Legislature(2001 - 2002)
04/15/2002 01:26 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
SB 308-COASTAL ZONE MGMT POLICIES/ REGS/GAS LINE [Contains discussion relating to HB 439] CO-CHAIR MASEK announced the next order of business, CS FOR SENATE BILL NO. 308(FIN), "An Act relating to the Alaska coastal management program and the responsibilities of the Alaska Coastal Policy Council; and providing for an effective date." Number 2150 JOE BALASH, Staff to Senator Gene Therriault, Alaska State Legislature, presented SB 308 on behalf of Senator Therriault, sponsor. He explained that although SB 308 began similar to HB 439, the latter became the vehicle after being referred to the Senate, and the individual-project petition language was removed. Remaining were two things: a prohibition on adopting state regulations and statutes [by reference] in local coastal district plans, and a provision to allow phased permitting of a North Slope natural gas pipeline that follows the Trans-Alaska Pipeline System (TAPS) route to Canada or to Alaska tidewater. He said the importance of that provision cannot be[overstated]; a project of this size, number of permits, and complexity is so great that in order for a consistency determination to be rendered, everything must be submitted at once for the agencies to look at in its entirety. This bill therefore allows an agency to proceed in whatever fashion is deemed best. Number 2246 REPRESENTATIVE GREEN offered his observation, having done some permitting, that quite often in this process there are many nuances. Certain decisions cannot be made successfully way in advance; hence there is a need for the flexibility to move as necessary. Number 2296 REPRESENTATIVE STEVENS asked whether the oil pipeline was phased or was built before all these requirements were in place. MR. BALASH answered that TAPS was permitted and constructed in the early 1970s, whereas the Coastal Zone Management (CZM) program didn't come into play until 1977, to his understanding. It therefore didn't need to be phased. He said the array of statutes enacted at the federal and state levels is unbelievably complex, and it is hard to say how TAPS would have been permitted under today's regime. Number 2398 REPRESENTATIVE KERTTULA asked what must be known up front before the project will be allowed to go forward. MR. BALASH answered that he thinks the language leaves the discretion in the hands of the agency responsible for rendering the consistency determination. The statutes are unchanged in that regard, so the Division of Governmental Coordination (DGC) ultimately makes the decision in concert with the various agencies. He offered his understanding that this has been run by the Department of Natural Resources (DNR) and the Department of Environmental Conservation (DEC), which agree. As far as what sort of information must be provided, he said the language doesn't stipulate any of that. REPRESENTATIVE KERTTULA asked Mr. Balash what will happen if an agency starts out and, all of a sudden, in one of the phases, it doesn't need the consistency determination. For example, what if part of the pipe is already laid and then a snag is encountered that precludes making the second phase work? MR. BALASH said he was trying to separate out the different versions of the different bills before the legislature. He then offered his belief that the phasing can be based on construction sequences and on distinct areas of the state that the pipe is running through; for the most part, as he understands it, there is a local coastal plan for the North Slope Borough and a couple of rivers coming down from the Beaufort Sea, but only a very limited area will require the consistency determination. For the rest of the 1,800 or so miles, the pipe won't be running through a coastal district; the processing facilities, conditioning plants, and so forth will be in a discrete area that should be able to be dealt with prior to any real "hiccups" in the process. Where it becomes most complex is that, to his understanding, the project applicant would have to know exactly which route the pipe was going to take, including which rivers it would go over or under, what time of year it would be, and so forth. And to have an idea when those things would happen is virtually impossible to know, Mr. Balash said. Therefore, this will allow concentrating on the portion of pipe that will be affecting a coastal district. Number 2588 REPRESENTATIVE KERTTULA asked whether it will be left completely up to the agency to decide how to allow phasing and what to look at in making that decision. She asked whether the statute completely delegates that to the division. MR. BALASH answered in the affirmative. Number 2610 CO-CHAIR SCALZI requested a brief explanation of Section 3, subsection (b). MR. BALASH responded that Section 1 puts into place the prohibition on the adoption [by reference] of regulations and statutes [adopted by state agencies]. He offered his understanding that the [Alaska] Coastal Policy Council (ACPC) has already "kind of ordered that" administratively with regard to local plans. Section 3, subsection (a), gives the local coastal districts one year to comply with this statutory change; subsection (b) allows the ACPC to issue an order, once that year is up, deleting those specific references in the local plan if the local district hasn't taken the step to do so. He suggested Mr. Galvin [from DGC] could speak to the arrangements made [by DGC] regarding the local districts and their ability to make those changes. Number 2715 JOHN T. SHIVELY, Lobbyist for Foothills Pipe Lines Ltd., testified via teleconference in support of the bill. He agreed with [Mr. Balash] that trying to get a determination on the entire gas line project up front doesn't make sense because of the complicated nature of the project. He added: We've worked with the administration, both the Division of Governmental Coordination and the other agencies, and, I think, have all come to the same conclusion, in that that project should be phased, and that how it's phased is something that will be worked out between the agencies and the applicant. To be frank, although there are some advantages to the applicant in