Legislature(2015 - 2016)BUTROVICH 205

03/14/2016 03:30 PM Senate RESOURCES

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03:47:23 PM Start
03:48:07 PM Overview: Alaska Oil and Gas Conservation Commission (aogcc)
04:09:34 PM SB163
05:00:41 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 3:45 p.m. --
+ Overview: Alaska Oil and Gas Conservation TELECONFERENCED
Cathy Foerster, Commissioner
-- Testimony <Invitation Only> --
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
         SB 163-NATL. RES. WATER NOMINATION/DESIGNATION                                                                     
4:09:34 PM                                                                                                                    
CHAIR  GIESSEL announced  consideration  of SB  163. She  limited                                                               
testimony to about 10 minutes per group.                                                                                        
4:10:00 PM                                                                                                                    
RAYMOND  SENSMEIER,   Council  Member,  Yakutat   Tlingit  Tribe,                                                               
Yakutat,  Alaska, said  he was  born  and raised  in Yakutat  and                                                               
thanked them for this time "to  speak from my heart" on behalf of                                                               
the  Tier 3  status of  the forelands  of Yakutat.  He represents                                                               
Yakutat on the Transboundary Commission  and said that many mines                                                               
in Canada  are at the  headwaters of  fishing rivers; one  is the                                                               
Alsek, which is  40 miles from Yakutat.  The forelands, according                                                               
to scientists,  Park Service  and Alaska  Department of  Fish and                                                               
Game  (ADF&G),   is  the  "most  pristine,   cleanest  waters  of                                                               
drinkable water quality in Alaska and the nation."                                                                              
He said there are approximately  90 streams with all five species                                                               
of salmon, char, cut throat,  hooligan, seals and sea lions. This                                                               
area is  covered with old  village sites, old summer  fish camps,                                                               
shaman's  graves, and  the bones  of his  ancestors. There  is no                                                               
controversy involved in claiming this status.                                                                                   
MR.  SENSMEIER digressed  saying he  is  a veteran  and asked  if                                                               
there were  any other veterans in  the house. A number  of people                                                               
CHAIR GIESSEL thanked them for their service.                                                                                   
MR. SENSMEIER said he served two  tours in Vietnam; it haunts him                                                               
still  and he  suffers  from PTSD.  He is  now  fighting for  his                                                               
country once  again. Two men in  a foxhole ask each  other: Do we                                                               
have your  back? The  people in  Yakutat have  the same  plea. He                                                               
asked that everyone  today put their minds together  and see what                                                               
life they can make for their children.                                                                                          
4:15:00 PM                                                                                                                    
CHAIR  GIESSEL  thanked  Mr.  Sensmeier  for  his  testimony  and                                                               
recognized   Representative   Kreiss-Tomkins   present   in   the                                                               
4:15:27 PM                                                                                                                    
DEBRA SCHNABEL,  Executive Director, Haines Chamber  of Commerce,                                                               
Haines, Alaska,  said the mission  of the Greater  Haines Chamber                                                               
of  Commerce is  promotion  of economic  growth that  contributes                                                               
positively to the  quality of life in Haines.  A household survey                                                               
undertaken  in  2011  by  the  McDowell  Group  as  a  basis  for                                                               
developing  their  2025  Comprehensive  Plan  concluded  that  72                                                               
percent  of  Haines' residents  rate  quality  of life  as  high.                                                               
Sixty-six percent named natural  beauty and outdoor opportunities                                                               
as what they  like most about Haines. The following  is a summary                                                               
of her comments:                                                                                                                
     Haines  is a  community in  transition. Their  century-                                                                    
     long economic  history includes  simultaneous operation                                                                    
     of  four salmon  canneries,  growth and  the demise  of                                                                    
     Porcupine   (a  mining   town  supporting   over  5,000                                                                    
     people),   simultaneous  operation   of  two   sawmills                                                                    
     manufacturing wood  products for  export, and  a cruise                                                                    
     ship schedule  that brought three to  four vessels into                                                                    
     port  weekly  seasonally.  So,   Haines  is  a  typical                                                                    
     Alaskan community  that has prospered or  not depending                                                                    
     on   resource   extraction,  technological   overhauls,                                                                    
     global   market  conditions,   and  politics.   Today's                                                                    
     demographics   describe   a  community   of   retirees,                                                                    
     craftspeople  who renovate  or  construct their  homes,                                                                    
     small    business   entrepreneurs,    tour   operators,                                                                    
     fishermen and health care providers.                                                                                       
     Much of  Haines' economic history  has been  decided by                                                                    
     the  state because  of land-granting  by the  state for                                                                    
     funding the  Mental Health Trust and  the University of                                                                    
     Alaska. The  state owns and  manages 32 percent  of all                                                                    
     land  in the  Haines Borough.  The Haines  State Forest                                                                    
     and  the  Chilkat  Bald Eagle  Preserve  fill  out  the                                                                    
