Legislature(2005 - 2006)BELTZ 211

03/16/2005 01:30 PM COMMUNITY & REGIONAL AFFAIRS


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled
= SB 102 COASTAL MANAGEMENT PROGRAMS
Moved CSSB 102(CRA) Out of Committee
= SB 112 TAX ON REAA RESIDENTS
Moved CSSB 112(CRA) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 16, 2005                                                                                         
                           1:35 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Gary Stevens, Chair                                                                                                     
Senator Bert Stedman                                                                                                            
Senator Thomas Wagoner                                                                                                          
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Albert Kookesh                                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 112                                                                                                             
"An Act imposing a tax on residents of regional educational                                                                     
attendance areas; and providing for an effective date."                                                                         
                                                                                                                                
     MOVED CSSB 112(CRA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
SENATE BILL NO. 102                                                                                                             
"An Act relating to district coastal management programs; and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
     MOVED CSSB 102(CRA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 102                                                                                                                  
SHORT TITLE: COASTAL MANAGEMENT PROGRAMS                                                                                        
SPONSOR(s): SENATOR(s) STEVENS G                                                                                                
                                                                                                                                
02/14/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/05       (S)       CRA, RES                                                                                               
03/14/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
03/14/05       (S)       Heard & Held                                                                                           
03/14/05       (S)       MINUTE(CRA)                                                                                            
03/16/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 112                                                                                                                  
SHORT TITLE: TAX ON REAA RESIDENTS                                                                                              
SPONSOR(s): SENATOR(s) BUNDE                                                                                                    
                                                                                                                                
02/23/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/05       (S)       CRA, FIN                                                                                               
03/09/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
03/09/05       (S)       Heard & Held                                                                                           
03/09/05       (S)       MINUTE(CRA)                                                                                            
03/16/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Chuck Harlamert                                                                                                                 
Department of Revenue (DOR)                                                                                                     
PO Box 110400                                                                                                                   
Juneau, AK  99811-0400                                                                                                          
POSITION STATEMENT:  Explained changes in CSSB 112                                                                            
                                                                                                                                
Mr. Kalenka                                                                                                                     
Alaskans for Efficient Government                                                                                               
No address provided                                                                                                             
POSITION STATEMENT:  Suggested changes to CSSB 112                                                                            
                                                                                                                                
Randy Bates                                                                                                                     
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1724                                                                                                          
POSITION  STATEMENT:   Administration representative  opposing SB                                                             
102                                                                                                                             
                                                                                                                                
Sandy Harbanuk                                                                                                                  
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Spoke in support of SB 102                                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  GARY  STEVENS called  the  Senate  Community and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  1:35:52  PM.                                                             
Present  were Senators  Stedman,  Ellis and  Chair Gary  Stevens.                                                               
Senator Wagoner arrived momentarily.                                                                                            
                                                                                                                                
                  SB 112-TAX ON REAA RESIDENTS                                                                              
                                                                                                                              
CHAIR GARY  STEVENS announced SB  112 to be up  for consideration                                                               
and asked for a motion to adopt the committee substitute (CS).                                                                  
                                                                                                                                
SENATOR BERT STEDMAN  motioned to adopt the \F version  CS for SB                                                               
112 as the working document. There  being no objection, it was so                                                               
ordered.                                                                                                                        
                                                                                                                                
CHAIR GARY STEVENS asked Mr. Harlamert to come forward.                                                                         
                                                                                                                                
1:36:56 PM                                                                                                                    
                                                                                                                                
CHUCK HARLAMERT, Department of Revenue (DOR), explained the                                                                     
following changes made in the \F version CS:                                                                                    
                                                                                                                                
          · Section 1 is new. Page 1, lines 8-9 puts in place                                                                   
        the requirements for a physical address  on the permanent                                                               
        fund dividend.  The change  is necessary  to enforce  the                                                               
        type of tax that  is based on  where a person  resides in                                                               
        the state.                                                                                                              
                                                                                                                                
          · Section 2, page 1, line 13 is a technical change to                                                                 
        specify that  individuals 21  years  of age  or older  on                                                               
        January 1 of the tax year would be subject to the tax.                                                                  
                                                                                                                                
