Legislature(2011 - 2012)BARNES 124

03/11/2011 01:00 PM RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 1:15 pm Today --
+ HJR 8 OPPOSE GENETICALLY ENGINEERED SALMON TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 106 COASTAL MANAGEMENT PROGRAM TELECONFERENCED
Heard & Held
- Presentation of LB&A Audit by Pat Davidson
= HB 105 SOUTHEAST STATE FOREST
Moved Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 11, 2011                                                                                         
                           1:18 p.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eric Feige, Co-Chair                                                                                             
Representative Paul Seaton, Co-Chair                                                                                            
Representative Peggy Wilson, Vice Chair                                                                                         
Representative Alan Dick                                                                                                        
Representative Neal Foster                                                                                                      
Representative Bob Herron                                                                                                       
Representative Cathy Engstrom Munoz                                                                                             
Representative Berta Gardner                                                                                                    
Representative Scott Kawasaki                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 105                                                                                                              
"An Act relating to the Southeast State Forest; and providing                                                                   
for an effective date."                                                                                                         
                                                                                                                                
     - MOVED HB 105 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 106                                                                                                              
"An  Act extending  the termination  date of  the Alaska  coastal                                                               
management  program and  relating to  the extension;  relating to                                                               
the  review  of  activities  of  the  Alaska  coastal  management                                                               
program;  providing  for  an  effective   date  by  amending  the                                                               
effective date  of sec. 22, ch.  31, SLA 2005; and  providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 105                                                                                                                  
SHORT TITLE: SOUTHEAST STATE FOREST                                                                                             
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/11       (H)       RES, FIN                                                                                               
02/14/11       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/14/11       (H)       Heard & Held                                                                                           
02/14/11       (H)       MINUTE(RES)                                                                                            
03/09/11       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/09/11       (H)       Heard & Held                                                                                           
03/09/11       (H)       MINUTE(RES)                                                                                            
03/11/11       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 106                                                                                                                  
SHORT TITLE: COASTAL MANAGEMENT PROGRAM                                                                                         
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/11       (H)       RES, FIN                                                                                               
03/07/11       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/07/11       (H)       Heard & Held                                                                                           
03/07/11       (H)       MINUTE(RES)                                                                                            
03/11/11       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RICK ROGERS, Forest Resource Program Manager                                                                                    
Central Office                                                                                                                  
Division of Forestry                                                                                                            
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During the hearing on HB 105, answered                                                                   
questions.                                                                                                                      
                                                                                                                                
MARTY PARSONS, Deputy Director                                                                                                  
Division of Mining, Land and Water                                                                                              
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  During hearing of HB 105, answered                                                                       
questions.                                                                                                                      
                                                                                                                                
PAT DAVIDSON                                                                                                                    
Legislative Auditor                                                                                                             
Legislative Audit Division                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During the hearing of HB 106, reviewed the                                                               
recent Division of Legislative Audit audit reports of the Alaska                                                                
Coastal Management Plan (ACMP).                                                                                                 
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:18:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  ERIC   FEIGE  called   the  House   Resources  Standing                                                             
Committee meeting  to order at  1:18 p.m.   Representatives Dick,                                                               
Herron,  P. Wilson,  Gardner, Kawasaki,  Seaton,  and Feige  were                                                               
present at the  call to order.  Representatives  Munoz and Foster                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
                 HB 105-SOUTHEAST STATE FOREST                                                                              
                                                                                                                                
1:19:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE announced  that the  first order  of business  is                                                               
HOUSE  BILL NO.  105, "An  Act  relating to  the Southeast  State                                                               
Forest; and providing for an effective date."                                                                                   
                                                                                                                                
1:19:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P.   WILSON  moved   that  the   committee  adopt                                                               
Amendment 1, labeled 27-GH1694\A.1, Bullock, 3/8/11, which read:                                                                
                                                                                                                                
     Page 2, lines 11 - 16:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following paragraphs accordingly.                                                                             
                                                                                                                                
     Page 7, line 23:                                                                                                           
          Delete ";"                                                                                                            
          Insert "."                                                                                                            
                                                                                                                                
     Page 7, line 24, through page 8, line 7:                                                                                   
          Delete all material.                                                                                                  
                                                                                                                                
CO-CHAIR SEATON objected.                                                                                                       
                                                                                                                                
1:20:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  related  that although  Rowan Bay  and                                                               
Hook Arm  aren't in her  district, she  has been told  that there                                                               
are prehistoric heritage  sites in these areas,  as documented by                                                               
the Alaska  Heritage Research  Survey.  The  two areas  also have                                                               
pink salmon streams,  karst, and cave resources.   Therefore, she                                                               
expressed the need to carve out both the parcels.                                                                               
                                                                                                                                
1:21:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KAWASAKI inquired  as to  how those  parcels were                                                               
originally  selected  for  inclusion  in  the  state  forest  and                                                               
whether DNR would object to their removal.                                                                                      
                                                                                                                                
1:21:49 PM                                                                                                                    
                                                                                                                                
RICK  ROGERS, Forest  Resource Program  Manager, Central  Office,                                                               
Division of Forestry, Department  of Natural Resources, explained                                                               
that the parcels  were selected for their  timber resource values                                                               
and because both  the Central Southeast Area Plan  and the Prince                                                               
of  Wales Area  Plan for  Rowan Bay  and Hook  Arm, respectively,                                                               
designate those lands  in the general use category.   The general                                                               
use  designation  means  the  parcels are  part  of  the  state's                                                               
managed  timber base.    He noted  that  both the  aforementioned                                                               
plans acknowledge  the anadromous fish habitat  fish resources on                                                               
the parcels as well as  the heritage resources.  Furthermore, the                                                               
Forest Resources  & Practices Act acknowledges  those and provide                                                               
very generous riparian  set asides per statute.     Specifically,                                                               
a  100-foot buffer  is required  on each  side of  the anadromous                                                               
streams.   With  regard  to the  heritage  resources, Mr.  Rogers                                                               
informed  the committee  that prior  to a  timber sale,  a forest                                                               
land  use plan  is  prepared, which  supports  the best  interest                                                               
findings  to   proceed  with  the   timber  sale.     During  the                                                               
aforementioned process, the  State's Historic Preservation Office                                                               
(SHPO), Division of Parks, is  contacted.  Mr. Rogers opined that                                                               
DNR can  accommodate the heritage  resources and would  adapt the                                                               
plans  accordingly.    Mr. Rogers  informed  the  committee  that                                                               
typically the area  plans in Southeast Alaska  require a 500-foot                                                               
coastal buffer  as well.   The  department's past  experience has                                                               
been that most  heritage sites are within that  buffer, as that's                                                               
primarily where  people settled.   However, it was noted  that if                                                               
[the  heritage  site  isn't  located   in  the  coastal  buffer],                                                               
additional conditions  would be  placed on the  timber sale.   He                                                               
highlighted that  the statute for establishing  state forest also                                                               
requires a state  forest management plan, which would  need to be                                                               
prepared  within three  years  of the  passage of  HB  105.   The                                                               
aforementioned would  allow review  of any multiple  use resource                                                               
issues that might be involved for  the two parcels in question or                                                               
any  of the  parcels  in the  package.   In  further response  to                                                               
Representative Kawasaki,  Mr. Rogers  stated that  the department                                                               
would object  to the  removal of  these parcels.   This  has been                                                               
vetted  internally  with the  Office  of  the Governor,  multiple                                                               
agencies within DNR,  as well as the Alaska Department  of Fish &                                                               
Game (ADF&G). He  concluded that DNR wants to forward  HB 105, as                                                               
written.                                                                                                                        
                                                                                                                                