     inventory. The  Haines' State Forest, once  an economic                                                                    
     engine for  defining the timber industry,  is now being                                                                    
     defunded by the state.  The Chilkat Bald Eagle Preserve                                                                    
     is still  an economic  development opportunity  with 77                                                                    
     percent of respondents  supporting increased commercial                                                                    
     use.  To  the  extent   that  their  economy  is  still                                                                    
     resource dependent, the Chilkat  River is the lifeblood                                                                    
     of commerce.                                                                                                               
     The Chamber  views the nomination of  the Chilkat River                                                                    
     as a  Tier 3, outstanding  national resource  water, as                                                                    
     specified in  40 C.F.R.  Part 131.12  as a  strategy to                                                                    
     direct  energy away  from mineral  resource development                                                                    
     in the  tributaries of the  Chilkat River and  to focus                                                                    
     energy  on  preservation  of   wild  salmon  stock  for                                                                    
     subsistence and  commercial use  in the  development of                                                                    
     recreational tourism.  It is  the politics  of defining                                                                    
     quality of life.                                                                                                           
     Some would say  that a Tier 3  designation is necessary                                                                    
     to  preserve  cultural   values  including  subsistence                                                                    
     lifestyles,  necessary to  preserve  wild stock  salmon                                                                    
     fisheries,  necessary   to  maintain  a   semblance  of                                                                    
     pristineness that  attracts photographers,  artists and                                                                    
     tourists  seeking  wilderness recreation.  Those  would                                                                    
     say  it  is  necessary  because  it  is  impossible  to                                                                    
     otherwise guarantee that there  will never be a mishap,                                                                    
     an accident  that could introduce toxins  or pollutants                                                                    
     in  the  river, that  it  is  impossible for  a  mining                                                                    
     operation  to create  a method  of waste  disposal that                                                                    
     would  not pollute  ground water  or  tributary or  the                                                                    
     Chilkat  River directly.  Those  who support  a Tier  3                                                                    
     designation  can   envision  a  healthy   economy  that                                                                    
     restricts large scale  resource extraction to fisheries                                                                    
     and an economy built on tourism.                                                                                           
4:19:30 PM                                                                                                                    
     Those who do  not support a Tier  3 designation believe                                                                    
     that traditional  resource development  undertaken with                                                                    
     modern  methods   and  under  the  scrutiny   of  state                                                                    
     agencies responsible for  protecting the state's waters                                                                    
     do not threaten  water quality. They also  think that a                                                                    
     mining operation, specifically,  the Palmer Deposit, is                                                                    
     the  sort of  economic development  that would  improve                                                                    
     quality of life  because it would create  jobs and open                                                                    
     up  more  land.  These  people believe  that  there  is                                                                    
     adequate regulation in place  to preserve water quality                                                                    
     in  the  Chilkat  River.  Those who  oppose  a  Tier  3                                                                    
     designation see it as an  imposition on their lifestyle                                                                    
     and  a   threat  to  potentially   meaningful  economic                                                                    
     In the 2011 survey, more  than 50 percent of households                                                                    
     supported potential  economic development opportunities                                                                    
     utilizing  agriculture  (95 percent)  value-added  wood                                                                    
     products   (92pc),   winter   tourism   (83   percent),                                                                    
     promotion  of  the  Chilkat  Bald  Eagle  Preserve  (77                                                                    
     percent)   and  large   scale  timber   harvesting  (65                                                                    
     percent). Fifty  percent of households  supported large                                                                    
     scale mining  such as  the Constantine  Mineral deposit                                                                    
     in the Chilkat Valley, the Palmer Project.                                                                                 
     Being for  or against  Tier 3  for economic  reasons is                                                                    
     only  one  aspect of  this  issue.  The issue  is  more                                                                    
     broadly political. Some think  it would take government                                                                    
     regulation of local life too  far. We have been told at                                                                    
     a Q&A  session held by the  Department of Environmental                                                                    
     Conservation (DEC)  in Haines  on February 22  that any                                                                    
     activity currently undertaken in  state waters would be                                                                    
     allowed to continue,  but there is concern  that a Tier                                                                    
     3    designation    would    prohibit    infrastructure                                                                    
     development  that  may  be   deemed  important  to  the                                                                    
     support   of   subsistence   lifestyles   and   outdoor                                                                    