the phasing situation, there are also some risks because we will have to have more than one consistency determination. But the kind of thing we're thinking about - to partially answer Representative Kerttula - is, right now we're trying to finalize a decision on the right-of-way, state lands; we already have the right-of-way across federal lands in Alaska. And under the current law, that right-of-way could not be issued until there was [a] consistency determination, and the consistency determination couldn't be issued until every permit was basically set to go: every stream crossing, every DEC permit. This ... allows decisions like the right- of-way to be made without ... having to approve the whole project. I would be very surprised that any applicant would proceed, ... although that's technically allowed ... under this language, ... with actual construction of any part of the gas line until the whole thing was (indisc.). So I think it would be very unlikely [there] would be pipe in the ground one place that then would be stopped because of another consistency determination. Number 2842 PATRICK GALVIN, Director, Division of Governmental Coordination, Office of the Governor, testified that DGC is responsible for implementing the coastal management program. Noting that he would reiterate a couple of points made that day, he said: We did participate in some discussions with some of the other agencies that would be involved in permitting a pipeline project, and came to the conclusions that were indicated earlier: that a project of the magnitude that we would anticipate here would be so large that even under our current phasing law, which allows phasing in certain circumstances, it probably technically would not meet those requirements, but from a practical standpoint would almost be too large for us to tackle all at once, given any amount of resources that we may want to throw at it. And, also, looking at it from the point of view of the public that may want to participate in a review of the project, if we try to do it all at once, then, again, the magnitude would be so large, and while the applicant may be able to throw the resources at it and the state may even ... be able to come up with resources that may be able to tackle it, the public would not be able to comprehend such a vast scale all coming down at the same time. And so while we recognize that there was a need to allow for phasing of a project along these lines, what we recognize is that, as I indicated, the current phasing law - which was drafted primarily looking at the sequencing of oil and gas development going from lease sales to exploration to development - was limited in its application to this type of a project, and that rather than coming up with [an] exemption or trying to change the language of the ... phasing law in order to allow for a project of this type to fit under it, it might have some unexpected consequences of allowing other projects - that would not be nearly this scale - of fitting that same justification. And so we felt that structurally the proper approach was the one taken by this bill, which was to say that the natural gas pipeline is so unique that it needs to have a separate provision of our phasing law to allow for phasing in a manner that would be decided at that time. MR. GALVIN referred to Section 1 and what he called the tie-in in Section 3. TAPE 02-30, SIDE B Number 2965 MR. GALVIN said it had become a practice for those [local] plans to just periodically incorporate state law when they didn't feel the need to add to it. Hence there would be a statement incorporating the "rules of the Department of Fish and Game" or "the rules with regard to the DGC spill-response requirements," for example, into the plan. However, those incorporations by reference legally "froze in time" the requirements of the state law at the time the plan was adopted; as those state laws were refined and updated, local plans kept the old rules in place. Therefore, a number of times, there were conflicting rules for an individual project, even though the intent was to merely take the state law into the local plan. MR. GALVIN reported that as this problem has been recognized over the last four or five years, [DGC] has encouraged local districts to update their plans and try to remove these provisions; however, they haven't done so because of lack of time, interest, motivation, or money to do so. Thus what [DGC] sees as an advantageous portion of this law is that it allows the ACPC, as the body that oversees the program, to take that step on its own, whereas under current process the district has to initiate that attempt, which they haven't been willing to do. This therefore offers the opportunity to rectify the situation in a way that doesn't require districts to take that initial step. Number 2865 REPRESENTATIVE KERTTULA asked whether AS 46.40.094 is the basic statute that would apply today unless this change is made. MR. GALVIN answered in the affirmative. REPRESENTATIVE KERTTULA asked Mr. Galvin what, in that statute, he believes DGC will have problems with in phasing. She remarked, "I would think that this would be a project that would obviously have to be phased." MR. GALVIN responded that the answer goes back to an example Representative Green alluded to earlier: there may be projects for which something might be identified up front, and over the course of the analysis of that project, when it gets to the point where something becomes an issue, "you may find that that's not the case." Mr. Galvin said this example fits the model in the current law, which takes into account that opportunity and allows phasing of a project "where developing information is going to be obtained during the course of an earlier phase that may result in changes at a subsequent phase." MR. GALVIN, with regard to how a natural gas pipeline project would be developed, said there probably is the ability to obtain the information relating to all of the stream crossings and engineering that would be expected to take place within the coastal zone. However, from both a capital-investment standpoint with regard to upfront investment and from an information-gathering standpoint, [DGC] doesn't think