1:25:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  surmised  that DNR  took these  things                                                               
into consideration and there is  another chance for concerns with                                                               
regard  to  the areas  in  questions  to  be discussed  by  those                                                               
concerned in the areas.                                                                                                         
                                                                                                                                
MR.  ROGERS replied  yes,  adding  that there  is  more than  one                                                               
chance.  He  explained that the first opportunity  to address the                                                               
parcels would be in the  state forest management planning process                                                               
and  the second  opportunity would  be during  any of  the timber                                                               
sales through the  Forest Land Use Plan, which  performs a public                                                               
review and  comment period  prior to a  best interest  finding is                                                               
approved for  a sale.   In further response to  Representative P.                                                               
Wilson, Mr. Rogers  related his understanding that  there's a 45-                                                               
day review for each.  He  noted that there are also processes for                                                               
reconsiderations and appeals.  He  characterized it as the normal                                                               
regulatory process  that DNR uses  for public involvement  in its                                                               
best interest decisions for disposal.                                                                                           
                                                                                                                                
1:27:44 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON related his understanding  that these lands could                                                               
be [available],  right now, for timber  sales.  If a  timber sale                                                               
was conducted  now and if the  land was in the  state forest, the                                                               
management  plan would  have  to  be present  and  have the  same                                                               
process and restrictions.   However, the difference  with land in                                                               
the  state   forest  is  that  DNR   could  anticipate  long-term                                                               
stability that  would allow for  pre-harvest thinning  to improve                                                               
the productivity of the [second growth]  forest.  He asked if the                                                               
aforementioned is  the only  difference.   "If these  [lands] are                                                               
out, there  could still  be a  timber sale on  the land  with the                                                               
same kind of requirements; is that correct," he asked.                                                                          
                                                                                                                                
MR. ROGERS answered that is correct.                                                                                            
                                                                                                                                
1:29:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON withdrew Amendment 1.                                                                                  
                                                                                                                                
1:29:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER  informed  the  committee  that  she  had                                                               
intended to offer  this amendment, but did not  have one prepared                                                               
after  learning that  Representative P.  Wilson was  offering the                                                               
same amendment.  She then announced  that she wanted to offer the                                                               
same amendment [ultimately labeled Amendment 2] in her name.                                                                    
                                                                                                                                
CO-CHAIR   FEIGE  reminded   Representative   Gardner  that   the                                                               
committee's policy  is that  amendments must  be provided  to the                                                               
committee 24 hours prior to being offered.                                                                                      
                                                                                                                                
REPRESENTATIVE GARDNER said that  Amendment 1 met the committee's                                                               
policy  regarding  the  submission   of  amendments.    She  then                                                               
maintained that she has a right  under the Uniform Rules to offer                                                               
an amendment.                                                                                                                   
                                                                                                                                
1:29:55 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
1:30:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER acknowledged that  the original sponsor of                                                               
Amendment 2  has some ambivalence  about it, but stated  that she                                                               
does  not  as  there  are  important elements  that  need  to  be                                                               
protected.    In  particular,  the   Alaska  heritage  sites  are                                                               
irreplaceable.   Representative Gardner  pointed out that  HB 105                                                               
doubles the amount of the state  forest land and she supports it,                                                               
and eliminating  the two heritage  sites totals only  3.4 percent                                                               
of the overall state forest lands.                                                                                              
                                                                                                                                
1:31:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON remarked that  she is torn  because the                                                               
state  is  trying  to  keep   the  timber  industry  together  in                                                               
Southeast  Alaska.   She related  that she  had legislation  that                                                               
will  impact  less  than  1  percent of  all  of  the  timber  in                                                               
Southeast Alaska, which  doesn't seem to be very  much.  However,                                                               
the forest industry related to her  that they have only been able                                                               
to cut  less than 2  percent of  the timber in  Southeast Alaska.                                                               
Given that  the same  rules will apply  to these  parcels whether                                                               
they are  included in  the state  forest or  not, she  decided to                                                               
withdraw  Amendment 1.    Furthermore, if  the  entire parcel  is                                                               
taken out [of the state forest,  the amount of possible timber is                                                               
reduced.   If  these parcels  with heritage  sites remain  in the                                                               
state forest,  she opined that  portions of the parcels  could be                                                               
set aside through the process rather  than the entire parcel.  In                                                               
conclusion,  Representative  P.  Wilson   said  she  will  oppose                                                               
Amendment 2.                                                                                                                    
                                                                                                                                
1:34:11 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON pointed  out that  excluding these  parcels from                                                               
the state  forest doesn't  provide a  higher level  of protection                                                               
for them.   In fact, he opined that excluding  these parcels from                                                               
the  state forest  would result  in a  lower level  of protection                                                               
because  the  timber  harvest  plan   won't  be  required  to  be                                                               
developed in  the same way in  which it is for  the state forest.                                                               
Furthermore,  all the  sites will  be protected  adequately under                                                               
the state forest  designation unlike if the sites  have a general                                                               
use  status, which  could  allow  the lands  to  go through  land                                                               
disposals or other processes.   Therefore, he opined that placing                                                               
the parcels  in the state  forest will provide  greater long-term                                                               
protection  status,  and  thus he  announced  his  opposition  to                                                               
Amendment 2.                                                                                                                    
                                                                                                                                
1:35:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KAWASAKI  asked if  that's the perspective  of DNR                                                               
as well.                                                                                                                        
                                                                                                                                
MR. ROGERS stated that Co-Chair  Seaton's description is accurate                                                               
in  that the  parcels will  have long-term  protection under  the                                                               
state forest designation versus the  general use designation.  He                                                               
noted that the  area planning process, which is  a lengthy public                                                               
process with  the opportunity for  public input and  appeals, has                                                               
already taken  place.   He then  pointed out  that the  area plan                                                               
language  addressing both  the  Hook Arm  and  Rowan Bay  parcels                                                               
addresses heritage  resources in the  plan.  Furthermore,  DNR is                                                               
clearly given  direction to  protect those  areas.   Although the                                                               
planning document  won't have  the level  of detail  necessary to                                                               
make  the   site  specific  decisions,  typically   much  of  the                                                               
information is housed at SHPO.   In fact, much of the information                                                               
is  kept  confidential in  order  to  prevent looting  and  other                                                               
problems  with  heritage  sites.    Mr.  Rogers  reiterated  that                                                               
whether the  parcels are  in the  state forest  or not,  DNR will                                                               
consult  with  SHPO  to  provide   adequate  protection  for  the                                                               
heritage sites.                                                                                                                 
                                                                                                                                
1:38:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER surmised that  if these two parcels remain                                                               
in the state  forest, they would be managed  primarily for timber                                                               
production.  Therefore,  she further surmised that  it would then                                                               
be  more  difficult  to  define   the  parcels  for  a  different                                                               
management designation.                                                                                                         
                                                                                                                                
