Legislature(2001 - 2002)

03/04/2002 01:07 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 4, 2002                                                                                          
                           1:07 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Drew Scalzi, Co-Chair                                                                                            
Representative Hugh Fate, Vice Chair                                                                                            
Representative Joe Green                                                                                                        
Representative Mike Chenault                                                                                                    
Representative Lesil McGuire                                                                                                    
Representative Gary Stevens                                                                                                     
Representative Mary Kapsner                                                                                                     
Representative Beth Kerttula                                                                                                    
MEMBERS ABSENT                                                                                                                
Representative Beverly Masek, Co-Chair                                                                                          
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 439                                                                                                              
"An Act removing provisions providing an opportunity to petition                                                                
for review of proposed consistency determinations under the                                                                     
Alaska coastal zone management program."                                                                                        
     - MOVED CSHB 439(RES) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 376                                                                                                              
"An Act relating to management of fish and game in and on the                                                                   
navigable waters and submerged lands of Alaska."                                                                                
     - FAILED TO MOVE HB 376 OUT OF COMMITTEE                                                                                   
HOUSE BILL NO. 232                                                                                                              
"An Act permitting state residents to purchase remote                                                                           
recreational cabin sites."                                                                                                      
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS ACTION                                                                                                               
BILL: HB 439                                                                                                                  
SHORT TITLE:COASTAL ZONE MANAGEMENT PROGRAMS & PETITIONS                                                                        
SPONSOR(S): OIL & GAS                                                                                                           
Jrn-Date   Jrn-Page                     Action                                                                                  
02/15/02     2287       (H)        STA, RES                                                                                     
02/15/02     2287       (H)        READ THE FIRST TIME -                                                                        
02/19/02     2321       (H)        STA REFERRAL REMOVED                                                                         
02/19/02     2321       (H)        O&G REFERRAL ADDED BEFORE RES                                                                
02/21/02                (H)        O&G AT 10:00 AM CAPITOL 124                                                                  
02/21/02                (H)        Heard & Held                                                                                 
02/26/02                (H)        O&G AT 10:00 AM CAPITOL 124                                                                  
02/26/02                (H)        Moved Out of Committee                                                                       
02/27/02     2406       (H)        O&G RPT 7DP                                                                                  
02/27/02     2406       (H)        DP: KOHRING, DYSON, CHENAULT,                                                                
02/27/02     2406       (H)        FATE, JOULE, OGAN                                                                            
02/27/02     2406       (H)        FN1: ZERO(GOV)                                                                               
03/04/02                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
BILL: HB 376                                                                                                                  
SHORT TITLE:FISH & GAME IN NAVIGABLE WATERS                                                                                     
SPONSOR(S): REPRESENTATIVE(S)OGAN                                                                                               
Jrn-Date   Jrn-Page                     Action                                                                                  
02/01/02     2121       (H)        READ THE FIRST TIME -                                                                        
02/01/02     2121       (H)        RES, JUD                                                                                     
03/01/02                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
03/01/02                (H)        Heard & Held                                                                                 
03/04/02                (H)        RES AT 1:00 PM CAPITOL 124                                                                   
WITNESS REGISTER                                                                                                              
REPRESENTATIVE SCOTT OGAN                                                                                                       
Alaska State Legislature                                                                                                        
Capitol Building, Room 108                                                                                                      
Juneau, Alaska  99801-1182                                                                                                      
POSITION STATEMENT:  Presented HB 439 as chair of the House                                                                     
Special Committee on Oil and Gas, sponsor; testified as sponsor                                                                 
of HB 376.                                                                                                                      
KEN DONAJKOWSKI, Permitting Manager                                                                                             
Phillips Alaska, Inc.                                                                                                           
P.O. Box 100360                                                                                                                 
Anchorage, Alaska  99510                                                                                                        
POSITION STATEMENT:  Testified that Phillips Alaska, Inc.,                                                                      
supports HB 439 because the current petition process enables an                                                                 
individual to easily hamper responsible oil and gas development.                                                                
PATRICK GALVIN, Director                                                                                                        
Division of Governmental Coordination (DGC)                                                                                     
Office of the Governor                                                                                                          
P.O. Box 110030                                                                                                                 
Juneau, Alaska  99811-0030                                                                                                      
POSITION STATEMENT:  Testified on  HB 439, indicating DGC doesn't                                                               
oppose eliminating the [AS  46.40.100](b)(1) petitions because of                                                               
problems that have occurred.                                                                                                    
JUDY BRADY, Executive Director                                                                                                  
Alaska Oil and Gas Association (AOGA)                                                                                           
121 West Fireweed Lane                                                                                                          
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT:  Testified in support of HB 439.                                                                            
NANCY WAINWRIGHT, Attorney                                                                                                      
13030 Back Road, Suite 555                                                                                                      
Anchorage, Alaska  99515                                                                                                        
POSITION STATEMENT:   Testified in support of  HB 439, indicating                                                               
the solution worked  out in 1994 was wrong and  that the petition                                                               
process doesn't work.                                                                                                           
DALE BONDURANT                                                                                                                  
31864 Moonshine Drive                                                                                                           
Soldotna, Alaska  99669                                                                                                         
POSITION STATEMENT:  Testified in support of HB 376.                                                                            
ACTION NARRATIVE                                                                                                              
TAPE 02-14, SIDE A                                                                                                              
Number 0001                                                                                                                     
CO-CHAIR  DREW   SCALZI  called  the  House   Resources  Standing                                                               
Committee meeting to order at  1:07 p.m.  Representatives Scalzi,                                                               
Fate, Chenault, McGuire, Green, and  Kerttula were present at the                                                               
call to order.   Representatives Kapsner, and  Stevens arrived as                                                               
the meeting was in progress.                                                                                                    
HB 439-COASTAL ZONE MANAGEMENT PROGRAMS & PETITIONS                                                                           
CO-CHAIR  SCALZI announced  the  first order  of business,  HOUSE                                                               
BILL  NO.   439,  "An  Act   removing  provisions   providing  an                                                               
opportunity  to  petition  for  review  of  proposed  consistency                                                               
determinations   under  the   Alaska   coastal  zone   management                                                               
Number 0168                                                                                                                     
REPRESENTATIVE  SCOTT OGAN,  Alaska State  Legislature, presented                                                               
HB 439  as chair of the  House Special Committee on  Oil and Gas,                                                               
sponsor.    He  explained  that  the  bill  would  eliminate  the                                                               
petition  process  in  the   Alaska  Coastal  Management  Program                                                               
(ACMP).   He mentioned that  there had  been no opposition  to HB
439  in  a  previous  House  Special Committee  on  Oil  and  Gas                                                               
meeting,   although  he'd   been   prepared   for  some   serious                                                               
REPRESENTATIVE  OGAN said  the  system is  so  "broken" that  the                                                               
Division of  Governmental Coordination  (DGC) had  testified that                                                               
it didn't  oppose the  bill, but  didn't necessarily  support it.                                                               
He offered  his opinion that  the petition process is  being used                                                               
as a 30-day  delay tactic by those who [oppose]  development.  He                                                               
suggested  the  drilling season  on  the  North Slope,  with  its                                                               
tundra and ice,  has become shorter due to the  warmer climate in                                                               
recent years.   He said 30  days is a significant  amount of time                                                               
to delay  [the development] process.   He said although  the bill                                                               
does  eliminate the  petition  process, it  does  not affect  the                                                               
ability of people  to testify or be involved in  the coastal zone                                                               
management process.                                                                                                             