it would be practical that such information would be available all at once at the front end of the project, and doesn't foresee the information all coming in at once. He said part of it relates to the fact that the applicant that is furthest along now is looking at giving the state right-of-way, which cannot be issued until a consistency determination has been made associated with that decision. In conclusion, he said: So while we may be able to make a consistency determination with regard to the issues that are association with that right-of-way, the route where the pipe's going to go, and what streams are actually going to be crossed, what we won't have available to us are the engineering, the spill-response requirements, and all those other things that would ... naturally go into the consistency review that we would want to make a decision on, and we wouldn't be able to say, "Yes, you're entirely consistent." But we could make it with regard to the information that's available for the right-of-way, if this language were to go through. Number 2697 REPRESENTATIVE KERTTULA said she must be missing something, then, because she thought phasing would have allowed limiting what is being reviewed in that phase at any rate, "unless ... you've got something that you know, where it was made a part of the record." She added, "You don't have to know everything completely up front; you do have to know 'reasonably foreseeable' or a significant effect. But are you requiring a project that's phased currently to bring in every single piece of information up front now?" MR. GALVIN answered that it is the information that is available, which is actually the problem because, for a number of projects, people will say. "Well, we don't have the finances now to get that information, and so we would like to get just this part permitted right now." Mr. Galvin explained: Under the phasing law, that information is available; it's just [that] they're choosing now to obtain it at this point. And so ... the concern is that if we interpret the law differently than we currently do for this gas line project, it's going to have a precedent in other projects, and that we'll end up with a much broader phasing opportunity than we currently have, just because we wanted to make this exception. Number 2634 REPRESENTATIVE KERTTULA asked, "Why are you not requiring available information to be brought in with the gas line? Is it the expense?" MR. GALVIN responded: It's both the expense and the magnitude, that we see that if we're looking at a gas line in total, from treatment facility through the entire route, ... primarily on the North Slope side, that the information that would be needed would be more than what could be brought to bear at the time that either the applicant or the state would be interested in having ... that consistency determination (indisc.). Number 2576 CO-CHAIR SCALZI remarked that there are districts that have been active with regard to their local management plans. He asked whether Mr. Galvin had communicated with municipalities about this bill and, if so, what their reaction was. MR. GALVIN said not with regard to this particular bill. He reported that there have been a number of "hearings from the coastal policy council" dealing with this topic, however, which engendered a great deal of debate four or five years ago when it first became a problem. He said there wasn't any indication from the coastal districts, whether they have current plans or older ones, that there was an advantage in incorporating state law by reference. CO-CHAIR SCALZI asked whether Mr. Galvin planned to consult with local districts. MR. GALVIN pointed out that Section 3, subsection (a), allows districts to first have the opportunity to amend their plans in order to make them comply with the provisions of Section 1. This provides them a way to comply before the ACPC acts. He said there would be communication at that point. CO-CHAIR SCALZI offered that his own concern is more about input than being in compliance. Number 2459 DANA OLSON testified via teleconference, noting that she'd faxed her comments to the committee that morning; she asked that they be included in the legislative history. She expressed concern about citizen involvement in the bill, in particular, and suggested this negates the public process under the theory of some economic gain, even though she sees no legal or factual basis that the state will gain anything. These are major program changes that haven't been approved by the Secretary of Commerce, she said. Ms. Olson noted that earlier she had requested that there be a "title or purpose of this bill," because it seems to be a catchall for any issue that's out there, and it creates an insufficiency of notice. She suggested the need for it to be more clear and precise. MS. OLSON noted that she'd volunteered previously to help set up citizen involvement with regard to making recommendations on program changes. She expressed disappointment that she had't been given such an opportunity or heard of anyone else having that opportunity. Number 2347 REPRESENTATIVE STEVENS referred to Ms. Olson's written testimony and asked her to comment on her perceived need for a fiscal note. MS. OLSON replied: Well, part of the problems that I find is that when the state hasn't done AS 46.03.040, ... an environmental plan, and all they have is a regulatory means to address things, there is a requirement ... under Title 38, which is an enforceable policy of the Coastal Management Program, to revise the outdated land-use plans when necessary. And I've alleged for years and years, since 1984, that it's necessary. I've met with deaf ears. I'm being affected by this ... fact that it's not being revised when necessary. Also, the fiscal note for consideration of specific plans that are required under specific permits, I'm alleging that if the state can't do it and hasn't been able to do it since 1984 - and I've even given an example of the Knik Arm power process - I'm alleging that this ... would not constitute an adequate risk assessment, and, therefore, I would be ... very objecting to this process. CO-CHAIR MASEK asked whether anyone else wished to testify; she then closed public