          · Page 2, line 7 changes the date by which the tax                                                                    
        must be paid from  November 1 of the  subsequent calendar                                                               
      year to January 15 of the subsequent calendar year.                                                                       
                                                                                                                                
          · Page 2, line 13 change comports with more                                                                           
        traditional   withholding    practices    and    requires                                                               
        withholding  on   employee  paychecks   and  limits   the                                                               
        withholding to the lesser of 10 percent of the taxpayer's                                                               
        gross earnings or one-half of the tax per pay period.                                                                   
                                                                                                                                
          · Page 2, lines 17-23 add subsection (c)(1)-(3) to                                                                    
        give guidance  to  employers  for withholding.  It  holds                                                               
        employers harmless  for not  withholding if  the employee                                                               
        demonstrates prior withholding, previous payment, or that                                                               
        the 21-year age threshold isn't met.                                                                                    
                                                                                                                                
          · Page 2, line 28 recognizes that an employee might                                                                   
        have more tax withheld than is due and  that a refund may                                                               
        be claimed from the state.                                                                                              
                                                                                                                                
1:43:29 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN said he was curious how work derived from                                                                       
natural resource extraction might be handled.                                                                                   
                                                                                                                                
MR.  HARLAMERT explained  the  bill  doesn't direct  non-employee                                                               
compensation  arrangements  and the  state  would  prefer not  to                                                               
impose a  withholding requirement  where none  previously exists.                                                               
For  instance,   fishing  boat  owners   don't  have   a  federal                                                               
withholding requirement  for crewmembers  and the  state wouldn't                                                               
want to impose a state tax  because it would be more efficient to                                                               
deal directly with crewmembers.                                                                                                 
                                                                                                                                
CHAIR  GARY   STEVENS  restated  that  it   is  the  individual's                                                               
responsibility rather than the employer's responsibility.                                                                       
                                                                                                                                
MR. HARLAMERT said that's correct.                                                                                              
                                                                                                                                
1:44:59 PM                                                                                                                    
                                                                                                                                
SENATOR  JOHNNY  ELLIS  asked  for   a  restatement  of  the  age                                                               
requirement.                                                                                                                    
                                                                                                                                
MR. HARLAMERT explained  the bill taxes any  individual living in                                                               
the specified  areas that  are 21  years of age  or older  on the                                                               
first of the year.                                                                                                              
                                                                                                                                
SENATOR ELLIS questioned why age 21 is used rather than age 18.                                                                 
                                                                                                                                
MR. HARLAMERT said that's the way the bill is written.                                                                          
                                                                                                                                
SENATOR  ELLIS referenced  page  2,  line 10  and  asked if  non-                                                               
monetary compensation would be considered.                                                                                      
                                                                                                                                
MR. HARLAMERT replied that section  relates to an individual that                                                               
has not  had the tax  withheld by  an employer so  the individual                                                               
would pay the tax directly to the state.                                                                                        
                                                                                                                                
SENATOR ELLIS pressed for an  explanation of "other compensation"                                                               
and   whether  it   might  include   monetary  and   non-monetary                                                               
compensation.                                                                                                                   
                                                                                                                                
MR. HARLAMERT opined it was simply necessary language.                                                                          
                                                                                                                                
SENATOR  ELLIS  asked  if compensation  includes  benefit  beyond                                                               
salary.                                                                                                                         
                                                                                                                                
MR. HARLAMERT said he interprets  that to be taxable compensation                                                               
and not benefits.                                                                                                               
                                                                                                                                
CHAIR  GARY  STEVENS  asked  if  employers  could  ever  be  held                                                               
accountable for an employee's tax obligation.                                                                                   
                                                                                                                                
MR.  HARLAMERT  replied  the normal  mechanism  in  the  personal                                                               
income tax field  and the best practice from  DOR's standpoint is                                                               
to  impose a  withholding  requirement on  the  employer. If  the                                                               
employer  doesn't  withhold, then  the  employer  should be  held                                                               
liable. Furthermore, if the employer  withholds and then fails to                                                               
pay  the  state  then  the employer  should  be  held  personally                                                               
liable. It's not  perfectly clear in SB 112, but  that appears to                                                               
be the intent.                                                                                                                  
                                                                                                                                
