come before  the committee, Chair                                                               
Giessel adjourned the Senate Resources  Committee meeting at 5:00                                                               

Document Name Date/Time Subjects
SRES Wetland Mitigation March 9 2015.pdf SRES 3/9/2015 3:30:00 PM
SB0070A.PDF SRES 3/9/2015 3:30:00 PM
SB 70
Fiscal Note-SB0070-1-2-030615-DNR-N.PDF SRES 3/9/2015 3:30:00 PM
SB 70
SB 70 Hearing Request.pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70 Sectional Analysis .pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70 Supporting Document- (LAS 30116 AGDC Geotech State Parks Permit final signed 2015).pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB70 Gov Transmittal Letter.pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70 Briefing Paper .pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70-Supporting Document-MapCaptainCookSRA_11x17_150224.pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70-Supporting Document-Map-Denali_11x17_150225r.pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70-Supporting Document-Map-Nancy_Lake_SRA_11x17_150224.pdf SRES 3/9/2015 3:30:00 PM
SB 70
SB 70-Supporting Document-Map-WillowCreek_11x17_150224.pdf SRES 3/9/2015 3:30:00 PM
SB 70