     recreation such as boat  launches, docks, and operation                                                                    
     of machines that raise turbidity levels in the river.                                                                      
MS. SCHNABEL said the political aspects of the proposed process                                                                 
for designation of Tier 3 designation as outlined in SB 163 is                                                                  
of concern to her membership according to a recent survey.                                                                      
     Governor    Walker's   assessment    of   "far-reaching                                                                    
     consequences"  for  economic development  supports  his                                                                    
     opinion that the basis for  Tier 3 designation ought to                                                                    
     be  political and  not scientific.  As written,  SB 163                                                                    
     calls  for  legislative   action  on  the  designation.                                                                    
     Membership favors slightly  a scientific basis, because                                                                    
     they  realize  that  votes on  issues  affecting  local                                                                    
     economies can  easily be traded among  legislators with                                                                    
     different constituent loyalties.                                                                                           
     Another concern about SB 163  is the provision that any                                                                    
     single  resident may  nominate  a  Tier 3  designation.                                                                    
     Generally,  consideration  of  a  designation  of  far-                                                                    
     reaching  consequence out  to have  a larger  political                                                                    
     buy-in at the time  of application. It needs scientific                                                                    
     buy-in and nominating applications must be vetted.                                                                         
4:23:01 PM                                                                                                                    
     In  considering  the   process  for  designating  state                                                                    
     waters as  an outstanding national water  resource, the                                                                    
     Chamber  looks to  the State  Constitution, Article  8,                                                                    
     Natural Resources.  The legislature  has constitutional                                                                    
     authority    for     utilization,    development    and                                                                    
     conservation of all  natural resources including water,                                                                    
     which  is subject  to appropriation,  with priority  to                                                                    
     prior rights  and preference among beneficial  uses and                                                                    
     the   general  preservation   of  fish   and  wildlife.                                                                    
     Constitutionally, the  legislature may provide  for the                                                                    
     administration  and preservation  of special  use sites                                                                    
     for the use, enjoyment and  welfare of the people as it                                                                    
     did  with  the  formation  of the  Chilkat  Bald  Eagle                                                                    
     Preserve. The  Constitution also provides  that mineral                                                                    
     rights hold a priority right for extraction.                                                                               
     Nature offers  us phenomenal choices that  require good                                                                    
     judgement   and   a   crystal  ball.   Decisions   have                                                                    
     consequences. Reflecting  on the potential impact  of a                                                                    
     Tier  3 designation  seems similar  to the  impact that                                                                    
     consideration  of   habitat  for  various   species  of                                                                    
     wildlife  had   in  the  management  of   our  national                                                                    
     forests. A  Tier 3 designation would  change the course                                                                    
     of  economic  development  for   Haines,  but  in  what                                                                    
     direction and  characterization remains the  purview of                                                                    
     those who remain to accept that challenge.                                                                                 
CHAIR GIESSEL asked when the DEC did their briefing if they                                                                     
talked about the impact a Tier 3 designation would have on                                                                      
fishing and use of boats in the river.                                                                                          
MS.  SCHNABEL  answered that  she  wasn't  present for  first  15                                                               
minutes and  it was a question  and answer briefing, but  the DEC                                                               
representative did  a very good  job of maintaining  that because                                                               
they didn't have  any scientific baseline data  about this entire                                                               
river system there were no answers at this time.                                                                                
4:25:56 PM                                                                                                                    
CHAIR GIESSEL said the survey results were interesting.                                                                         
MS. SCHNABEL  explained that she  was talking about  two surveys.                                                               
One  was the  household survey  done by  McDowell group  for 2011                                                               
about the broad  questions of where they want the  economy to go.                                                               
The Chamber survey was specific to the Tier 3 designation.                                                                      
CHAIR  GIESSEL  went with  the  second  survey  and asked  if  29                                                               
percent of  the Chamber members supported  the legislature making                                                               
that decision and 40 percent  favored the administration, implied                                                               
that they  thought the DEC  bureaucracy would be  less political,                                                               
because their decision would be  based on science. She added that                                                               
many  on the  Resource  Committee base  their  evaluation of  the                                                               
things that come before them on  the data and the science that is                                                               