Number 0399                                                                                                                     
REPRESENTATIVE  KERTTULA   clarified  that   HB  439   would  not                                                               
eliminate  the  entire  petition process,  because  the  district                                                               
management  program   would  be  left   in  place.     She  asked                                                               
Representative  Ogan  if  the  bill  would  eliminate  an  appeal                                                               
process for a third party.                                                                                                      
REPRESENTATIVE OGAN answered in the affirmative.                                                                                
Number 0491                                                                                                                     
KEN  DONAJKOWSKI,  Permitting   Manager,  Phillips  Alaska,  Inc.                                                               
("Phillips"), testified before the  committee.  He explained that                                                               
Phillips  supports  HB  439  because   the  Alaska  coastal  zone                                                               
petition  process  had  significantly  delayed  five  consistency                                                               
determinations  during December  and January.   He  remarked that                                                               
the  petition  process enables  an  individual  to easily  hamper                                                               
responsible  oil   and  gas   development.     He  said   HB  439                                                               
appropriately removes  this needless  component from  the overall                                                               
ACMP process.                                                                                                                   
MR. DONAJKOWSKI  said the  ACMP program  project-approval process                                                               
is too  complex to discuss  fully in  the short time  allowed for                                                               
testimony.   He  highlighted  Phillip's specific  concerns:   The                                                               
ACMP, primarily  a procedural and  not a substantive  process, is                                                               
set out  in Title  46, Chapter  40; its  implementing regulations                                                               
appear at 6 AAC  50.  For most projects, the  DGC is charged with                                                               
coordinating,  on  behalf  of the  state,  the  determination  of                                                               
whether  a proposed  project in  and around  the state's  coastal                                                               
areas  is "consistent"  -  in compliance  -  with the  applicable                                                               
standards of the ACMP set forth in  6 AAC 80 and the standards of                                                               
the applicable  coastal district.  During  the coordinated review                                                               
process,  each  local, state,  and  federal  agency not  only  is                                                               
involved in  helping DGC make the  consistency determination, but                                                               
also  is responsible  for reviewing,  analyzing, and  issuing its                                                               
own numerous  permits and authorizations.   Moreover,  the public                                                               
has an  opportunity to  be involved  in and  comment on  the ACMP                                                               
consistency review and each of the agency permits.                                                                              
Number 0712                                                                                                                     
MR.  DONAJKOWSKI  offered  his  belief that  this  is  where  the                                                               
petition process is  being manipulated and misused.   If a single                                                               
individual living in  the district where the  project is proposed                                                               
submits comments to DGC during  the public comment period, and if                                                               
the agency subsequently issues a  proposed determination that the                                                               
project is  "consistent," then  the individual  has the  right to                                                               
notify  DGC of  his/her  intent to  petition  the Alaska  Coastal                                                               
Policy Council (CPC); this  automatically extends the consistency                                                               
review period by up to 50  total days, which includes 20 days for                                                               
the  petitioner  to  draft  the  formal  petition  and  then,  if                                                               
submitted, another  30 days for the  CPC to convene and  make its                                                               
decision.  Neither  DGC nor the CPC gets to  review the merits of                                                               
the notice of petition or the petition itself.                                                                                  
MR. DONAJKOWSKI  continued, noting  that if the  petitioner meets                                                               
certain  basic requirements  - such  as  being a  citizen in  the                                                               
district and having submitted comments  - then, regardless of the                                                               
merit of  the comments,  the right  to petition  is automatically                                                               
granted.  Conversely,  removal of the petition  process would not                                                               
decrease  the  right of  the  public  to  provide comments  on  a                                                               
project.   It  would  simply eliminate  the  right to  needlessly                                                               
delay a project.  He said  the specific responsibility of the CPC                                                               
is  solely to  answer the  following question:   "Did  DGC fairly                                                               
consider the  comments made by  the petitioner during  the public                                                               
process?"  The  CPC does not review or address  the merits of the                                                               
petitioner's comments, only whether the comment was considered.                                                                 
Number 0846                                                                                                                     
MR. DONAJKOWSKI  said a Kuparuk  field development  project known                                                               
as  "drill  site  3S"  was  delayed  through  the  aforementioned                                                               
process  for  35   days.    Phillips,  an   outside  attorney,  a                                                               
representative  from the  North  Slope  Borough, numerous  agency                                                               
personnel,  and the  entire CPC  had  shown up  at the  scheduled                                                               
hearing only  to discover that  the petitioner had  withdrawn the                                                               
petition minutes before  the hearing was scheduled to  begin.  He                                                               
said in  addition to needless  delay of the project,  this action                                                               
resulted  in several  hundred hours  of  wasted preparatory  work                                                               
done   by  DGC   employees   as  well   as  Phillips   employees.                                                               
Furthermore,  an  entirely  unrelated project  package  was  also                                                               
impacted for 15 days because DGC  staff needed to prepare for the                                                               
CPC hearing.                                                                                                                    
MR.  DONAJKOWSKI  said  it  was  almost  a  dual  project  impact                                                               
[because]  four  of  Phillips'  exploration-permitting  packages,                                                               
which  also received  proposed  consistency determinations,  were                                                               
similarly petitioned.   In one  case, the petitioner  appeared by                                                               
telephone  to   present  the  petition,  which   CPC  unanimously                                                               
dismissed.  Two  of the remaining three  petitions were withdrawn                                                               
by the  petitioner, and  the last one  was dismissed  because the                                                               
actual  petition  was  submitted  after  the  20-day  period  had                                                               
expired.   A project  that met the  state's test  for consistency                                                               
was  delayed 20  days through  the  submittal of  comments and  a                                                               
notice that a petition would be filed.                                                                                          
MR. DONAJKOWSKI said  exploratory drilling on the  North Slope is                                                               
conducted  during the  few winter  months when  ice roads  can be                                                               
used  to  mitigate impacts  on  the  tundra; because  of  weather                                                               
conditions, this can  be a relatively short,  uncertain period of                                                               
time  to  drill  a  well,  so  a  10-  to  15-day  delay  can  be                                                               
significant.     Consequently,  delays  brought  about   by  this                                                               
petition  process can  result in  abandoning an  otherwise viable                                                               
drilling program.                                                                                                               
MR. DONAJKOWSKI reiterated that the  ACMP process and the various                                                               
agency   permits  required   offer  the   public  a   significant                                                               
opportunity to raise  substantive concerns.  He  offered his view                                                               
that  this  particular  petition   process  has  no  constructive                                                               
application.  He said  its only use is as a  tool to hold hostage                                                               
responsible projects  that would  develop the  state's resources;                                                               
consequently, HB 439 appropriately does away with this tool.                                                                    
Number 1083                                                                                                                     
REPRESENTATIVE  GREEN  asked  how   long  the  process  involving                                                               
"frivolous delay" requests had been going on.                                                                                   
MR.  DONAJKOWSKI answered  that  this year  [2002] was  Phillips'                                                               
first experience with this particular process.                                                                                  
REPRESENTATIVE KERTTULA  asked whether the delay  was problematic                                                               
or if it was the administrative review itself.                                                                                  
MR. DONAJKOWSKI answered  that it was the delay;  the project was                                                               
deemed  consistent,  but  no  action could  be  taken  until  the                                                               
[petition] process was completed.                                                                                               
REPRESENTATIVE KERTTULA  asked if  the 30-day requirement  was in                                                               
statute or  [regulations].  She  also asked whether  changing the                                                               
statute to  require immediate  review of the  record [would  be a                                                               
sufficient alternative].                                                                                                        
MR. DONAJKOWSKI  said he didn't  know and  would have to  give it                                                               
some  thought.    He  questioned the  basis  for  the  [petition]                                                               
process,  given  all of  the  other  avenues  for the  public  to                                                               
REPRESENTATIVE KERTTULA  mentioned the complexities and  costs of                                                               
litigation.  She  asked what the avenue would be  if the right to                                                               