testimony. Number 2248 REPRESENTATIVE STEVENS requested that the [sponsor's staff] address the fiscal note. MR. BALASH replied that there would be some expense borne by the agency in terms of ordering the coastal districts to fix their plans. With regard to Section 2 of the bill, the phasing language, Mr. Balash said he imagined it would make the agency's job easier rather than harder when these applications come in. As for the agency's expenditures in relation to this, he suggested Mr. Galvin could explain that better. He added that the agencies won't have to do anything in response to this change in law. If the right-of-way application is "processed along further," he offered his belief that there is a designated-program-receipts mechanism in place now, and that "they are paying for the work being done at the gas pipeline office" to help process that application. MR. GALVIN, in response to Representative Stevens, said Ms. Olson had testified on this bill a number of times, primarily dealing with petition language that has been dropped in the bill. He said her reference to the environmental planning is planning done by DEC and isn't related to any aspects of this program or what [DGC] deals with; hence it is difficult to respond to that particular claim. He offered his belief that this bill won't have a fiscal impact. Although the ACPC doesn't have money set aside for dealing with this aspect, it has an operating budget "from our federal grant" under which actions necessary under this bill would fit. Therefore, [DGC] doesn't see any additional fiscal impact, he concluded. Number 2040 REPRESENTATIVE KERTTULA began discussion of what she would later offer as Amendment 1. She related her understanding that Mr. Galvin's concern about making this consistency determination is that "you may have things available, but ... it won't be reasonable to try to look at everything." She said that, nevertheless, the heart of coastal management is trying to figure out effects of a project, and that the heart of most court cases about phasing seems to be "that you try to take a look at what the effect is going to be, as much as you know it." She asked Mr. Galvin whether he plans to look at the significant, reasonably foreseeable effects. MR. GALVIN answered: My expectation is that when we are doing the consistency review for the right-of-way, it would be looking at the project in terms of all the effects associated with it. But what we found is that - just the evolution of the program, as you're well aware - is that we've come to the point where now we're looking, as part of our consistency review, at the details. And it's the detail part that we need to be able to put off 'til later. REPRESENTATIVE KERTTULA explained that with the current broad language, she worries that it seems to completely get away from looking at those effects. She asked whether there would be any harm in trying to slightly restructure what is being looked at, to include looking at the "reasonably foreseeable significant effects" and to make it clear. She added, "You're not looking at every tiny detail, but you're using the traditional coastal zone language, so that you don't run up against ... the phasing situation where you're saying you're not even going to be able to look at that." MR. GALVIN suggested the need to see how it fits in, but said a first look that takes into account the significant effects of the project would be keeping with "our intent." REPRESENTATIVE KERTTULA emphasized "reasonably foreseeable." MR. GALVIN mentioned looking at the significant effects and not dealing with the site-specific effects. REPRESENTATIVE KERTTULA concurred. CO-CHAIR MASEK offered her opinion that the bill has quite a few safeguards. Number 1903 REPRESENTATIVE KERTTULA moved to adopt Amendment 1, on page 2, line 1, following "in a manner that promotes review of proposed uses and activities", to insert "and the reasonably foreseeable significant effects". REPRESENTATIVE KERTTULA explained that she didn't foresee that it would change what the division does anyway, because under normal coastal-management law, [the division] really would have to take a look at that. However, it might help in terms of information, not only for the applicant, but also for the agencies, and it might save [the state] from a court case later. She pointed out that Mr. Galvin's testimony indicated it isn't farfetched and doesn't involve looking for things one cannot know, but looking at the reasonably foreseeable and significant effects. She suggested this committee could almost list those right now with regard to the [proposed] gas line, and she suggested it shouldn't be onerous. Number 1820 MR. BALASH, in response to Co-Chair Masek, said he wasn't prepared to comment [on Amendment 1] on behalf of the sponsor. Number 1732 REPRESENTATIVE FATE asked that [Amendment 1] be reiterated. REPRESENTATIVE KERTTULA reiterated that Amendment 1, on page 2, line 1, following "activities", would insert "and the reasonably foreseeable significant effect". She indicated language following the amendment would remain unchanged, and suggested that the [overseeing] division or agency would review the amended bill. She stated: But this makes it makes it very clear that you're going to be looking at the overall, ... you're not going to have to look at every tiny little detail, because that's why this has to be phased. I mean, that's really easy to understand; you couldn't require that up front, but you could require the broad look at what the effects are, and that will really [help] later on if this ever gets challenged, if the agency has done that, because they'll have an overall understanding. Number 1658 CO-CHAIR MASEK objected to Amendment 1. Number 1650 A roll call vote was taken. Representatives McGuire, Stevens, Kapsner, and Kerttula voted in favor of Amendment 1. Representatives Fate, Chenault, Masek, Scalzi, and Green voted against it. Therefore, Amendment 1 failed by a vote of 4-5. Number 1581 REPRESENTATIVE FATE moved to report [CS]SB 308(FIN) out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSSB 308(FIN) was moved out of the House Resources Standing Committee.
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