MS. SCHNABEL noted that SB 163  provides for the development of a                                                               
process and it's hard to know  how seriously that would be taken,                                                               
because she  has heard  that DEC is  thinking of  only collecting                                                               
the  nominations  and putting  them  forward  to the  legislature                                                               
without  vetting the  application or  creating baseline  data for                                                               
consideration.  People are  highly  concerned  about a  political                                                               
body making such important decisions.                                                                                           
CHAIR  GIESSEL  said the  committee  is  looking at  the  process                                                               
language carefully.                                                                                                             
4:29:01 PM                                                                                                                    
SENATOR  MICCICHE noted  that a  majority didn't  favor a  Tier 3                                                               
designation,  but  thought that  the  administration  would be  a                                                               
better  choice than  the legislature.  He asked  if her  question                                                               
explained  some sort  of a  process, because  if the  designation                                                               
decision  would go  to a  commissioner,  it would  likely have  a                                                               
scientific  basis. However,  the commissioner  is appointed  by a                                                               
governor who has very real  political ties. In a legislative body                                                               
political  feelings can  be  averaged  out. If  a  body of  water                                                               
shouldn't be  designated, it shouldn't  really matter  which body                                                               
makes the decision. Commissioners can fluctuate dramatically.                                                                   
MS. SCHNABEL  said the  Chamber survey  followed the  February 22                                                               
meeting  when   DEC  information  on  existing   regulations  was                                                               
distributed. Haines has a section  of citizenry who believe there                                                               
is a lot of exchanging of votes in the legislative process.                                                                     
SENATOR  MICCICHE said  that  may happen  with  some lower  level                                                               
things, but it  is less likely to occur on  important issues, and                                                               
it can  happen on both sides.  He personally feels that  a really                                                               
sound process would  be the data processed  by the administration                                                               
and  forwarded to  the legislature.  That is  generally how  they                                                               
make most  key decisions  and he  has a  tendency to  believe the                                                               
process works.                                                                                                                  
MS. SCHNABEL said she would take that information back with her.                                                                
CHAIR GIESSEL  said she  appreciated that  comment and  had never                                                               
traded a  vote in her  six years in  the legislature. "I  vote on                                                               
what I  believe is  the best  thing for our  state as  a lifelong                                                               
Alaskan," she said.                                                                                                             
4:33:34 PM                                                                                                                    
SENATOR STOLTZE  commented that  he was  just confused  about the                                                               
political judgment in Haines after 2012.                                                                                        
4:33:56 PM                                                                                                                    
LOUIE  FLORA,   Legislative  Liaison,   Alaska  Center   for  the                                                               
Environment (ACE)  and Alaska Conservation Voters  (ACV), Juneau,                                                               
Alaska, read  from prepared text  opposing SB 163 as  written. He                                                               
appreciated  all the  hard work  that all  legislators are  doing                                                               
this year on the fiscal dilemma.                                                                                                
He  said ACE/ACV  supports  a clear  and  transparent process  to                                                               
designate  Outstanding  National   Resource  Water  (ONRW).  They                                                               
support  an inclusive  process that  highlights local  input that                                                               
creates   compromise   and   a   working   relationship   between                                                               
stakeholders. They  are disappointed  that Governor  Walker would                                                               
see  fit,  out   of  all  the  options,  to  punt   this  Tier  3                                                               
determination  responsibility  to the  legislature.  Establishing                                                               
the legislature as the final arbiter  of this big decision puts a                                                               
lot of  pressure on committee chairs  and individual legislators.                                                               
It also  places the designation in  a kind of chutes  and ladders                                                               
game which  some people  and groups are  better equipped  to play                                                               
than others.                                                                                                                    
The primary  problem that  they see  with having  the legislature                                                               
making the  final Tier 3 designation  is that it creates  a white                                                               
hot  political  debate,  instead  of  a  stakeholder  discussion.                                                               
Additionally,  a 90-day  session is  dominated by  generally one,                                                               
two, or  three major issues  and may  not provide enough  time to                                                               
fully and fairly vet and decide on a Tier 3 nomination.                                                                         
The DEC, with input from ADFG  and DNR would yield better results                                                               
for  Alaska  in the  long  run  and  would foster  better  public                                                               
dialogue.  The  Office of  the  Governor  is powerful  enough  to                                                               
absorb the  shock of opposition  from whomever is opposed  to the                                                               
final outcome.                                                                                                                  