petition  were removed  [from statute]  for  a person  who had  a                                                               
[legitimate] comment that the state did not consider.                                                                           
MR. DONAJKOWSKI  said he didn't  have a response.   He reiterated                                                               
that there is an opportunity  [to participate in the process] and                                                               
that the  issue is  not whether the  comments had  substance, but                                                               
whether DGC had considered those comments.                                                                                      
Number 1225                                                                                                                     
REPRESENTATIVE KERTTULA said it's a  low standard of review; it's                                                               
looking to see  whether something was considered,  not whether it                                                               
was right or wrong, so the [petitioner] isn't asking for much.                                                                  
MR. DONAJKOWSKI said the tool was  there, it was used, and all it                                                               
amounted  to  was  the  delay   of  projects  and  the  potential                                                               
abandonment  of  those  projects.     Furthermore,  if  there  is                                                               
interest  in finding  some other  mechanism  of benefit,  there's                                                               
opportunity  to do  that.    He reiterated  his  belief that  the                                                               
public  has  plenty  of   opportunity  [to  participate]  through                                                               
numerous  agency permits  and  the coastal  process  itself.   He                                                               
recounted a comment made by the  director of DGC that the process                                                               
hadn't historically shown  much value in terms  of being utilized                                                               
in the  past.  He questioned  the merits of [the  process] on the                                                               
basis of its  record and on the  basis of how he  believed it was                                                               
used against Phillips this recent season.                                                                                       
REPRESENTATIVE   KERTTULA  asked   what  administrative   appeals                                                               
process [Phillips]  was under for  leases with the  Department of                                                               
Natural Resources (DNR) and what appeal rights were provided.                                                                   
MR. DONAJKOWSKI said he didn't know.                                                                                            
Number 1327                                                                                                                     
REPRESENTATIVE  STEVENS   remarked  that  it  must   be  terribly                                                               
frustrating and expensive to have  to prepare for a hearing, only                                                               
to find out  at the last minute that the  petition was withdrawn.                                                               
He asked why the petition was withdrawn at the last minute.                                                                     
MR. DONAJKOWSKI said  he didn't know, and  that [the information]                                                               
was between  the petitioner and  the petitioner's  lawyers, which                                                               
[Phillips] was not privy to.                                                                                                    
Number 1380                                                                                                                     
PATRICK GALVIN,  Director, Division of  Governmental Coordination                                                               
(DGC), Office  of the  Governor, explained that  the ACMP  is the                                                               
state's response to the federal  Coastal Zone Management Act that                                                               
Congress passed in 1972.   He said the Act was  offered as a deal                                                               
to coastal  states:  if the  state developed a plan  for managing                                                               
activities  within  its coastal  zone  that  met certain  federal                                                               
requirements, then  the federal  government would  basically give                                                               
up some  of its  sovereign immunity  and agree  to abide  by that                                                               
plan in  its own activities  and permitting decisions;  also, the                                                               
federal  government   would  provide  money  to   the  state  for                                                               
implementing and developing that plan.                                                                                          
Number 1504                                                                                                                     
MR. GALVIN said the state  developed a coastal management program                                                               
in the  late 1970s  and specifically designed  the program  to be                                                               
decentralized.    Moreover, a  centralized  plan  based upon  the                                                               
state  agencies' perspective  was defeated,  and the  legislature                                                               
developed a plan  to give power, to a large  extent, to the local                                                               
areas.  He  said local districts are provided  the opportunity to                                                               
develop their own plans; although  those plans have to meet state                                                               
requirements, the state doesn't write the plans for them.                                                                       
MR. GALVIN further reported that  in order to comply with federal                                                               
requirements,  the  state  had  to ensure,  while  it  was  being                                                               
implemented  throughout the  state, that  there was  some control                                                               
over that,  and [ensure]  some guarantee that  it was  being done                                                               
properly.  He  said the state put into place  a petition process,                                                               
so that somebody  who felt a local plan  wasn't being implemented                                                               
could seek redress with the CPC, which  is a body made up of both                                                               
state  officials and  a majority  of elected  officials from  the                                                               
local governments around the coast of the state.                                                                                
MR.  GALVIN continued,  saying that  when the  program was  first                                                               
developed,  [the  state had]  no  singular  process for  deciding                                                               
whether  a project  was  consistent  with the  program.   It  was                                                               
designed  with the  idea that  each agency  which issued  its own                                                               
respective permit  would decide  consistency in  conjunction with                                                               
its  permitting decision.    In  a short  time,  however, it  was                                                               
recognized  as   a  problem.     State  agencies  came   up  with                                                               
conflicting decisions on  the same issues, and  it was recognized                                                               
that there needed to be a more unified, singular process.                                                                       
[Co-Chair Scalzi turned the gavel over to Vice Chair Fate.]                                                                     
Number 1609                                                                                                                     
MR.  GALVIN  reported  that  in  the  mid-1980s,  a  process  was                                                               
developed  for deciding  consistency that  would involve  in that                                                               
process  all  state  agencies  that had  permits  and  the  local                                                               
governments.   Also,  it  would provide  an  opportunity for  the                                                               
public to  participate in the  decision.  With that  process, the                                                               
ability to seek  some administrative appeal was  limited to state                                                               
agencies, local governments, and  the applicant, if the applicant                                                               
was unhappy with the decision.   There was no petition to the CPC                                                               
built into the  process.  It wasn't until a  few years later that                                                               
the petition  process, which  remained in  the statute  from when                                                               
the  program  was  originally developed,  began  being  used  for                                                               
individual project  reviews.  However, it  wasn't something built                                                               
into the structure, and it presented problems                                                                                   
Number 1680                                                                                                                     
MR.  GALVIN explained  that some  problems had  to do  with legal                                                               
issues concerning due process and  other [issues] brought up when                                                               
the commissioners  were involved  in both substantive  issues and                                                               
review "as  a member of  the CPC."   There also were  issues with                                                               
regard to the  process:  there was no petition  process in place,                                                               
which  created  a  lot  of   internal  conflict  with  all  other                                                               
permitting processes involved.  In  1994, the legislature took up                                                               
the issue,  and a workgroup  was formed consisting of  members of                                                               
industry, members  of state agencies,  staff, and members  of the                                                               
public who were interested in the [process].                                                                                    
MR.  GALVIN related  that the  [workgroup]  had come  up with  an                                                               
experiment to deal with  the issue of the appeal to  the CPC.  It                                                               
allowed an avenue for a citizen  of an affected district to go to                                                               
the CPC,  but established a  standard much lower than  looking at                                                               
whether  the  decision  was  correct.   Instead,  the  issue  was                                                               
whether the comments  of that person were fairly  considered.  It                                                               
was designed to be a "check"  on the process to determine whether                                                               
the process was fair [and  whether the petitioner] had received a                                                               
hearing among the agencies making the decision on the issue.                                                                    
MR.   GALVIN  told   members  that   current  law   provides  two                                                               
opportunities to get to the CPC  for petitions.  He mentioned the                                                               
project-specific  request to  review  whether the  comments on  a                                                               
particular  project review  were fairly  considered.   Mr. Galvin                                                               
noted   that   still  retained   in   the   1994  law   was   [AS                                                               
46.40.100](b)(2), the second part of  the petition process, which                                                               
is  a  request that  the  CPC  look,  in  general, at  whether  a                                                               
district  plan  was  being implemented.    He  characterized  the                                                               
distinction between  the two as  follows:   the [project-specific                                                               
request] is  a reactive look  at a previous decision  and whether                                                               
the process  was fair,  whereas the [process  under] (b)(2)  is a                                                               
more prospective  way of  looking at  what had  been done  in the                                                               