CHAIR GARY STEVENS  remarked the employer would  have to maintain                                                               
an accounting system to show that  all employees have had the tax                                                               
withheld, have previously paid the  tax, or aren't subject to the                                                               
tax by virtue of age.                                                                                                           
                                                                                                                                
MR. HARLAMERT replied that's essentially true.                                                                                  
                                                                                                                                
1:50:57 PM                                                                                                                    
                                                                                                                                
SENATOR CON  BUNDE, sponsor,  reemphasized the  psychological and                                                               
fiscal issues  associated with SB  112. The fiscal issue  is that                                                               
residents of organized,  home rule and first class  cities make a                                                               
local  contribution  for the  operation  of  their schools  while                                                               
residents  of   the  19  REAAs   in  the  state  make   no  local                                                               
contribution  for schools.  The Department  of Revenue  indicates                                                               
that the  unorganized areas of  the state have over  $500 million                                                               
in earned income yet the  schools operate on state funding alone.                                                               
The  proposed contribution  amounts  to about  $35  per month  to                                                               
support schools. That  is not onerous and people  of modest means                                                               
living  in organized  areas do  pay  to fund  schools. The  other                                                               
issue is  philosophical; you  value and take  better care  of the                                                               
things you help pay for, he asserted.                                                                                           
                                                                                                                                
1:53:35 PM                                                                                                                    
                                                                                                                                
SENATOR ELLIS asked why he decided to use age 21 rather than 18.                                                                
                                                                                                                                
SENATOR BUNDE said  he wanted to make sure  that individuals were                                                               
well  out of  high school  before becoming  obligated to  pay the                                                               
tax.                                                                                                                            
                                                                                                                                
SENATOR ELLIS  noted that the bill  makes it clear that  it's not                                                               
constitutional to  dedicate funds  so the  money coming  from the                                                               
REAAs  wouldn't  necessarily  go  back  to  the  same  areas  for                                                               
education funding.  Therefore, he questioned whether  the sponsor                                                               
intended for the  tax to supplant or  supplement existing general                                                               
fund money that goes for education.                                                                                             
                                                                                                                                
SENATOR  BUNDE  replied it  should  not  supplant current  funds,                                                               
rather it should  add to current funds. Certainly  he agrees with                                                               
the prohibition  regarding dedicating  funds, but it  is possible                                                               
to indicate legislative intent and put up a moral fence.                                                                        
                                                                                                                                
Although the money  generated with the proposed tax  might not go                                                               
to the specific  district that raised the money, it  would add to                                                               
the  general fund  support of  the basic  per student  dollar and                                                               
consequentially be of  benefit to the population  that raised the                                                               
money.                                                                                                                          
                                                                                                                                
SENATOR ELLIS acknowledged that if  this were to come to fruition                                                               
it would  be an  overall gain for  state education.  He mentioned                                                               
that  when money  is  raised  for schools  in  Anchorage it  goes                                                               
directly to Anchorage  schools, but money raised in  a rural area                                                               
wouldn't  necessarily improve  schools  in  the particular  area.                                                               
There's  a difference  between local  effort going  to the  local                                                               
schools and local effort going to the state treasury.                                                                           
                                                                                                                                
SENATOR  BUNDE replied  the point  is valid,  but the  REAAs have                                                               
been state sustained  for a number of years and  as a consequence                                                               
have been  using money that  could have gone to  organized areas.                                                               
He opined it would be a long time before they catch up.                                                                         
                                                                                                                                
SENATOR ELLIS remarked  it should be remembered that  most of the                                                               
natural  resources in  the state  come from  rural areas  and all                                                               
residents  share those  common property  resources and  the value                                                               
derived from them.                                                                                                              
                                                                                                                                
SENATOR BUNDE replied  the resources in the  state aren't equally                                                               
distributed, but according to the  constitution, they are held in                                                               
trust for all Alaskans so the argument is moot.                                                                                 
                                                                                                                                