It  is  their understanding  that  all  the western  states  have                                                               
adopted some method  of designating Tier 3 waters  as required by                                                               
the Clean Water  Act, but only a small handful  of states put the                                                               
onus of approving a Tier  3 designation on the state legislature.                                                               
Some  western  states  like   Montana  that  require  legislative                                                               
approval of  Tier 3  also automatically  designate all  waters in                                                               
national  parks  and protected  areas  as  Tier 3  waters.  Idaho                                                               
requires legislative  approval and  has no  Tier 3  waters. Other                                                               
western  states like  Wyoming, Washington  and  Oregon leave  the                                                               
designation process up to their  equivalent of a DEC. Per capita,                                                               
there  is a  larger constituency  for salmon  and clean  water in                                                               
Alaska than  any other state in  the Lower 48. So  comparisons to                                                               
any of these states are tough.                                                                                                  
MR.  FLORA said  ACE/ACV  recognizes that  a  Tier 3  designation                                                               
might seem  awkward in Alaska  that has a superabundance  of high                                                               
value  rivers, wetlands,  lakes and  streams. However,  there are                                                               
numerous  reasons why  it's important  to  have a  science-based,                                                               
transparent and  inclusive ONRW process  that allows  Alaskans to                                                               
seek  Tier  3  protections  for important  waterbodies.  For  one                                                               
thing, the  planet keeps breaking  records; 2015 was  the hottest                                                               
year in  recorded history. January  2016 was the  warmest January                                                               
in human record.  Climate change is likely going to  change a lot                                                               
of things  for water in  Alaska. Perhaps  the stress of  low snow                                                               
pack and  increasing water temperature  on our fish  habitat will                                                               
engender  more and  more pressure  to protect  fish habitat  from                                                               
additional stressors. At some point,  likely soon, a whole lot of                                                               
people might  be looking  for a  whole lot of  answers on  how to                                                               
protect our  fish. A science-based  determination process  may be                                                               
more appropriate  than a legislative  process as people  begin to                                                               
examine and  judge the impacts  of climate  change on all  of our                                                               
4:38:52 PM                                                                                                                    
It is  conceivable though that Alaskans  will submit applications                                                               
to  protect waterbodies  as a  response to  perceived policy  and                                                               
decision making  shortcomings. Of  course everyone has  their own                                                               
view of  whether the  balance is  tilted too far  one way  or the                                                               
other. ACE/ACV  believes that  many current  permitting processes                                                               
have  structural deficiencies  that  prevent  compromise or  that                                                               
adequately   protect  our   fish  and   water,  such   that  ONRW                                                               
designation may be sought.                                                                                                      
For  example, since  losing the  Coastal Zone  Management Program                                                               
which  brought Alaskans  to the  table in  major permit  reviews,                                                               
there is  no ability  to comment on  temporary water  use permits                                                               
which  are used  as a  proxy for  major industrial  water rights.                                                               
Public interest  litigation has been  stripped to bare  bones and                                                               
public  comment on  oil and  gas leasing  has been  consolidated.                                                               
Reasonable water  quality measures to prohibit  wastewater mixing                                                               
zones in  salmon spawning habitat  has been halted,  the citizens                                                               
initiative  to  make cruise  ships  not  dump sewage  into  state                                                               
waters  has  been  rolled  back.  There  is  no  requirement  for                                                               
interagency consultation  on major  water withdrawal  permits and                                                               
there is  no law on the  books to prevent dewatering  of a salmon                                                               
MR. FLORA continued that under the  Clean Water Act, the state is                                                               
not required to  designate Tier 3 waters, it is  only required to                                                               
have a process  in place for citizens to  make nominations. There                                                               
are  various  options for  what  that  process could  look  like.                                                               
ACE/ACV does  not think that  a legislative process is  the right                                                               
one for  Alaska. SB 163 is  merely a path to  more shrill debate.                                                               
Alaska is uniquely dependent on fish  and clean water so there is                                                               
going to be a lot of noise surrounding this issue.                                                                              
There is obviously  an interest in the  legislature in mitigating                                                               
against Tier 3  nominations. Instead of creating  a process where                                                               
Tier  3 nominations  dominate the  legislative conversation,  the                                                               
Walker Administration  should use  the tools  at its  disposal to                                                               
build a public  conversation around why Alaskans  would seek Tier                                                               
3 nominations in the first place.                                                                                               
To  summarize in  closing, he  said,  Alaska is  overdue for  the                                                               
adoption  of  a  clear, inclusive,  science-based  ONRW  process.                                                               