past with  regard to  the district  plan, and  if it  hadn't been                                                               
done properly,  what could  be required in  the future  to ensure                                                               
the  plans   are  properly  implemented.     He  said   it's  not                                                               
necessarily to go back and  do something over again; rather, it's                                                               
from this point on, do it differently.                                                                                          
Number 1885                                                                                                                     
MR.  GALVIN  offered  that  the  project-specific  procedure  has                                                               
proven    unsatisfactory   to    basically   all    participants.                                                               
Petitioners come  to the  table before the  CPC, seeking  to have                                                               
the decision overturned because  of disagreeing with it; however,                                                               
the  issue  being  addressed  before   the  CPC  is  whether  the                                                               
[petitioner's]  comments   were  fairly  considered.     At  that                                                               
participation  level  and  afterwards, the  petitioner  expresses                                                               
frustration  that there  wasn't  a full  hearing  on the  issues.                                                               
Moreover, applicants feel they are  stuck in the process and have                                                               
to delay  their permits.   Furthermore, agency staff  who prepare                                                               
for the hearings feel they are  doing a tremendous amount of work                                                               
for a decision that is not at a  very high level.  And the CPC is                                                               
frustrated  about being  brought to  a decision  at a  late date,                                                               
dealing with  a very small  part of  the decision, and  not being                                                               
able  to work  on the  true issue  before them  in regard  to the                                                               
MR. GALVIN  said the  (b)(1) petition  process doesn't  work, and                                                               
that DGC  would respond  by getting the  people involved  to come                                                               
together to try  to find a better solution  regarding the issues.                                                               
He  said [DGC]  doesn't oppose  eliminating the  (b)(1) petitions                                                               
because of the problems that have  occurred.  For example, in the                                                               
beginning  of the  2000 fiscal  year, regulations  were put  into                                                               
place to help  get the petitions through the process  and work on                                                               
how [the  process] would  be handled.   From that  point forward,                                                               
there  were 17  notices of  petition, all  [from] citizens  of an                                                               
affected district;  of those,  9 were  rejected by  staff because                                                               
they  didn't meet  the technical  requirements of  being able  to                                                               
file a petition;  of the remaining 8, 3 were  withdrawn this year                                                               
before the  CPC hearing;  the remaining 5  were dismissed  by the                                                               
CPC's finding that the comments were fairly considered.                                                                         
Number 2072                                                                                                                     
MR. GALVIN concluded  by saying the experience has  been that the                                                               
process doesn't  result in a  change in the decision  or anything                                                               
other  than   extending  the  process  and   allowing  people  to                                                               
participate  in a  procedure that  frustrates most  participants.                                                               
He reiterated that  [DGC] does not oppose  eliminating the (b)(1)                                                               
Number 2096                                                                                                                     
REPRESENTATIVE GREEN  asked how long  a project could be  held up                                                               
in the event of multiple [petitions] filed simultaneously.                                                                      
MR. GALVIN said  it raises the question of  whether the petitions                                                               
could be  heard in succession or  could all be heard  at the same                                                               
time.   He said there  is a proposed  decision that goes  out and                                                               
provides people five  days to decide whether to file  a notice of                                                               
petition.   If simultaneous notices  of petition were  filed, DGC                                                               
would have to decide whether they  could all be heard at the same                                                               
time, and  would make  every attempt  to do  that because  of the                                                               
logistics of the bringing together  the CPC.  The petitions would                                                               
probably  be   heard  simultaneously;   however,  it   should  be                                                               
recognized that  if a  petition was  successful and  the decision                                                               
was  remanded to  the  agency to  decide,  then another  proposal                                                               
would be sent out that  would provide an opportunity to petition.                                                               
Moreover,  successful  petitions   could  potentially  delay  the                                                               
process; however, if petitions were  not successful, then a final                                                               
decision would be issued.   He said it is a  matter of the issues                                                               
presented by all of those petitions.                                                                                            
REPRESENTATIVE GREEN  asked how  long the [petition  process] had                                                               
been problematic  and whether other  operators have had  the same                                                               
MR. GALVIN  said the frustration  level that currently  exists is                                                               
not new.   He explained that  the statute was changed  in 1994 to                                                               
create a dual opportunity, and  a fairly considered plan had been                                                               
established for  project petitions.   But  from the  outset there                                                               
had  been  frustration and  unhappiness  with  the process.    He                                                               
remarked that it had been occurring for 7-8 years.                                                                              
REPRESENTATIVE  GREEN said  he assumed  that other  operators had                                                               
experienced [frivolous petitions].                                                                                              
MR.  GALVIN said  [2002] was  the first  year that  petitions had                                                               
been withdrawn prior to the hearing.   He said the petitioner had                                                               
claimed  the withdrawal  was being  made  at the  request of  the                                                               
company, but the timing was the [decision] of the petitioner.                                                                   
Number 2299                                                                                                                     
REPRESENTATIVE  KERTTULA asked  Mr.  Galvin to  elaborate on  the                                                               
petitioner's claim.                                                                                                             
MR.  GALVIN  answered  that  the  petitioner  said  Phillips  had                                                               
requested  that the  petition be  withdrawn, so  [the petitioner]                                                               
was withdrawing the petition at [Phillips'] request.                                                                            
REPRESENTATIVE  KERTTULA  asked Mr.  Galvin  to  explain why  the                                                               
program needs  to be certified by  the OCRM [Office of  Ocean and                                                               
Coastal  Resource Management],  the importance  of that,  and the                                                               
fact that OCRM has said this won't affect the certification.                                                                    
MR.  GALVIN  said  the  OCRM  is a  federal  office  within  NOAA                                                               
[National Oceanic  and Atmospheric Administration] with  the U.S.                                                               
Department of  Commerce; it oversees the  Coastal Zone Management                                                               
Act and makes the decisions  about whether the state's plan meets                                                               
the requirements of federal law in  order to qualify for both the                                                               
federal deference  to the local law  as well as the  funding.  If                                                               
the program were  to be changed and fall out  of compliance, then                                                               
the federal  government would no  longer be obligated  to comply,                                                               
and  the [state]  would  no  longer be  eligible  for funding  it                                                               
MR. GALVIN explained that any change  made [by the state] must be                                                               
reviewed  by  [OCRM] to  see  if  it  drops  [the state]  out  of                                                               
compliance.  At this point,  there have been informal discussions                                                               
about the  changes in  this bill, which  [OCRM] has  indicated it                                                               
wouldn't have a problem with.                                                                                                   
Number 2400                                                                                                                     
REPRESENTATIVE KERTTULA asked Mr.  Galvin if any (b)(2) petitions                                                               
had been [submitted] or if  there had been any implementations of                                                               
the [coastal] district petitions.                                                                                               
MR. GALVIN answered  that there hadn't been  any (b)(2) petitions                                                               
submitted  since 1994.   Prior  to that,  when there  was only  a                                                               
singular petition  process, all of those  petitions were project-                                                               
specific, dealing with individual projects.                                                                                     
Number 2424                                                                                                                     
REPRESENTATIVE KERTTULA  asked if  there had been  any discussion                                                               
about resolving  the frustration  and creating a  more meaningful                                                               
level  of review,  or about  consolidating agency  appeals.   She                                                               
also  asked  if  there  is  a  commitment  to  finding  a  better                                                               
[process], so that there is  a more meaningful petition in place,                                                               
rather than just going straight to court.                                                                                       
MR.  GALVIN said  he thought  the general  community involved  in                                                               
coastal  management  and  permitting  recognizes  a  need  for  a                                                               
comprehensive  look at  how everything  works and  fits together.                                                               
He  said that  there wasn't  time to  deal with  it [during  this                                                               
legislative session], but that the  need exists and [HB 439] only                                                               
fixes one aspect.                                                                                                               
Number 2504                                                                                                                     