MR.  ROGERS opined  that it  wouldn't  be any  more difficult  to                                                               
protect  the heritage  resources on  these parcels  if they  were                                                               
included  in  the  state  forest.   Although  he  confirmed  that                                                               
Representative Gardner  is correct that the  guiding language for                                                               
the  state forest  places some  emphasis  on forestry  resources,                                                               
it's  still   multiple  use  management.     Furthermore,  to  be                                                               
consistent  with   state  and  federal  statute   and  regulation                                                               
heritage resources must be protected.   The mechanisms and office                                                               
in DNR are present to help  meet that objective.  Mr. Rogers then                                                               
highlighted that  the state forest  designation helps  because it                                                               
keeps the land in state  ownership, whereas under the general use                                                               
land  designation  the parcels  may  or  may  not stay  in  state                                                               
ownership.                                                                                                                      
                                                                                                                                
1:40:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER inquired as  to the designation that would                                                               
provide  these  historic  sites   the  greatest  protection  from                                                               
destruction or damage.                                                                                                          
                                                                                                                                
1:40:28 PM                                                                                                                    
                                                                                                                                
MARTY  PARSONS, Deputy  Director,  Division of  Mining, Land  and                                                               
Water,  Department  of  Natural   Resources,  answered  that  the                                                               
designations that  maintain those  lands in state  ownership will                                                               
provide  the greatest  protection of  those historic  sites.   No                                                               
particular  designation  would  save  a  historic  resource,  but                                                               
placing it  into a state forest  would keep such land  from being                                                               
conveyed to  out-of-state ownership.   He reminded  the committee                                                               
that  these historic  sites are  usually  one to  two acre  sites                                                               
within  a 1,500-1,600  acre parcel,  and thus  it's a  very small                                                               
percentage of the parcel.  The  Division of Forestry will be held                                                               
to a fairly  high standard for those areas, which  they will also                                                               
have to  protect as  part of  the planning  process.   In further                                                               
response to  Representative Gardner, Mr. Parsons  reiterated that                                                               
placing  the parcels  in the  state  forest would  result in  the                                                               
lands  remaining  in state  ownership  and  provide the  historic                                                               
sites the most protection.                                                                                                      
                                                                                                                                
1:42:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked if the  most protection is  what HB                                                               
105, as written, accomplishes.                                                                                                  
                                                                                                                                
MR. PARSONS replied yes.                                                                                                        
                                                                                                                                
1:42:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER withdrew Amendment 2.                                                                                    
                                                                                                                                
1:43:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DICK recalled  testimony that  objected to  large                                                               
scale logging  in an area  because of  the belief that  there was                                                               
enough  small business  in the  area  and performing  value-added                                                               
activities would be best for the community.                                                                                     
                                                                                                                                
CO-CHAIR  SEATON pointed  out  that leaving  parcels  out of  the                                                               
state forest doesn't  mean there would be no timber  sale [on the                                                               
parcels].    Placing  parcels  in the  state  forest  results  in                                                               
parcels being  on a  longer term  rotation status  for management                                                               
purposes.                                                                                                                       
                                                                                                                                
1:45:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON moved  to report  HB 105  out of  committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.  There being no objection, it was so ordered.                                                                             
                                                                                                                                
1:46:21 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:46 p.m. to 1:49 p.m.                                                                       
                                                                                                                                
               HB 106-COASTAL MANAGEMENT PROGRAM                                                                            
                                                                                                                                
1:49:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE announced  that  the next  order  of business  is                                                               
HOUSE BILL  NO. 106,  "An Act extending  the termination  date of                                                               
the  Alaska  coastal  management  program  and  relating  to  the                                                               
extension; relating  to the  review of  activities of  the Alaska                                                               
coastal management  program; providing  for an effective  date by                                                               
amending the  effective date of  sec. 22,  ch. 31, SLA  2005; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
1:49:55 PM                                                                                                                    
                                                                                                                                
PAT  DAVIDSON, Legislative  Auditor, Legislative  Audit Division,                                                               
Alaska State Legislature, paraphrased  from the following written                                                               
testimony [original punctuation provided]:                                                                                      
                                                                                                                                
       Usually when I make a presentation to a Committee                                                                        
       about the results of an audit - I cut right to the                                                                       
     meat of the matter.                                                                                                        
                                                                                                                                
     However  with  the  Alaska Coastal  Management  Program                                                                    
     (ACMP)  I'm going  to spend  a little  more time  going                                                                    
     through  the Background  portion  of  the audit,  which                                                                    
     should   give   some   context   to   conclusions   and                                                                    
     recommendations in the report.                                                                                             
                                                                                                                                
     The foundation  of the program starts  with the federal                                                                    
     Coastal Zone Management  Act of 1972.   This program is                                                                    
     intended   to   promote   the   effective   management,                                                                    
     beneficial  use,  protection  and  development  of  the                                                                    
     coastal zones.   States  participating in  this program                                                                    
     have the  right to review federal  agency and federally                                                                    
     permitted  activities  occurring  in or  affecting  the                                                                    
     coastal  zone.    This  act  encourages  but  does  not                                                                    
     require participation of local governments.                                                                                
                                                                                                                                
     The Alaska  Coastal Management  program began  in 1977.                                                                    
     In  2003 statutory  changes substantially  modified the                                                                    
     ACMP.                                                                                                                      
             · It transferred the development and implementation                                                                
               of the ACMP from the Coastal Policy Council to                                                                   
              the Department of Natural Resources.                                                                              
             · revised statewide standards                                                                                      
             · removed DEC from the consistency review                                                                          
             · required coastal resource districts to rewrite                                                                   
               their district coastal management plans.                                                                         
                                                                                                                                
     The cornerstone of the ACMP  process is the consistency                                                                    
     review.  So what is that?                                                                                                  
                                                                                                                                
     A  consistency   review  determines  if   the  proposed                                                                    
     activity   is   consistent   with  the   statutes   and                                                                    
     regulation  of  the  state's  resource  agencies  (DNR,                                                                    
     ADF&G  and   DEC);  whether   it  is   consistent  with                                                                    
     statewide standards  (which are found in  AS     ); and                                                                    
     if  the   activity  is  consistent  with   the  coastal                                                                    
     district's  enforceable  policies. These  criteria  are                                                                    
     collectively   referred   to  as   ACMP's   enforceable                                                                    
     policies.                                                                                                                  
                                                                                                                                
     The  folks  participating  in  the  consistency  review                                                                    
     include  resource  agency  staff  or  any  other  state                                                                    
     agency requesting  participation, the  affected coastal                                                                    
     resource districts,  the applicants and  any interested                                                                    
     members of the public.                                                                                                     
                                                                                                                                
     The process of a consistency review starts with:                                                                           
        · a public notice                                                                                                       
        · Then DCOM [Division of Coastal and Ocean Management]                                                                  
          distributes the consistency review packets to the                                                                     
          review participants                                                                                                   
        · Collect comments regarding consistency from the review                                                                
          participants and then distribute those comments to the                                                                
          applicant and other review participants                                                                               
        · facilitate discussion among review participants to                                                                    
          achieve consensus                                                                                                     
        · render a proposed consistency determination with                                                                      
          alternative measures as necessary.                                                                                    
        · render a final consistency determination                                                                              
                                                                                                                                