While there is  no requirement to designate waters,  only to have                                                               
a process,  whatever process  is adopted  should be  workable for                                                               
the  people of  Alaska, and  allow them  to make  nominations and                                                               
have the nominations considered.  The decision should be science-                                                               
based,  inclusive, and  transparent.  ACE/ACV  believes that  the                                                               
process that  makes the  most sense  is to  have DEC,  the agency                                                               
with the water quality and  permitting expertise, be in charge of                                                               
the decision.                                                                                                                   
SENATOR  STOLTZE recalled  that the  governor suggested  that the                                                               
legislative branch make the designations  and he assumed that DEC                                                               
would be  responsible for making the  policy recommendations. DEC                                                               
Commissioner  Hartig   has  been   at  the  helm   through  three                                                               
administrations and has helped direct  a lot of that traffic that                                                               
has been  so inimical  in Alaska.  And he  asked: "Why  would you                                                               
want to trust a dirty guy like him?"                                                                                            
MR. FLORA  replied that the  commissioner has a  long familiarity                                                               
with  the  process  and  he  could  create  a  fair  process  for                                                               
analyzing   Tier   3   water   nominations   working   with   the                                                               
administration. Part  of the  issue now  is that  Alaskans didn't                                                               
know  about Tier  3 waters  before the  governor introduced  this                                                               
bill. Using  science and having stakeholder  involvement builds a                                                               
lot more cooperation and can  bring Alaskans together in a larger                                                               
way than a potentially partisan legislative debate.                                                                             
4:43:28 PM                                                                                                                    
SENATOR  MICCICHE  said in  looking  at  the list  of  designated                                                               
waters in  western states,  the State  of California  is arguably                                                               
the most  environmentally active  state in the  union and  it has                                                               
only two bodies  of water designated as Tier 3.  California has a                                                               
robust  process; it  has a  state agency  or ten  for just  about                                                               
every decision that has to be made.                                                                                             
He  struggles with  Mr.  Flora's logic,  because  he envisions  a                                                               
process  where  DEC   and  DNR  make  a   recommendation  to  the                                                               
legislature,  a  body  that  changes  slowly  but  is  relatively                                                               
consistent. The  body has  been deliberative  even if  they don't                                                               
all agree with every decision.  But there is really the potential                                                               
for dramatic swings  in the administration: you have  no idea who                                                               
the next governor will be.                                                                                                      
SENATOR MICCICHE opined that the beauty  of our system is that if                                                               
legislators  are  not responsive,  they  often  go away  and  get                                                               
replaced with other legislators that  are more responsive. He was                                                               
open  to  discussing  these  things, but  he  didn't  follow  Mr.                                                               
Flora's logic. He  hoped that if there is a  waterway that should                                                               
be designated  as Tier  3 that  it would  be successful  with the                                                               
legislature. If it  shouldn't be, neither the  department nor the                                                               
legislature would likely support it either way.                                                                                 
4:46:25 PM                                                                                                                    
DEANTHA CROCKETT,  Executive Director, Alaska  Miners Association                                                               
(AMA), Anchorage, Alaska,  said they support SB 163.  She said SB
163  addresses  the  process in  which  an  outstanding  national                                                               
resource water (ONRW) is designated.                                                                                            
     The  Federal Clean  Water Act  includes antidegradation                                                                    
     rules, the most stringent of  which is called "Tier 3."                                                                    
     Any waterbody that is designated  as an ONRW would fall                                                                    
     under Tier  3 rules and  cannot be degraded  beyond the                                                                    
     baseline   conditions.   This   means  that   any   new                                                                    
     activities or  expansion of existing activities  on the                                                                    
     waterbody that  would change the  water quality  in any                                                                    
     way would  be prohibited,  even if the  discharge could                                                                    
     prove it  meets applicable water quality  standards and                                                                    
     fully  protects  fish,  aquatic life  and  other  water                                                                    
     uses. To this  end, I have a white  paper that outlines                                                                    
     the implications  of a Tier 3  designation on watershed                                                                    
     uses that I will submit with my testimony today.                                                                           
     Designation  of an  ONRW and  subsequent  Tier 3  water                                                                    
     protection  would,  without  doubt,  be  a  barrier  to                                                                    
     resource  development,  economic development  and  some                                                                    
     crucial  municipal  projects.   Conceptually,  the  AMA                                                                    
     would  prefer that  the State  of  Alaska request  that                                                                    