VICE CHAIR FATE  mentioned streamlining of the  program and asked                                                               
if  there  would  be  a  cost  savings  in  both  efficiency  and                                                               
management of resources.                                                                                                        
MR.  GALVIN said  there wouldn't  necessarily be  a cost  savings                                                               
because  DGC hasn't  hired new  staff to  deal with  [petitions].                                                               
However,  staff would  be able  to direct  attention toward  more                                                               
appropriate things if this were no longer an obligation.                                                                        
Number 2552                                                                                                                     
JUDY BRADY,  Executive Director,  Alaska Oil and  Gas Association                                                               
(AOGA), testified  via teleconference.  Ms.  Brady mentioned that                                                               
AOGA  is  a  trade  association  and  that  most  [oil  and  gas]                                                               
companies  operating  in  Alaska  are members.    She  said  AOGA                                                               
supports  [HB 439];  she referenced  testimony  submitted to  the                                                               
committee.   She  said [HB  439] is  "one small  step" in  a much                                                               
longer-range project.                                                                                                           
REPRESENTATIVE KERTTULA asked  Ms. Brady if that step  is part of                                                               
a process  that involves  coming back and  trying to  rethink the                                                               
petition process so it is meaningful.                                                                                           
MS. BRADY said  the whole [process] needs to be  looked at, which                                                               
AOGA is  committed to doing.   She  said everybody that  has been                                                               
involved in the  process since the beginning,  including the CPC,                                                               
has tried  to have  a process  that works,  rather than  one that                                                               
doesn't  give  individuals  a  good ability  to  comment  and  is                                                               
frustrating for everybody else.                                                                                                 
NUMBER 2688                                                                                                                     
NANCY WAINWRIGHT,  Attorney, testified  via teleconference.   Ms.                                                               
Wainwright  told  the committee  she  had  participated with  Ms.                                                               
Brady in  trying to  work out  a solution,  working on  behalf of                                                               
coastal districts  and the public to  let people have a  voice in                                                               
decisions  about  their  property  and coastal  districts.    She                                                               
suggested  that the  solution worked  out in  1994 was  wrong and                                                               
that  the petition  process  doesn't  work.   She  said for  that                                                               
reason she supports [HB 439].                                                                                                   
MS.  WAINWRIGHT agreed  regarding  the result  being sought,  but                                                               
disagreed regarding the rationale.   She said the legislature has                                                               
had  to fix  DGC  procedural  problems for  the  past ten  years;                                                               
furthermore, it took  DGC about ten years to  get its regulations                                                               
on  petitions  in  place.   She  indicated  the  regulations  are                                                               
difficult to  understand.  She  said the people who  are supposed                                                               
to file  petitions and understand  the "obtuse"  regulations, and                                                               
who are  most impacted by  DGC decisions, are  private landowners                                                               
or citizens.   She said  that as  the public process  is stripped                                                               
away, the public is left with no options.                                                                                       
MS.  WAINWRIGHT offered  some history.   Initially,  there was  a                                                               
full petition process:   anyone statewide could  petition and get                                                               
a hearing.   After the village  of Kaktovik filed a  petition and                                                               
the  Kodiak Island  Borough and  certain districts  began to  use                                                               
their  voices,  however, that  part  was  stripped away  and  the                                                               
petition  process was  limited  to  the fair-consideration  rule.                                                               
After that,  public interest groups couldn't  petition because of                                                               
worry that those groups would  [make things difficult].  Finally,                                                               
the [petition  process] was  limited to  a single  individual who                                                               
lived within the  district, [met all of  DGC's requirements], and                                                               
identified the proper policies; that  individual might be able to                                                               
petition if DGC accepted it.                                                                                                    
MS. WAINWRIGHT  said the  petitioners who  are being  blamed [her                                                               
clients who had  filed the petitions that  affected Phillips] are                                                               
not opposed to these projects or  to onshore oil development.  In                                                               
the  past, these  [particular] petitioners  had granted  Phillips                                                               
rights-of-way across their land to  do projects, but had run into                                                               
some  problems.   One  problem  was the  water  use  in the  area                                                               
appeared to  be depleting the  fish resources and  affecting [the                                                               
petitioners']   subsistence  uses.      She   said  because   the                                                               
legislature  had done  away with  notice of  water projects,  the                                                               
only  input  [the  petitioners]   had  was  through  the  coastal                                                               
management  review.   She said  the  [petitioners] had  contacted                                                               
Phillips with their  concerns.  Ms. Wainwright  remarked that she                                                               
was surprised  to hear  Mr. Donajkowski say  that he  didn't know                                                               
why the petition was withdrawn.                                                                                                 
Number 2847                                                                                                                     
MS. WAINWRIGHT explained that Phillips  had flown the petitioners                                                               
to Anchorage  and held extensive meetings;  at Phillips' request,                                                               
the [petitioners] withdrew  the petition.  She  said the petition                                                               
was not withdrawn  minutes before the hearing  as Mr. Donajkowski                                                               
represented; it was two hours  before the hearing.  She remarked,                                                               
"As often happens,  things settle on the courthouse  steps."  She                                                               
said the mystery  is why DGC proceeded to call  [the CPC] to hold                                                               
a  hearing  after  it  had   already  received  notice  that  the                                                               
petitioners had  withdrawn the petition.   She said it  seemed to                                                               
be a  public relations ploy  on the  part of Phillips  because it                                                               
was not happy with the petitioners.                                                                                             
MS.  WAINWRIGHT,  continuing with  the  same  instance, said  the                                                               
property that the  petitioners were trying to  protect is private                                                               
property;  furthermore,  it  is   on  the  National  Register  of                                                               
Historic Places.  Used by  Inupiat and Eskimo people from Siberia                                                               
to Canada  as a gathering  site [for celebrations]  for thousands                                                               
of  years,   the  site  has   been  extensively   researched  and                                                               
documented by  archeologists as authentic.   There  were concerns                                                               
because  past seismic  work  caused destruction  to  some of  the                                                               
property,   including   damage   to   the   gravestone   of   the                                                               
[petitioners']  grandfather; the  [petitioners] had  wanted their                                                               
concerns to be  heard.  She said the  ACMP protects archeological                                                               
sites and is supposed to protect water use.                                                                                     
Number 2922                                                                                                                     
MS. WAINWRIGHT  continued with the  same instance.  She  said the                                                               
petitioners  went  through  the   process,  and  toward  the  end                                                               
experienced  significant pressure  to  withdraw their  petitions;                                                               
consequently,  they  withdrew  all  of  the  petitions  with  the                                                               
exception of one.   She said the  [petitioners] weren't satisfied                                                               
with the  process -  nor was Phillips  or anybody  else involved.                                                               
She said  she thought a solution  needed to be found,  but that a                                                               
solution which cuts the public out  at every level isn't going to                                                               
MS. WAINWRIGHT  mentioned [pending]  legislation that  would hold                                                               
the  government accountable  for its  actions that  harm property                                                               
owners.   She said  the owner of  the aforementioned  property is                                                               
now bearing  the expense of the  state's action and the  wrath of                                                               
the oil industry.  She said  her [clients] incurred harm to their                                                               
land  and  to their  cultural  gravesite,  and perhaps  the  only                                                               
alternative left is  to go forward with some  [form] of unlawful-                                                               
takings action.   She  said lawsuits  never solve  problems; they                                                               
cost  a lot  of  money,  and they  don't  provide  people with  a                                                               
meaningful or satisfactory result.                                                                                              
TAPE 02-14, SIDE B                                                                                                              
Number 2980                                                                                                                     
REPRESENTATIVE KERTTULA remarked that it  is dismaying to see the                                                               
demise of  the [petition] process.   She asked Ms.  Wainwright if                                                               
the [petition process] should be  eliminated, rather than keeping                                                               
a vestige [of the process] in place and then rebuilding.                                                                        
MS. WAINWRIGHT answered that part  of the problem is the public's                                                               