     (Exhibit 3  on page 12  of the first  report identifies                                                                    
     the consistency  review timeline)   (Exhibit 4  on page                                                                    
     13  gives  an  example  of  a  project  that  needed  a                                                                    
     consistency determination)                                                                                                 
                                                                                                                                
1:53:58 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON added  that key is the criteria  used in determining                                                               
whether the  activity is consistent  or not.  She  clarified that                                                               
it's  whether  the  activity  is  consistent  with  the  resource                                                               
agencies'  authorities,  statewide  standards,  and  the  coastal                                                               
districts'   enforceable  policies.     She   then  returned   to                                                               
paraphrasing  from  the  following  written  testimony  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     As  bureaucratic  processes  go  it  sounds  relatively                                                                    
     simple.  The complexity  and the associated controversy                                                                    
     come into play with  the establishment of the statewide                                                                    
     standards  and   the  enforceable  policies   that  the                                                                    
     coastal districts can establish.                                                                                           
                                                                                                                                
     Going through the conclusions one-by-one:                                                                                  
        1. We found that the regulatory changes in 11 AAC                                                                       
          112 and 114 are within state law and legislative                                                                      
          intent.  (Legislative intent is found on page 23                                                                      
          and 24 Part 1) and they have limited the ability                                                                      
         of coastal districts to establish enforceable                                                                          
          policies.                                                                                                             
                                                                                                                                
     Since  the  new   regulations  have  been  established,                                                                    
     coastal  districts   have  submitted   490  enforceable                                                                    
     policies and only 210 have  been approved.  Many of the                                                                    
     denials are based, at least in part, because                                                                               
        · The coastal district has not sufficiently                                                                             
          documented that a matter of local concern is not                                                                      
          already adequately addressed by a state or                                                                            
          federal law.                                                                                                          
                                                                                                                                
        · The coastal district could not provide a map that                                                                     
          met the written scientific evidence requirement                                                                       
          to support an area being designated as an                                                                             
          important habitat area.                                                                                               
                                                                                                                                
1:56:11 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON, in response to  Co-Chair Seaton, clarified that she                                                               
is working from the first  audit report [dated November 26, 2010]                                                               
and is currently discussing the  report conclusions that begin on                                                               
page 19.   In response to Representative P.  Wilson, Ms. Davidson                                                               
agreed  to inform  the committee  from  which page  in the  audit                                                               
report she is working.                                                                                                          
                                                                                                                                
1:56:46 PM                                                                                                                    
                                                                                                                                
MS.  DAVIDSON then  directed attention  to page  20 of  the audit                                                               
report, which discusses the changes  in the number of enforceable                                                               
policies.   Prior to  the 2003  and 2005  changes there  had been                                                               
over 1,300  enforceable policies.   However, since that  time 490                                                               
enforceable policies  have been proposed  of which 210  have been                                                               
approved.  She  attributed that substantial decrease  to the fact                                                               
that  there  was  a  reduction in  the  number  of  participating                                                               
coastal districts  and a change  in the law.   The change  was to                                                               
have  the  enforceable  policies   as  clear,  concise,  and  non                                                               
duplicative as possible.   Some of the duplication  was in regard                                                               
to a  coastal district  with an enforceable  policy that  was the                                                               
same as state statute, regulation,  or federal law.  Another area                                                               
of  duplication  was  with  coastal  districts  with  enforceable                                                               
policies  for federal  land, although  they don't  have authority                                                               
for such.   The  first audit  report focused  on the  reasons the                                                               
enforceable  policies hadn't  been  approved.   The audit  report                                                               
found  that  there  might  be  multiple  reasons  why  a  coastal                                                               
district's  enforceable  policy  had  been denied.    The  denial                                                               
could've  been because  the enforceable  policy had  already been                                                               
addressed by  a state or  federal law and didn't  have additional                                                               
scientific evidence to meet the designated area.                                                                                
                                                                                                                                
1:59:20 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  related his  understanding that  Coastal Resource                                                               
Service Areas (CRSA) can still submit areas for consideration.                                                                  
                                                                                                                                
MS. DAVIDSON confirmed that they  can propose them, but it's part                                                               
of the division's  responsibility to review them  and ensure they                                                               
don't  duplicate  a state  authority  or  standard.   In  further                                                               
response to Co-Chair Feige, Ms.  Davidson also confirmed that the                                                               
ability to amend is always available.                                                                                           
                                                                                                                                
2:00:02 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON pointed  out that page 22 of the  first audit report                                                               
provides a comparison by region  regarding the number of proposed                                                               
district plans  and the number  of approved district plans.   She                                                               
then  returned   to  paraphrasing  from  the   following  written                                                               
testimony [original punctuation provided]:                                                                                      
                                                                                                                                
     Those  thresholds for  designated  areas which  require                                                                    
     scientific  evidence   are  difficult   and  expensive.                                                                    
     (During  the  reevaluation  process  DCOM  proposed  in                                                                    
     draft  form  for  informal   public  to  eliminate  the                                                                    
     designated area requirements)                                                                                              
                                                                                                                                
     In  its evaluation  of the  ACMP process,  the National                                                                    
     Ocean  and Atmospheric  Administration's Office  (NOAA)                                                                    
     suggested  that   DNR  revisit  the   requirements  for                                                                    
     designated areas especially  those related to important                                                                    
     habitat and subsistence use.                                                                                               
                                                                                                                                
MS. DAVIDSON  said that although  DCOM does provide  some funding                                                               
to  the coastal  districts, scientific  evidence and  creation of                                                               
the maps is more expensive than the grant funds provided.                                                                       
                                                                                                                                
2:00:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  inquired as  to whether  there is  any                                                               
reason  why local  communities can't  hire  their own  consultant                                                               
with the  grant money.  She  opined that it would  be much better                                                               
if the community could hire its own consultant.                                                                                 
                                                                                                                                
MS.  DAVIDSON  explained  that the  second  audit  report,  dated                                                               
December 29,  2010, expressed the division's  recommendation that                                                               
consultants be allowed to represent  the coastal districts.  Many                                                               
of the coastal districts are  political subdivisions and it isn't                                                               
within  the  authority of  a  department  to make  determinations                                                               
regarding what  a political subdivision  can do in  operating its                                                               
own  entity.    While  the   agency  is  trying  to  foster  good                                                               
participation  in   the  program  by  the   stakeholders  of  the                                                               
community, the  division believes  they overstepped by  trying to                                                               
prohibit the coastal districts from using consultants.                                                                          
                                                                                                                                
2:02:57 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON  asked if there  is a reason  why so many  of the                                                               
enforceable  policies  were  rejected  when they  were  based  on                                                               
guidance  provided by  the division  for the  development of  the                                                               
plans.  He then inquired as to the background of the rejections.                                                                
                                                                                                                                