     Alaska  be  exempted  from the  provisions  within  the                                                                    
     Clean  Water Act  that  requires the  state  to have  a                                                                    
     designation process  in place.  However, it may  not be                                                                    
     possible  to secure  this exemption  and in  that case,                                                                    
     AMA believes the best avenue  the state can establish a                                                                    
     process is  one in  which waterbodies can  be nominated                                                                    
     for   ONRW   designation   through  an   act   of   the                                                                    
     legislature. Therefore,  we support  the passage  of SB
     163  this  session,  provided amendments  are  made  to                                                                    
     ensure the process  is credible and done in  a way that                                                                    
     truly  evaluates  waterbodies  with  science  and  data                                                                    
     prior to the pursuit of a designation.                                                                                     
     While  there may  be cases  in which  nomination of  an                                                                    
     ONRW  is warranted,  AMA believes  the process  and any                                                                    
     designation  could  be  used by  some  anti-development                                                                    
     individuals  or   organizations  to   stop  responsible                                                                    
     development  projects.  To  prevent this  process  from                                                                    
     being  used as  a tool  to stop  the next  mine, timber                                                                    
     sale,   fish  processing   plant,   or   oil  and   gas                                                                    
     development, we propose the following amendments:                                                                          
4:50:02 PM                                                                                                                    
1. A nomination can't be  enacted unless the legislature confirms                                                               
the designation.                                                                                                                
2. The  nomination should  be specific to  sections of  water and                                                               
can't  go  further  or  be  applied to  any  waters  outside  the                                                               
intended ONRW designation area.                                                                                                 
3. Language should be included to  provide the ability for DEC to                                                               
reject  nominations that  fail to  satisfy specific  criteria and                                                               
requirements for information that  the department would establish                                                               
in regulation. Vetting is a good word to use for this process.                                                                  
She read suggested criteria that was  in a March 4 letter for any                                                               
nomination.   Information   that   proves   the   waterbody   has                                                               
exceptional  unique characteristics  relative to  other state  of                                                               
Alaska waters including:                                                                                                        
- being  in pristine condition,  largely absent of  human sources                                                               
of degradation,                                                                                                                 
-being  of  exceptional  ecological, economical  or  recreational                                                               
physical appearance,                                                                                                            
-being exceptional or rare example of its type,                                                                                 
-accompanied by data that demonstrates these criteria.                                                                          
Further  she  suggested that  DEC  shall  conduct a  completeness                                                               
review  of all  applications and  be able  to request  additional                                                               
information as  necessary to process  it even if  it necessitates                                                               
the nomination being  held over to the next  nomination period as                                                               
outlined  in  the  bill.  DEC  should  have  ability  to  require                                                               
reimbursement for processing  applications including the required                                                               
evaluations  and   reports.  DEC   shall  begin   processing  the                                                               
application after a  satisfactory reimbursable services agreement                                                               
has been received from the applicant.                                                                                           
DNR shall prepare  a report evaluating the  land use implications                                                               
of any waterbody proposed for  Tier 3 nomination that DEC submits                                                               
to  the legislature.  It shall  include the  social and  economic                                                               
impacts  arising  out   of  the  changes  as  a   result  of  the                                                               
designation.  Before preparing  the report  DNR shall  also enter                                                               
into  a  satisfactory  reimbursable service  agreement  with  the                                                               
4:52:52 PM                                                                                                                    
Finally,  she said,  DEC's final  evaluations and  determinations                                                               
and findings regarding a waterbody  or segment shall constitute a                                                               
final   department  decision   that  could   be  administratively                                                               
appealed.  The   department  shall  not  forward   any  waterbody                                                               
nomination  to  the  legislature  until  all  administrative  and                                                               
judicial  appeals have  been  resolved. And  should  there be  an                                                               
administrative and/or judicial appeal,  the decisions and records                                                               
of that  should be forwarded  to the  legislature at the  time of                                                               
MS.  CROCKETT said  a fourth  proposed  change is  to organize  a                                                               
timeline in which  DEC collects nominations and  forwards them to                                                               
the legislature.  Suggested language states within  10 days after                                                               
the  convening   of  each  legislature  the   commissioner  shall                                                               