perception that  if a petition  is filed and  has an impact  on a                                                               
project  decision, then  that process  will be  eliminated.   She                                                               
said  Phillips  has  indicated  this  is a  result  of  a  delay;                                                               
however, last  year her clients  had tried to participate  in the                                                               
process and were  completely shut out.  She  said Phillips didn't                                                               
get its  permits until February; furthermore,  [the petitioners']                                                               
comments were rejected, and there was no petition.                                                                              
MS.  WAINWRIGHT  said part  of  the  responsibility is  that  the                                                               
people who  want to get a  project through need to  come in early                                                               
enough  to allow  for  an effective  public  participation.   She                                                               
indicated delaying  the permitting  application process  until it                                                               
is  critical to  the  project  doesn't allow  the  public a  fair                                                               
chance  to evaluate  projects.    She said  the  solution has  to                                                               
contemplate that any public process  should allow a certain lead-                                                               
time; that  has to be  respected so  that the public  process can                                                               
finish.    This  petition  process  doesn't  work,  so  why  have                                                               
something on the  books that doesn't work?  She  said there needs                                                               
to be a fair process and  a substantive review of these decisions                                                               
short  of court  litigation, if  the state  and the  public don't                                                               
want to bear that expensive burden.                                                                                             
REPRESENTATIVE KERTTULA asked Ms.  Wainwright if the reason DNR's                                                               
appeal  process wasn't  used was  because there  weren't any  DNR                                                               
appeal issues.                                                                                                                  
MS.  WAINWRIGHT answered  that her  clients had  tried to  obtain                                                               
some documents from  DNR relating to some of the  issues, but DNR                                                               
wanted to  charge them $53  just to look at  them.  She  said her                                                               
[clients]  live on  the  North Slope  and didn't  have  a way  to                                                               
obtain the documents, so they never got the documents.                                                                          
MS. WAINWRIGHT mentioned that DNR  has a process that requires an                                                               
administrative appeal;  in regard to water  permits, for example,                                                               
the   public    isn't   given   notice   of    water   permitting                                                               
[applications], and  without notice is  not aware of  the ability                                                               
to administratively  appeal.  She mentioned  that the legislature                                                               
had done away with temporary  water permits, and that people have                                                               
no idea that water is possibly  being taken from their land.  She                                                               
surmised  that  people  cannot administratively  appeal  if  they                                                               
don't know  what's happening.   She said  [the state]  can't keep                                                               
disallowing public  participation without some kind  of reaction.                                                               
She  commented that  maybe a  solution  will be  found, now  that                                                               
there is no opportunity.                                                                                                        
Number 2780                                                                                                                     
REPRESENTATIVE  OGAN offered  an  amendment  that read  [original                                                               
punctuation provided]:                                                                                                          
     Page  2, line  12-13 delete  bold, underlined  text and                                                                    
     replace  with ...a  petition filed  under this  section                                                                
     may not seek review of  a proposed or final consistency                                                                
     determination regarding a specific project.                                                                            
     Page 3, line 5 add  ...program, except that the council                                                                
     may not order  that the coastal resource  district or a                                                                
     state agency take any action  with respect to a project                                                                
    for   which    a   proposed   or    final   consistency                                                                 
     determination has been made.                                                                                           
Number 2732                                                                                                                     
REPRESENTATIVE McGUIRE  made a motion  to adopt the  foregoing as                                                               
Amendment 1.                                                                                                                    
REPRESENTATIVE OGAN explained that  amending page 2, lines 12-13,                                                               
makes the  language less ambiguous;  he offered his view  that it                                                               
is a technical amendment.  He  said amending page 3, line 5, adds                                                               
wording that clarifies the petition language.                                                                                   
Number 2682                                                                                                                     
VICE CHAIR  FATE announced  that he  was bifurcating  the written                                                               
amendment,  with  Amendment  1  being  only  the  first  portion,                                                               
amending  page  2,  line  12-13.   The  wording  it  deletes  and                                                               
replaces  is   "a  petition  seeking  review   of  a  consistency                                                           
determination may not be filed under this subsection."                                                                      
VICE CHAIR FATE asked if there  was any objection to Amendment 1.                                                               
There being no objection, Amendment 1 was adopted.                                                                              
VICE  CHAIR  FATE  labeled  the second  portion  of  the  written                                                               
amendment as  Amendment 2.   He explained  that the  new language                                                               
would be on page 3, line 5, following "program".                                                                                
Number 2673                                                                                                                     
REPRESENTATIVE  GREEN  objected  for  discussion  purposes.    He                                                               
requested clarification.                                                                                                        
REPRESENTATIVE  OGAN said  [Amendment 2]  is consistent  with the                                                               
rest of the  paragraph; furthermore, page 3, line  3, talks about                                                               
a coastal resource  district or state agency.  He  said he'd been                                                               
advised that the language was  a clarification of existing policy                                                               
that "we're" trying to pass with this legislation.                                                                              
REPRESENTATIVE GREEN  expressed concern about the  possibility of                                                               
an  exception  being [included  in  Amendment  2].   He  said  he                                                               
wouldn't  have  a  problem  with  [Amendment  2]  if  there  were                                                               
assurance that  it wouldn't be  "cross-threading" with  any other                                                               
state agency.                                                                                                                   
REPRESENTATIVE  KERTTULA   asked  Mr.   Galvin  if   the  coastal                                                               
petitions  were  going  to look  prospectively  [at  whether  the                                                               
program  is implemented  properly],  rather  than being  project-                                                               
specific.   She  asked if  there was  a possibility  that an  old                                                               
project might be affected [by  the amended language], which would                                                               
lead her to think this language is overly broad.                                                                                
MR. GALVIN requested clarification.                                                                                             
REPRESENTATIVE KERTTULA  inquired:   If an  old project  has been                                                               
"completed"  but still  is  ongoing, and  a  petition is  brought                                                               
forward   that  the   coastal   district   program  isn't   being                                                               
implemented properly,  could [the  amendment] affect  the project                                                               
and therefore not  merely be technical?  The  original intent was                                                               
simply for the coastal management  program to be implemented, she                                                               
noted, but the implementation might impact the project.                                                                         
Number 2456                                                                                                                     
MR. GALVIN  said the  reason there  had been  no example  seen is                                                               
that,  unfortunately,  enforcement  isn't   very  strong  in  the                                                               
program.  He then said the purpose  of the amendment is to get at                                                               
a subsequent review of the  determination itself; there shouldn't                                                               
be the ability,  through the petition process, to get  the CPC to                                                               
take  an  action  to  require an  amendment  to  the  consistency                                                               
determination.  However, it's written  to not take an action with                                                               
regard to  a project  for which  a consistency  determination has                                                               
been  issued.   He said  that  may hamper  enforcement action  if                                                               
there's  a  feeling  that  a   district  or  state  agency  isn't                                                               
enforcing  the program  with  regard  to a  project  that may  be                                                               
blatantly  ignoring  a  requirement  of the  program.    He  said                                                               
[Representative Kerttula's] may be an accurate characterization.                                                                
Number 2376                                                                                                                     
REPRESENTATIVE KERTTULA,  still discussing Amendment 2,  said she                                                               
didn't think  there had been  an example of  where it had  been a                                                               
problem.  She  said she had a problem with  changing the language                                                               
because she  hadn't had time  to think  about it.   She suggested                                                               
that mixing  consistency determinations with other  petitions may                                                               
be a mistake.                                                                                                                   
REPRESENTATIVE  STEVENS asked  Representative Ogan  what he  felt                                                               
the impact would be of eliminating [Amendment 2].                                                                               