MS. DAVIDSON  said that she  didn't have a direct  answer because                                                               
the  division   didn't  review  all   of  them.     The  rejected                                                               
enforceable policies  that were  reviewed had  a common  theme of                                                               
establishing  that matter  of local  concern and  duplicity.   In                                                               
discussions with  the coastal districts,  it was  determined that                                                               
the  lack of  a  regulation  doesn't mean  an  issue hasn't  been                                                               
adequately  addressed.   Therefore,  if there's  a state  statute                                                               
that  says  an  entity  is   responsible  for  something  but  no                                                               
regulations defining  how that  responsibility will  be addressed                                                               
are  in place,  the issue  is deemed  as already  being addressed                                                               
when  it  comes  to  the  coastal  districts'  ability  to  write                                                               
enforceable  policies about  that issue.   The  coastal district,                                                               
she  explained,  can't  fill  in   the  gaps  when  there  is  no                                                               
regulation.                                                                                                                     
                                                                                                                                
2:05:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON  surmised then  that the  state ignored  the word                                                               
"adequately" and determined  that if it could be  addressed by an                                                               
agency,  it has  been adequately  addressed even  if the  coastal                                                               
district has concerns.                                                                                                          
                                                                                                                                
MS. DAVIDSON responded that Co-Chair  Seaton's remarks are a good                                                               
paraphrase,   but   she   couldn't  recall   whether   the   term                                                               
"adequately" is in  statute.  She recalled that  the language was                                                               
that  [the  enforceable policies]  "can't  be  duplicative of  an                                                               
authority of the  state agency."  Therefore, it's  deemed to have                                                               
been  addressed  if it's  in  statute.    For example,  with  DEC                                                               
regulations for spills and spill  containment, DEC expects a plan                                                               
in place  from the entity proposing  an activity if the  spill is                                                               
over  5,000-10,000 barrels.   A  coastal  community can't  decide                                                               
that it  would like a plan  that addresses a spill  of only 1,000                                                               
barrels  because DEC  already  has a  requirement,  and thus  the                                                               
local districts can't have an additional requirement.                                                                           
                                                                                                                                
2:08:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON, referring to  page 22, exhibit 8, footnote                                                               
28, asked if the audit delved into the details of footnote 28.                                                                  
                                                                                                                                
MS.  DAVIDSON  stated that  exhibit  8  is a  chart  illustrating                                                               
proposed  versus approved  designated  subsistence and  important                                                               
habitat areas.   The reason the northwest is so  low is because a                                                               
management  plan must  be in  place and  approved prior  to being                                                               
able  to have  the enforceable  policies approved.   The  lack of                                                               
approved management  plans was the  reason why  those enforceable                                                               
policies  weren't approved  as opposed  to there  being an  issue                                                               
with the policy itself.                                                                                                         
                                                                                                                                
REPRESENTATIVE HERRON asked  if the audit tried  to determine why                                                               
those management plans weren't approved.                                                                                        
                                                                                                                                
MS. DAVIDSON specified  that one management plan had  been in the                                                               
commissioner's  office and  had asked  that its  determination be                                                               
suspended, but she couldn't recall the reason for the others.                                                                   
                                                                                                                                
2:11:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE asked  if Representative  Herron  would like  the                                                               
committee to pursue that information.                                                                                           
                                                                                                                                
REPRESENTATIVE HERRON replied yes.                                                                                              
                                                                                                                                
2:12:12 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON  directed attention  to page 25  of the  first audit                                                               
report,  and continued  paraphrasing from  the following  written                                                               
remarks [original punctuation provided]:                                                                                        
                                                                                                                                
      2. As intended by the legislature, the DEC carveout                                                                       
          has excluded air, land and water quality permit                                                                       
          issues from ACMP reviews.                                                                                             
                                                                                                                                
     One of  the provisions of  Ch 24  SLA 03 was  to remove                                                                    
     air land  and water quality permits  issued under DEC's                                                                    
     authority  from the  ACMP  consistency review  process.                                                                    
     This removal or "carveout" did two things.                                                                                 
             · First it allows for DEC to conduct its                                                                           
               permit  review  process  concurrently  rather                                                                    
               than   consecutively  as   the  ACMP   review                                                                    
               process.   Since some  of DEC's  permits take                                                                    
               an   extended  period   of  time,   industry,                                                                    
               particularly likes  the concurrent permitting                                                                    
               aspects of the DEC carveout.                                                                                     
                                                                                                                                
             · The    DEC    carveout   also    functionally                                                                    
               eliminated  the opportunity  for any  coastal                                                                    
               district   to   develop  enforceable   policy                                                                    
               related  to  air,   land  and  water  quality                                                                    
               permit  issues under  the  authority of  DEC.                                                                    
               The  ACMP process  allows  the local  coastal                                                                    
               districts   to   have   a   say   -   through                                                                    
               enforceable   policies   on  projects   going                                                                    
               through   the  consistency   review  process.                                                                    
               However this voice  has essentially been shut                                                                    
               down by  the DEC  Carveout for air,  land and                                                                    
               water  quality permit  issues.   Also in  its                                                                    
               2008   reevaluation   project  one   of   the                                                                    
               proposals was to eliminate the DEC carveout.                                                                     
                                                                                                                                
2:14:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON  directed  attention   to  the  second  to  last                                                               
paragraph on  page 25, which  relates the industry's  belief that                                                               
the DEC  carveout has  reduced delays  in the  consistency review                                                               
process.    He asked  if  the  audit  reviewed whether  that  was                                                               
correct.                                                                                                                        
                                                                                                                                
MS.  DAVIDSON  recalled  that  when  the  division  reviewed  the                                                               
projects, it didn't  review whether it was delayed.   However, it                                                               
was apparent  that with the DEC  permits proceeding concurrently,                                                               
the consistency review started earlier  and thus should result in                                                               
an earlier  completion.  She  related her understanding  that the                                                               
air  quality permits  can take  an  extensive period  of time  to                                                               
obtain.  Therefore, merely overlapping  the processes allowed for                                                               
better efficiency.   In further response to  Co-Chair Seaton, Ms.                                                               
Davidson  explained  that  the  end  of  the  consistency  review                                                               
process can be  reached and knowledge gained in  terms of whether                                                               
there are any alternative measures  or other enforceable policies                                                               
prior to the DEC process.   Whereas when the DEC process was part                                                               
of  the  consistency  review  process,  both  pieces  had  to  be                                                               
complete prior  to a determination regarding  whether the project                                                               
was going to  be consistent or not.  Ms.  Davidson clarified that                                                               
a project must still obtain all  of its permits, but there is the                                                               
opportunity to  know the results of  the non DEC issues  prior to                                                               
the completion of the DEC process.                                                                                              
                                                                                                                                
2:17:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON related  his understanding  then that  a project                                                               
may  complete  the  consistency  review  process  prior  to  DEC,                                                               
although DEC may have been at the table with other agencies.                                                                    
                                                                                                                                
MS.  DAVIDSON replied  yes.   Therefore, upon  completion of  the                                                               
consistency review  process, an  applicant will know  whether the                                                               
project's  activity is  in accordance  with  state standards  and                                                               
whether  it's  within  the  enforceable  policies  of  the  ACMP.                                                               
Therefore, an applicant  will know of any issues that  need to be                                                               
mitigated if it's  a DEC permit that takes an  extended length of                                                               
time.                                                                                                                           
                                                                                                                                
2:19:31 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON surmised  that other  agencies will  be able  to                                                               
consult on issues that impact DEC permits.                                                                                      
                                                                                                                                