transmit  to   the  legislature  for  consideration   a  list  of                                                               
nominations  and  related  material  that were  received  by  the                                                               
department within  the 24-month  period preceding September  1 of                                                               
the previous year.                                                                                                              
Nominations  of  ONRW  waters   should  be  done  constructively.                                                               
Therefore AMA  believes the agency  should start  each nomination                                                               
period  with a  clean  slate ensuring  that previously  nominated                                                               
waters that the  legislature declined to act  on aren't forwarded                                                               
to the  legislature repeatedly.  Requiring new  nominations every                                                               
two years  will help  to mitigate  both duplicative  and outdated                                                               
nominations  of waters  already  having been  addressed as  being                                                               
inappropriate for designation.                                                                                                  
A  list   of  nominations  should   only  be  forwarded   to  the                                                               
legislature once per session. Nominations  received by the agency                                                               
after  the  September 1  deadline  should  be considered  in  the                                                               
nomination period for the following legislature.                                                                                
Her last recommendation  for SB 163 is that  language be included                                                               
that provides  a mechanism in  which the process can  be reversed                                                               
if the  stream no  longer needs Tier  3 protection.  Ms. Crockett                                                               
said  an  ONRW designation  shouldn't  be  a final  decision;  it                                                               
should  be made  only if  absolutely necessary  with the  goal of                                                               
restoring the  waterbody to  a condition  in which  multiple uses                                                               
can return to  it. DEC and perhaps the legislature  will need the                                                               
authority  and  process  to  change a  designation  if  and  when                                                               
She concluded  saying that even  with their lengthy  comments and                                                               
suggestions, AMA  believes that  SB 163  is the  start of  a good                                                               
bill with the potential of being good policy for Alaska.                                                                        
4:55:37 PM                                                                                                                    
SENATOR   MICCICHE   commented    on   the   legislature   versus                                                               
administration discussion that Idaho has  no ONRWs. Montana has a                                                               
Board of  Environmental Review and  has designated waters  of the                                                               
National  Parks  and  Federal  Wilderness Areas  but  no  Tier  3                                                               
waters.  Oregon  and  Washington   both  have  an  administrative                                                               
process  and  both  are  more  environmentally  active  on  water                                                               
quality  than  folks in  Alaska.  Neither  has  a single  Tier  3                                                               
waterbody in their  states. Wyoming seems to be  the only western                                                               
state  that   has  an   Environmental  Quality   Control  Council                                                               
appointed by the governor that  has 15 other waters plus adjacent                                                               
wetlands that have been designated  other than National Parks and                                                               
Wilderness  Areas.   It's  interesting,  because   nothing  today                                                               
prohibits  DEC  from  designating   Tier  3  waters  and  nothing                                                               
indicates  that more  waters would  be designated  under a  board                                                               
process  in  western  states. He  wondered  what  the  Governor's                                                               
thought process was.                                                                                                            
CHAIR GIESSEL said DEC opined  that Article 8 of the Constitution                                                               
says  the   legislature  shall  provide  for   the  "utilization,                                                               
development, and  conservation of  all natural  resources falling                                                               
into  the  state  including  land   and  waters."  Therefore  she                                                               
believed that  was the  foundation on  which the  governor opines                                                               
that it falls under legislative authority.                                                                                      
SENATOR STOLTZE  commented that there  were some  assertions that                                                               
the legislature  is a  partisan political body  and asked  if the                                                               
commissioner would  talk about  the governor's  motivation before                                                               
the bill leaves committee.                                                                                                      
CHAIR GIESSEL said "absolutely."                                                                                                

Document Name Date/Time Subjects
SRES-AOGCC-03-14-2016.pdf SRES 3/14/2016 3:30:00 PM
Alaska Oil and Gas Conservation Commission
SB163 ver A.PDF SRES 3/14/2016 3:30:00 PM
SB 163
SB163 Sponsor Statement.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB 163 Supporting Documents - Transmittal Letter to Senator Meyer 1.28.2016.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163 Supporting Document - FAQs.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163 Supporting Document - Tier Descriptions-DEC.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163 Fiscal Note DEC-WQ-12-30-15.PDF SRES 3/14/2016 3:30:00 PM
SB 163
SB163 Fiscal Note-DNR-MLR-02-15-2016.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-Alaska Miners Association.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-CAP.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-United Fishermen of Alaska.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-Yakutat Tlingit Tribe.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-DEC Responses to Questions in SRES.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163 AMA Testimony to SRES 3.14.16.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-AMA- Tier 3 Implications Tier 3 Designations.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Comments-Yakutat Tlingit Tribe-Yakutat Forelands Map-3-14-16.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Testimony-Greater Haines Chamber of Commerce-3-14-16.pdf SRES 3/14/2016 3:30:00 PM
SB 163
SB163-Testimony-ACE ACV-3-14-16.pdf SRES 3/14/2016 3:30:00 PM
SB 163