REPRESENTATIVE  OGAN suggested  striking "proposed"  or "proposed                                                               
or",  as  a  compromise,  unless there  is  a  final  consistency                                                               
determination.   He said [if] it  has been through a  fair public                                                               
process, why open it up for more delaying tactics.                                                                              
REPRESENTATIVE  KERTTULA  explained  that  the  problem  is  that                                                               
[Amendment  2] would  preclude  a state  agency  from taking  any                                                               
action with respect to a  project, and every project that affects                                                               
the coastal  zone would not  be [enforceable]  because everything                                                               
has a  coastal determination or is  part of the "ABC  list."  She                                                               
said [Amendment 2] could have some really broad ramifications.                                                                  
Number 2213                                                                                                                     
REPRESENTATIVE  McGUIRE  asked  Representative  Ogan  if  he  was                                                               
[suggesting  the aforementioned  language change]  as a  friendly                                                               
amendment [to Amendment 2].                                                                                                     
REPRESENTATIVE OGAN  offered that if the  amendment is [adopted],                                                               
once  the  final  consistency determination  has  been  made  the                                                               
petition process  is over.   He  referred to  AS.46.40.096(e) and                                                               
said subsection (e) is repealed in the bill.                                                                                    
REPRESENTATIVE  GREEN   expressed  concern  that   [the  proposed                                                               
amendment]  might  go beyond  the  powers  of the  committee  and                                                               
affect the Alaska  Department of Fish and Game  (ADF&G) and other                                                               
agencies.   He indicated he  was uncomfortable  amending language                                                               
involving  state  agencies   without  carefully  researching  the                                                               
outcome beforehand.                                                                                                             
REPRESENTATIVE McGUIRE  offered her understanding  that attorneys                                                               
had reviewed the aforementioned language.   She said the idea was                                                               
to  make it  absolutely  clear that  once  the final  consistency                                                               
determination  is  made,  there  is no  way  to  circumvent  that                                                               
REPRESENTATIVE GREEN  indicated the  focus of the  discussion had                                                               
gone from nuisance objections to state agencies.                                                                                
REPRESENTATIVE OGAN  mentioned that the purpose  of the amendment                                                               
was  to ensure  that  the final  consistency  determination is  a                                                               
final one, and  that the council cannot order  a coastal resource                                                               
district or state agency to take any more action on it.                                                                         
Number 1976                                                                                                                     
REPRESENTATIVE  McGUIRE moved  to amend  Amendment 2  by deleting                                                               
the language "proposed or".                                                                                                     
Number 1970                                                                                                                     
REPRESENTATIVE  KERTTULA  objected  for purposes  of  discussion.                                                               
She  indicated  the purpose  of  the  amendment is  to  eliminate                                                               
interaction within  the consistency  determination process.   She                                                               
suggested  changing  the  language  of the  amendment  to  remove                                                               
reference to  the "project" to  make it clear that  a consistency                                                               
determination is not  an issue in these types of  petitions.  She                                                               
expressed  concern  that  the  current  language  could  have  an                                                               
unintended effect and be problematic.                                                                                           
VICE CHAIR FATE called an at-ease from 2:16 p.m. to 2:18 p.m.                                                                   
Number 1849                                                                                                                     
REPRESENTATIVE McGUIRE  moved to  [instead amend Amendment  2] by                                                               
eliminating the language "a project for which" on line 3.                                                                       
Number 1805                                                                                                                     
REPRESENTATIVE KERTTULA  said the amendment would  also eliminate                                                               
the language "has been made" from line 4.                                                                                       
VICE CHAIR FATE called an at-ease from 2:20 p.m. to 2:21 p.m.                                                                   
Number 1781                                                                                                                     
REPRESENTATIVE McGUIRE clarified that  with the amended language,                                                               
Amendment 2 would read:                                                                                                         
     Insert    except that  the council  may not  order that                                                                
     the coastal  resource district or  a state  agency take                                                                
     any  action  with  respect  to   a  proposed  or  final                                                                
     consistency determination.                                                                                             
Number 1742                                                                                                                     
VICE  CHAIR  FATE  asked  if  there  was  any  objection  to  the                                                               
amendment  to  [Amendment 2].    There  being no  objection,  the                                                               
amendment to Amendment 2 was adopted.                                                                                           
Number 1733                                                                                                                     
VICE CHAIR  FATE asked if  there was any objection  to [Amendment                                                               
2,  as amended].    There  being no  objection,  Amendment 2,  as                                                               
amended, was adopted.                                                                                                           
Number 1720                                                                                                                     
REPRESENTATIVE  McGUIRE moved  to  report CSHB  439  [HB 439,  as                                                               
amended]  out of  committee with  individual recommendations  and                                                               
the accompanying  zero fiscal  note.   There being  no objection,                                                               
CSHB  439(RES) was  moved  out of  the  House Resources  Standing                                                               
VICE CHAIR FATE called an at-ease from 2:23 p.m. to 2:26 p.m.                                                                   
HB 376-FISH & GAME IN NAVIGABLE WATERS                                                                                        
VICE  CHAIR FATE  announced the  final order  of business,  HOUSE                                                               
BILL NO. 376, "An Act relating  to management of fish and game in                                                               
and on the navigable waters and submerged lands of Alaska."                                                                     
Number 1653                                                                                                                     
REPRESENTATIVE SCOTT  OGAN, Alaska State Legislature,  sponsor of                                                               
HB 376, reminded  members that the bill was  heard extensively in                                                               
a  previous committee  meeting.   He  said he  was available  for                                                               
Number 1631                                                                                                                     
DALE BONDURANT, Alaska  Constitutional Legal Defense Conservation                                                               
Fund,  testified  via teleconference.    Mr.  Bondurant told  the                                                               
committee that  he supports  HB 376.   He said  he had  been very                                                               
active in  the issues  on navigable  waters for  many years.   He                                                               
offered the following  history:  In 1977,  Alaska Public Easement                                                             
Defense Fund v. Andrus, "we"  won reasonable access to all public                                                             
waters of the  state, and [legislation] was  passed that included                                                               
all surface  waters.   In 1987,  "we" backed  the state  into the                                                               
Gulkana decision [Alaska v. Ahtna,  Inc., 891 F.2d 1401 (9th Cir.                                                             
1989)], which resulted  in winning 30 million  acres of submerged                                                               
lands  and  187,000 miles  of  navigable  waters.   He  said  the                                                               
governor has failed  to fight for [state rights].   Mr. Bondurant                                                               
spoke about  plants, waters, and  nonrenewable resources  such as                                                               
gas and oil.   He also spoke about renewable  [resources] such as                                                               
fish and  marine animal  life in the  aforementioned waters.   He                                                               
referred to  a paragraph in  the Submerged Lands Act  that allows                                                               
the state control all [surface] and ground waters.                                                                              
MR. BONDURANT recounted  details of meetings and  events that led                                                               
up to  the initiation of the  Gulkana decision, in which  he said                                                               
he'd had  a large role.   He mentioned an ad  hoc committee, John                                                               
Shively, and Sam  McDowell.  He concluded, "So  our names weren't                                                               
on  that  suit,  but  we're  the ones  that  carried  the  battle                                                               
through."   He agreed  that the federal  government is  using the                                                               
reserved water rights  to take away the state's  rights to manage                                                               
its  resources  in  navigable  waters.     He  said  the  federal                                                               
government has a responsibility to  protect the fish and wildlife                                                               
and other  uses, including recreation.   He said the  taking that                                                               
exists, which comes under "users,"  is the state's responsibility                                                               
under [the Tenth Amendment].                                                                                                    
MR. BONDURANT  said the  reserved water  rights have  a different                                                               
intent -  to ensure  quantity and quality.   Moreover,  Alaska is                                                               
one  of the  states that  has  an article  [in its  constitution]                                                               
about water  rights; it says  there is a general  reservation for                                                               
fish and  wildlife.  He said  the "McCarran Act" says  the states                                                               
know more about their water,  so these [issues] should be handled                                                               
in state courts, but also  recognizes that the federal government                                                               