MS. DAVIDSON clarified  that DEC will follow  its own regulations                                                               
for issuing permits and if  that requires consultation with other                                                               
resource  agencies it  would  do so.    Additionally, the  public                                                               
comment process  for general permitting activities  is available.                                                               
Coastal districts have  the opportunity to go  through the public                                                               
comment  process with  regard  to the  issuance  of DEC  permits.                                                               
However,  under   ACMP  an  enforceable   policy  is   given  due                                                               
deference,  which means  [the applicant/project]  needs to  be in                                                               
compliance with the enforceable policy.   On the other hand, if a                                                               
coastal district  has a  comment on  a DEC  permit issue,  it's a                                                               
public comment issue and isn't given due deference.                                                                             
                                                                                                                                
2:21:36 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON,  referring to page 27,  continued paraphrasing from                                                               
the following written testimony [original punctuation provided]:                                                                
                                                                                                                                
      Determining if the revised statewide standards have                                                                       
       limited the ability to meet the ACMP objectives is                                                                       
     subjective and difficult to measure.                                                                                       
                                                                                                                                
     Many of  the changes clarified the  standards and eliminated                                                               
     duplicate authorities.  For  example the wetlands definition                                                               
     was redefined to match the federal definition.                                                                             
                                                                                                                                
     While DNR  believes that  ACMP objectives  can still  be met                                                               
     through comprehensive  application of state  resource agency                                                               
     statutes  and regulations,  plus state  standards.   Some of                                                               
     the resource agencies expressed  some doubt, particularly in                                                               
     the area  of habitat standards.   During NOAA's  review they                                                               
     encouraged  DNR  to  demonstrate the  effectiveness  of  the                                                               
     standards in protecting coastal  habitat (by monitoring) how                                                               
     the  standards are  implemented through  permitted projects.                                                               
     NOAA can't tell DNR to  change the state standards, but they                                                               
     are  suggesting  that the  outcomes  of  the standards  bear                                                               
     watching.                                                                                                                  
                                                                                                                                
2:23:10 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON directed the committee's attention to page 29 and                                                                  
continued paraphrasing from the following written remarks                                                                       
[original punctuation provided]:                                                                                                
                                                                                                                                
      3. And the final conclusion in this first report is                                                                       
         that the changes to the ACMP process have not                                                                          
          diminished the State's rights under the federal                                                                       
          [Coastal Zone Management Act of 1972] CZMA                                                                            
          program.                                                                                                              
                                                                                                                                
     The  state  still has  rights  with  regard to  federal                                                                    
     agencies  or  federal  permitted activities  within  or                                                                    
     outside the  coastal zone that  affects the  coast zone                                                                    
     of Alaska.                                                                                                                 
                                                                                                                                
     The state  has the  rights to evaluate  the consistency                                                                    
     of   those   federal   activities  with   the   State's                                                                    
     enforceable policies.                                                                                                      
                                                                                                                                
     However  to  the  extent  the  state  has  limited  the                                                                    
     development  of  enforceable  policies  and  designated                                                                    
     areas by  coastal districts it has  also then generally                                                                    
     limited  its extent  to comment  on federal  activities                                                                    
     for  those  same  issues. The  one  exception  is  that                                                                    
     regulations  do  allow  DNR   to  designate  areas  for                                                                    
     subsistence  and  important   habitat  areas  during  a                                                                    
     consistency review.   So even if a  designated area has                                                                    
     not been developed by a  coastal district the state can                                                                    
     still establish  that as a  designated area  during its                                                                    
     consistency review of federal activity.                                                                                    
                                                                                                                                
     That concludes the issues from the first report.                                                                           
                                                                                                                                
2:24:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON related her understanding  that coastal                                                               
districts do  have the right  to evaluate  a decision.   When the                                                               
coastal  districts  evaluate  a  decision,  they  meet  with  the                                                               
commissioner in an  informal meeting that occurs  within 45 days.                                                               
Whereas DEC's  appeals process is  a formal process  that usually                                                               
involves a hearing officer and can  be lengthy.  She asked if Ms.                                                               
Davidson  is suggesting  that  the  coastal districts  evaluation                                                               
process should be done within 45 days also.                                                                                     
                                                                                                                                
MS. DAVIDSON clarified  that the point is to  identify the effect                                                               
of the  DEC carveout.   Coastal districts don't  have enforceable                                                               
policies on water,  land, and air quality permit  issues as those                                                               
are under DEC's  authority.  If a coastal  district believes that                                                               
a consistency determination  has been made and  it disagrees with                                                               
that determination  and doesn't believe its  enforceable policies                                                               
have been  given sufficient due  deference, the  coastal district                                                               
can  elevate that  determination to  the DNR  commissioner.   The                                                               
aforementioned  is resolved  within 45  days  and is  more of  an                                                               
informal process.  In comparison,  a coastal district can't write                                                               
enforceable policies  that are given  due deference and  can only                                                               
provide  public comment  on DEC  permit issues.   If  the coastal                                                               
district moves  through the aforementioned  process and  tries to                                                               
appeal  a DEC  decision  to  issue or  not  issue  a permit,  the                                                               
process for  elevating is  different in that  it's a  more formal                                                               
process with a hearing officer.   Ms. Davidson explained that the                                                               
audit  attempts to  compare the  voice of  the coastal  districts                                                               
under DEC permitted  activities versus those that  go through the                                                               
consistency review process.                                                                                                     
                                                                                                                                
2:26:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  observed that  the audit  reports that                                                               
the two processes aren't equal,  and therefore she inquired as to                                                               
how it should be changed.                                                                                                       
                                                                                                                                
MS. DAVIDSON  answered that the  audit points out the  impacts of                                                               
the DEC  carveout and questions  whether the  legislature remains                                                               
satisfied with  the DEC  carveout.   The audit  isn't determining                                                               
whether the  DEC appeals process is  good or bad compared  to the                                                               
elevation  process in  the ACMP,  rather "when  you're evaluating                                                               
whether or  not the  DEC carveout is  working as  the legislature                                                               
intended, that's one of the impacts of it."                                                                                     
                                                                                                                                
REPRESENTATIVE P. WILSON  remarked that it may not  be an either-                                                               
or situation.   Perhaps, there could  be a compromise to  reach a                                                               
more "livable" situation.  Therefore, there's room for work.                                                                    
                                                                                                                                
2:29:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  asked whether  an enforceable  policy is  a local                                                               
law.                                                                                                                            
                                                                                                                                
MS. DAVIDSON responded,  "For the most part, no."   She explained                                                               
that   Alaska's  process   for   developing  coastal   districts'                                                               
enforceable  policies  is an  alternative  to  entities, most  of                                                               
which   are  political   subdivisions,   from  developing   local                                                               
ordinances.  These enforceable  policies gain enforcement because                                                               
they've been accepted and approved as such under the ACMP.                                                                      
                                                                                                                                
2:30:03 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON noted that when  the changes were implemented and                                                               
districts feared they would lose  the ability to make enforceable                                                               
policies, a  number of  districts incorporated  their enforceable                                                               
policies in borough municipal ordinances.   He asked if in such a                                                               
scenario,  the  project  developer   would  proceed  through  the                                                               
consistency review and in a  separate action would have to obtain                                                               
a permit from the borough.                                                                                                      
                                                                                                                                
MS.  DAVIDSON pointed  out that  page  18 of  the audit  compares                                                               
Alaska's program with  four other states.  There are  two ways in                                                               
which  to   do  this.     Alaska  has  primarily   allowed  local                                                               
governments to  participate in  reviews and  the comments  of the                                                               
local  governments, to  the extent  the enforceable  policies are                                                               
given due deference.  However,  in reviewing California, Florida,                                                               
Louisiana, and  Texas, many of  their local  enforceable policies                                                               
aren't included in  the state coastal plan,  which she attributed                                                               
to  the fact  that those  states  have more  experience and  well                                                               
developed local governments.  These  states are dealing with this                                                               
at the  local level with  local laws  and ordinances.   Since the                                                               
audit  report  didn't  delve  that  far  into  the  details,  Ms.                                                               
Davidson wasn't  sure how much is  being done at the  local level                                                               
in Alaska.                                                                                                                      
                                                                                                                                
2:33:12 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON  asked if the  audit report reviewed how  many of                                                               
the  municipal districts  adopted their  enforceable policies  as                                                               
local codes so that those permits are required.                                                                                 
                                                                                                                                
MS. DAVIDSON replied  no, but she directed attention to  a map on                                                               
page  6 of  the first  audit report  that identifies  the coastal                                                               
districts and which aren't currently participating in the ACMP.                                                                 
                                                                                                                                
2:34:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON asked  if under the DEC carveout,  the process is                                                               
such that  a coastal district  or municipality going  through the                                                               
administrative  hearing process  would  proceed  to the  superior                                                               
court if there's disagreement.                                                                                                  
                                                                                                                                
MS. DAVIDSON  answered that although  she knows that  through the                                                               
formal appeals  process there is  an avenue that leads  to court,                                                               
she didn't know all the steps.                                                                                                  
                                                                                                                                
2:35:15 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON moved to the  second audit report dated December 29,                                                               
2010.   She then paraphrased  from the following  written remarks                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     The next  report has additional conclusions  as well as                                                                    
     recommendations.                                                                                                           
                                                                                                                                
     We found  that while the  ACMP is operating  openly and                                                                    
     transparently  there  are   certain  areas  where  this                                                                    
     openness is lacking.  For example                                                                                          
                                                                                                                                
        1. There are no recordings or minutes taken for                                                                         
        working group meetings.                                                                                                 
                                                                                                                                
        2. DNR limits the distribution of consistency review                                                                    
        materials                                                                                                               
                                                                                                                                
       3. DNR has not kept participants actively informed                                                                       
       about the status of the ACMP reevaluation process                                                                        
        that started in 2008.                                                                                                   
                                                                                                                                
MS.  DAVIDSON clarified  that the  audit report  isn't addressing                                                               
whether  the Administrative  Procedures  Act  is being  followed,                                                               
rather it's  reviewing whether there's good  flow of information.                                                               
The  consistency   review  process  requires  a   lot  of  active                                                               
participation,  which means  that  communications are  essential.                                                               
The comments are with regard to  whether the ACMP is operating in                                                               
an  open  and   transparent  fashion.    She   then  returned  to                                                               
paraphrasing the following  written remarks [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     DNR's policy  of not allowing a  district consultant to                                                                    
     represent   the  district   on  a   consistency  review                                                                    
     disregards the autonomy of the  coastal districts.  You                                                                    
     have  to remember  that many  of the  coastal districts                                                                    
     are political  sub-division; cities  and boroughs.   We                                                                    
     believe  that  having  a   state  agency  tell  another                                                                    
     governmental unit what can and cannot be delegated is                                                                      
     overstepping.                                                                                                              
                                                                                                                                
2:37:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  inquired as  to the  reaction of  the ACMP                                                               
participants to the  areas sited where openness  is lacking, such                                                               
as the lack of recordings or minutes for working group meetings.                                                                
                                                                                                                                
MS. DAVIDSON pointed  out that the Division  of Legislative Audit                                                               
reports  contain the  agency's response.   Generally,  the agency                                                               
disagreed with the audit's observations.                                                                                        
                                                                                                                                
REPRESENTATIVE HERRON  commented that  it strikes him  as unusual                                                               
that the  department operated to the  letter of the law,  but not                                                               
within the spirit of the law.                                                                                                   
                                                                                                                                
REPRESENTATIVE    P.   WILSON    stated   her    agreement   with                                                               
Representative  Herron's  comments,  but added  her  belief  that                                                               
DNR's disagreement was purely because it felt attacked.                                                                         
                                                                                                                                
2:40:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON recalled  receiving comments  that not  only did                                                               
DNR  fail to  record the  meetings,  people were  told that  they                                                               
could  not record  the  meetings  themselves.   He  asked if  Ms.                                                               
Davidson received similar comments from district participants.                                                                  
                                                                                                                                
MS. DAVIDSON replied yes.                                                                                                       
                                                                                                                                
2:41:15 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON  related his assumption  that the  entire purpose                                                               
of the  consistency review  and the  enforceable policies  was to                                                               
have  a coordinated  action.   He  mentioned  the prohibition  of                                                               
consultants in  the ACMP.  He  then inquired as to  whether there                                                               
was  any  explanation  as  to  why there  was  a  prohibition  of                                                               
recording  the meetings  in order  to share  them with  the other                                                               
participants in the coastal district.                                                                                           
                                                                                                                                
MS. DAVIDSON  recalled discussions  about the  consultant issues,                                                               
but  didn't  recall  much  discussion   about  the  recording  of                                                               
minutes.   The  discussion  about the  consultants addressed  the                                                               
goal  of the  agency to  have  members of  the coastal  districts                                                               
actively  participate rather  than delegating  the participation.                                                               
Ms. Davidson said that the division's  view is that it's still up                                                               
to the coastal district to determine what it wants to do.                                                                       
                                                                                                                                
2:43:01 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON  said  he has  heard  frustration  from  coastal                                                               
districts  regarding the  inability/prohibition of  recording the                                                               
conversation to share with people within the community.                                                                         
                                                                                                                                
MS. DAVIDSON confirmed that the  division heard similar comments.                                                               
She  opined that  in many  of these  areas it  seems actions  and                                                               
intent  are at  cross  purposes.   In  order  to  have a  dynamic                                                               
process, people  have to be  able to participate, which  means it                                                               
has  to  be   made  as  easy  as  possible   to  participate  and                                                               
understand.                                                                                                                     
                                                                                                                                
2:44:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  asked if the  division had  the opportunity                                                               
to talk with  project applicants about their  experience with the                                                               
process before and after the changes.                                                                                           
                                                                                                                                
MS. DAVIDSON replied yes, but  noted from her auditing experience                                                               
that more unsatisfied people talk  to the division than satisfied                                                               
people.   Furthermore,  the audit  request drives  the review  as                                                               
well.                                                                                                                           
                                                                                                                                
2:46:02 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SEATON,  referring  to   language  in  the  audit  that                                                               
specifies  DCOM  maintains  two distribution  lists  for  project                                                               
reviews,  inquired as  to the  purposes of  the two  distribution                                                               
lists.                                                                                                                          
                                                                                                                                
MS. DAVIDSON  said that the  audit was  trying to explain  who is                                                               
getting  more  say and  more  material,  rather than  relating  a                                                               
compare:contrast issue.                                                                                                         
                                                                                                                                