might have some  concern, so a writ of certiorari  to the Supreme                                                               
Court was allowed  in case of that.  He  said the biggest trouble                                                               
is that  these cases are  won but  aren't enforced, which  is why                                                               
[the  state]  is back  in  court  to say  "we"  have  a right  to                                                               
represent the  state, since "they"  aren't doing a very  good job                                                               
representing the  citizenship of the  country.  He  concluded, "I                                                               
would  like to  see  this  passed, [to]  give  us  a little  more                                                               
leverage,  but I'd  also like  to  see the  legislature join  our                                                               
suit, and we're fighting - ourselves - on."                                                                                     
Number 1213                                                                                                                     
REPRESENTATIVE  OGAN referenced  United  States  v. Alaska,  [117                                                             
S.Ct. 1888,  138 L.Ed.2d 231  (1997)].   He said Alaska  lost the                                                               
case,  which was  about  whether or  not  the federal  government                                                               
intended to reserve the offshore islands  on the North Slope.  It                                                               
was a  royalty dispute  case; moreover,  Alaska lost  millions of                                                               
dollars in potential  revenues over that case.   He told members,                                                               
"In the  majority opinion, [U.S. Supreme  Court] Justice O'Connor                                                               
said  that several  general principles  governed our  analysis of                                                               
the  parties'  claims.    Ownership  of  submerged  lands,  which                                                               
carries with  it the  power to  control navigation,  fishing, and                                                               
other  public  uses  of  water,  is  an  essential  attribute  of                                                               
REPRESENTATIVE OGAN  said [the purpose]  of this bill is  to stay                                                               
consistent with  the sovereign rights  of the State of  Alaska to                                                               
manage its resources.  He offered  his view that [the bill] gives                                                               
adequate protections  for "them" to  comment, keep an eye  on the                                                               
resources, and  work with the  federal government as far  as what                                                               
the state's  positions are;  moreover, [the  bill] is  stating in                                                               
law that  [Alaska] doesn't assent  to [federal] control  of [its]                                                               
submerged lands.                                                                                                                
Number 1110                                                                                                                     
REPRESENTATIVE KAPSNER asked if [passing  HB 376] would cause the                                                               
federal government to [convey control  of submerged lands back to                                                               
REPRESENTATIVE OGAN said no.                                                                                                    
REPRESENTATIVE KAPSNER asked,  "What is the point?   Doesn't this                                                               
seem futile if they're not going to pull out?"                                                                                  
REPRESENTATIVE OGAN  replied, "I  think the point  is, we  can do                                                               
all we  can do - what  I believe is  our duty as trustees  of the                                                               
public  trust  to  defend  our sovereign  rights  to  manage  our                                                               
resources."   He offered  his opinion  that the  best way  to get                                                               
closure would  be to have  the case litigated, but  said, "That's                                                               
water under the bridge.  The governor  chose not to do it, and we                                                               
don't have much left, other  than maybe Mr. Bondurant [and other]                                                               
private citizens  who are willing to  step up to the  plate."  He                                                               
talked  about  [Alaska's] history  of  not  assenting to  federal                                                               
control,  such as  in  the Glacier  Bay issue.    He offered  his                                                               
belief  that putting  it into  statute is  as appropriate  now as                                                               
when "we" did it for Glacier Bay.                                                                                               
Number 0989                                                                                                                     
REPRESENTATIVE  KAPSNER  said she  thinks  there  can be  closure                                                               
through the legislative process  that is probably more meaningful                                                               
[than through  litigation].  She  asked what would happen  to [HB
376]  on the  books once  the issue  is resolved.   She  recalled                                                               
previous  testimony  this day  by  Nancy  Wainwright [during  the                                                               
hearing  on HB  439]  that lawsuits  do  not generate  meaningful                                                               
resolutions for problems.                                                                                                       
REPRESENTATIVE OGAN  remarked that he thought  it was speculative                                                               
as to how  [the issue] would be resolved.   He mentioned that the                                                               
issue of  a constitutional amendment  [to add a  rural preference                                                               
for subsistence] has  been [before the state  legislature] for 20                                                               
years.   He said,  "I suppose  we can cross  that bridge  when it                                                               
happens."  He suggested that  once the constitution is amended to                                                               
conform to federal law, "we" have assented to it.                                                                               
REPRESENTATIVE OGAN  said he didn't  think [Alaska] was  going to                                                               
get  state management  back.    He said  [Alaska]  would have  to                                                               
enshrine  the federal  law into  its constitution,  statutes, and                                                               
regulations.   He added,  "We can call  it state  management, but                                                               
it's federal  management with a gun  to our head."   He mentioned                                                               
that  the legislature  doesn't  have  a constitutional  amendment                                                               
before  it;  nor has  it  been  placed  before  the voters.    He                                                               
remarked that he thought [legislators] should take this measure.                                                                
Number 0854                                                                                                                     
REPRESENTATIVE McGUIRE  moved to report  HB 376 out  of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
Number 0837                                                                                                                     
REPRESENTATIVE KAPSNER objected.                                                                                                
[A  few  seconds  of  the  tape  is  blank  due  to  a  technical                                                               
Number 0808                                                                                                                     
REPRESENTATIVE KERTTULA  explained, "I  just see this  as cutting                                                               
off our nose to spite our  face."  She mentioned that under this,                                                               
there may  be a  risk of possibly  getting some  information from                                                               
the  federal subsistence  board that  might be  useful after  the                                                               
issue is  resolved.  She said,  "This is neither here  nor there;                                                               
it's just sort of another shot,  and I just don't think it's very                                                               
Number 0786                                                                                                                     
REPRESENTATIVE   GREEN   recounted    earlier   discussion   that                                                               
litigation is  not a good  way to solve  an issue.   However, the                                                               
whole judicial system  is based on that:  if  "we" can't mediate,                                                               
"we" have to  go to court.   He said he agreed  with the sponsor.                                                               
He said  he thought the  only way  [the issue would  be resolved]                                                               
would [be through] the courts.                                                                                                  
VICE CHAIR FATE  said the final court of the  land does certainly                                                               
settle issues.                                                                                                                  
REPRESENTATIVE  OGAN  offered his  view  that  there wouldn't  be                                                               
closure [on the issue] regardless of  what happens.  He said even                                                               
if  the  [state]  constitution  were  amended  to  give  a  rural                                                               
priority  [for  subsistence,  to  conform to  federal  law],  the                                                               
lawsuit  in  process now  isn't  necessarily  based on  submerged                                                               
lands and  the water rights  doctrine; rather, it's  a Fourteenth                                                               
Amendment  issue  of  equal  protection  and  due  process.    He                                                               
suggested that  [the issue] would  be carried  forward regardless                                                               
of whether  it relates  to an  arbitrary class  of discrimination                                                               
based  on  residency and  whether  it  passes the  rational-basis                                                               
test.  He continued:                                                                                                            
     Really,  the only  way to  get closure  and get  all of                                                                    
     this behind  us is ...  - and [U.S.]  Senator Murkowski                                                                    
     alluded to it  - that we need the issue  ruled on so we                                                                    
     can figure  out where we're  at.  And  it's unfortunate                                                                    
     that the governor chose, in  my opinion, the actions he                                                                    
     did.  And I can't change that.  This is all I can do.                                                                      
Number 0686                                                                                                                     
A  roll call  vote was  taken.   Representatives Fate,  Chenault,                                                               
Green,  and  McGuire voted  to  move  HB  376 out  of  committee.                                                               
Representatives Stevens, Kapsner, and  Kerttula voted against it.                                                               
Therefore  [because  a  majority  of  the  nine-member  committee                                                               
didn't vote  to move the bill  from committee], HB 376  failed to                                                               
move out of  the House Resources Standing Committee by  a vote of                                                               
[There was a  motion by Representative McGuire  to reconsider her                                                               
vote  "for a  later date,"  which Vice  Chair Fate  acknowledged,                                                               
although  that particular  motion  technically  doesn't apply  to                                                               
moving a bill from committee.]                                                                                                  
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 2:40 p.m.                                                                 

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