2:47:23 PM                                                                                                                    
                                                                                                                                
MS.   DAVIDSON,   returning   to  her   presentation,   continued                                                               
paraphrasing  from  the  following  written  testimony  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     In  analyzing  the   organizational  placement  of  the                                                                    
     Alaska Coastal Management Program  we found that ACMP's                                                                    
     missions  is aligned  with any  of  the three  resource                                                                    
     agencies - DNR,  DFG or DEC.  Also  because the program                                                                    
     coordinates  activities  among  departments  the  other                                                                    
     agency that  could manage ACMP  could be the  Office of                                                                    
     the Governor.  So our conclusion  is that DNR is one of                                                                    
     the  appropriate   agencies  to  administer   the  ACMP                                                                    
     program.                                                                                                                   
                                                                                                                                
     We found  that the changes  in Chapter 24, SLA  03 have                                                                    
     centralized decision  making in the  DNR Commissioner's                                                                    
     Office  and  have  lessened   some  of  the  consensus-                                                                    
     building aspects of the ACMP consistency reviews.                                                                          
                                                                                                                                
     Some of  the changes which contribute  to the lessening                                                                    
     of the consensus building aspects include:                                                                                 
                                                                                                                                
          1. elimination of the Coastal Policy Council                                                                          
                                                                                                                                
          2. reduction in the number of district                                                                                
          enforceable policies                                                                                                  
                                                                                                                                
         3. transferring the program from the Office of                                                                         
          the Governor to a resource agency may have                                                                            
          strained relationship among program participants                                                                      
                                                                                                                                
          4. And, DEC is not as strong a participant since                                                                      
          DEC permits have been carved out of the                                                                               
          consistency review process.                                                                                           
                                                                                                                                
     Finally  we   conclude  that  the   legislature  should                                                                    
     reauthorize the  ACMP program.  This  program gives the                                                                    
     state  [the  ability]  to  formally  influence  federal                                                                    
     decisions regarding the coastal  zone.  Additionally it                                                                    
     coordinates  permitting  and   consistency  review  for                                                                    
     projects  and  developments  [which] aides  both  state                                                                    
     agencies as well as private  businesses in dealing with                                                                    
     the state  bureaucracy.   The Legislature  could simply                                                                    
     repeal the  repealer section of  uncodified law;  or if                                                                    
     the  Legislature  prefers  further  evaluation  of  the                                                                    
     program it could modify the  repealer section and reset                                                                    
     the sunset date to July 1, 2015 (4 years)                                                                                  
                                                                                                                                
2:49:57 PM                                                                                                                    
                                                                                                                                
MS. DAVIDSON continued:                                                                                                         
                                                                                                                                
     This report contains to two recommendations.                                                                               
                                                                                                                                
     First  that   DNR  allow   the  coastal   districts  to                                                                    
     designate their own representatives.                                                                                       
                                                                                                                                
     And  secondly  DNR  should  complete  its  two  ongoing                                                                    
     regulatory projects.                                                                                                       
                                                                                                                                
     The first  project is to  revise the ABC list  which is                                                                    
     already 3  years past  the deadline set  out in  Ch 31,                                                                    
     SLA 05.   (The importance  of the  ABC list is  that it                                                                    
     identifies  categories  and  description  of  uses  and                                                                    
     activities  that may  impact  the coastal  zone. It  is                                                                    
     these  categories  and  descriptions that  define  what                                                                    
     level of consistency review is  necessary - see page 17                                                                    
     for a description of an A, B and C activity)                                                                               
                                                                                                                                
     The  second   project  is   to  complete   the  program                                                                    
     reevaluation project  that DNR started in  2008.  While                                                                    
     this project has no statutory  deadline, there has been                                                                    
     a  substantial investment  of time  and resources  into                                                                    
     this project  and the statutory and  regulatory changes                                                                    
     should be  finalized and the respective  public process                                                                    
     should be completed.                                                                                                       
                                                                                                                                
2:51:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON inquired  as to the magic of  the four year                                                               
extension.                                                                                                                      
                                                                                                                                
MS.  DAVIDSON   related  that  the  division   believes  the  two                                                               
regulatory  projects, the  ABC  List and  the  completion of  the                                                               
reevaluation  project are  important.   There has  been a  lot of                                                               
work done and  the agency needs to complete them.   If it's going                                                               
to  take another  12-24 months  to complete  and implement  those                                                               
projects and another couple of  years to operate underneath those                                                               
programs, then four years would  allow for the aforementioned and                                                               
the return for an evaluation.                                                                                                   
                                                                                                                                
2:53:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON  relayed that there  has been some  question with                                                               
regard to  the ACMP  being in DNR  and its lack  of focus  on the                                                               
ACMP in comparison  to other projects.  He asked  if the division                                                               
received testimony  from agencies  as well as  individual coastal                                                               
districts  regarding where  the  ACMP would  be most  effectively                                                               
housed.                                                                                                                         
                                                                                                                                
MS.  DAVIDSON  responded that  the  division  received a  lot  of                                                               
comments regarding  the way  the ACMP  used to be  and how  it is                                                               
now,  but  didn't  receive  a   lot  of  specific  organizational                                                               
information.  In  terms of the best location for  the ACMP if the                                                               
program fits within the mission,  it is an appropriate placement.                                                               
When the  ACMP was located in  the Office of the  Governor it was                                                               
difficult for  it to get  attention.   She pointed out  that DNR,                                                               
ADF&G, and DEC all  have a lot of issues going on  as well as hot                                                               
button issues  that come and  go.   Therefore, one would  need to                                                               
review the  strength of the  division and whether  the management                                                               
is moving it  forward.  The division, she related,  tried to find                                                               
out where the  ABC List and the re-evaluation  projects died, but                                                               
there  was   no  clear  answer.     She  acknowledged   that  the                                                               
aforementioned   are  difficult   issues  on   which  to   obtain                                                               
consensus, but  expressed the  need to  make decisions.   Placing                                                               
the deadline  for the ABC List  in statute indicates the  need to                                                               
build consensus as well as make a decision.                                                                                     
                                                                                                                                
2:57:22 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SEATON questioned whether  it's worth placing in statute                                                               
again if  it was ignored in  the past.  From  the audit, Co-Chair                                                               
Seaton  surmised  that  DEC  was  somewhat  segregated  and  less                                                               
involved  than in  the past  because  it wasn't  included in  the                                                               
consistency  review.     He   asked  if   the  audit   found  the                                                               
aforementioned  to  be  a detriment  to  the  consistency  review                                                               
process or was it simply that they were on their own track.                                                                     
                                                                                                                                
MS.  DAVIDSON answered  that she  didn't recall  that there  were                                                               
delays because of the DEC carveout.   However, it did factor into                                                               
the  lessening  of  the consensus  building.    Although  there's                                                               
nothing  prohibiting  DEC   representatives  from  attending  and                                                               
participating in the  meetings, there's no incentive  for them to                                                               
do  so  either.    Again,  the  DEC  carveout  has  lessened  the                                                               
consensus building aspect of the consistency review process.                                                                    
                                                                                                                                
[HB 106 was held over.]                                                                                                         
                                                                                                                                
3:00:34 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:00 p.m.                                                                 

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