1:58:30 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  asked for  a  comment on  the argument  that                                                               
rural areas shouldn't have to pay  a head tax because the federal                                                               
government  sends  PL874 money  to  pay  for education  in  those                                                               
areas.                                                                                                                          
                                                                                                                                
SENATOR  BUNDE   replied  he  doesn't   consider  that   a  local                                                               
contribution.  Furthermore, Anchorage  receives  PL874 money  and                                                               
the funds  are passed  through to the  state. Surely  rural areas                                                               
would object if Anchorage were to keep those substantial funds.                                                                 
                                                                                                                                
CHAIR  GARY STEVENS  summarized saying  that a  head tax  doesn't                                                               
jeopardize PL874 funds in any way.                                                                                              
                                                                                                                                
SENATOR BUNDE agreed.                                                                                                           
                                                                                                                                
SENATOR STEADMAN  questioned whether it's  legal to impose  a tax                                                               
according to address.                                                                                                           
                                                                                                                                
SENATOR BUNDE  replied legislative  legal hasn't  indicated there                                                               
is any  constitutional problem. The constitution  requires people                                                               
living in  organized areas to  make a local contribution  so this                                                               
proposal is obviously legal.                                                                                                    
                                                                                                                                
SENATOR  STEDMAN asked  for verification  that  people living  in                                                               
unorganized areas  that have  already volunteered  to pay  tax to                                                               
support schools wouldn't be subjected to this tax.                                                                              
                                                                                                                                
SENATOR BUNDE said that's correct; no one would be double taxed.                                                                
                                                                                                                                
There were no further questions.                                                                                                
                                                                                                                                
2:01:58 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS  asked  Senator  Bunde  if  he  had  summary                                                               
comments.                                                                                                                       
                                                                                                                                
SENATOR  BUNDE said  this is  a fairness  issue and  will provide                                                               
opportunity  for   those  who   would  like   to  make   a  local                                                               
contribution,  but   don't  want  another  layer   of  government                                                               
imposed.                                                                                                                        
                                                                                                                                
SENATOR ELLIS asked  if passing this tax would stop  the push for                                                               
mandatory boroughs  because that  seems to  be what  Dick Schultz                                                               
expects.                                                                                                                        
                                                                                                                                
SENATOR  BUNDE  suggested Mr.  Schultz  is  correct that  passage                                                               
might  dampen the  arguments  in the  political  arena, but  this                                                               
Legislature certainly can't bind a future Legislature.                                                                          
                                                                                                                                
SENATOR  ELLIS  asked  if  that  means  that  he  would  make  no                                                               
guarantee that  the drive for  mandatory borough  formation would                                                               
stop if this were to pass.                                                                                                      
                                                                                                                                
SENATOR  BUNDE replied  there  is no  way he  could  make such  a                                                               
guarantee in good faith.                                                                                                        
                                                                                                                                
2:04:47 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS  noted  the bill  had  a  Finance  Committee                                                               
referral then asked for a motion.                                                                                               
                                                                                                                                
SENATOR  STEDMAN motioned  to report  CSSB 112(CRA)  and attached                                                               
fiscal notes from committee with individual recommendations.                                                                    
                                                                                                                                
2:05:20 PM                                                                                                                    
                                                                                                                                
SENATOR  ELLIS objected  and said  his objection  stems from  the                                                               
fact  that  he  wasn't  comfortable   that  the  issue  had  been                                                               
thoroughly vetted.                                                                                                              
                                                                                                                                
2:05:54 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY  STEVENS  stated  that  he  inadvertently  overlooked                                                               
someone that wanted to provide testimony.                                                                                       
                                                                                                                                
MR. KALENKA said that although he  is the President of Alaska for                                                               
Efficient Government  today he  was speaking  for himself.  It is                                                               
his practice  to advocate against taxes,  but he is very  much in                                                               
favor or  user taxes. If  you use a  service, then you  assume an                                                               
obligation to pay for that  service. He suggested school children                                                               
do get a Permanent Fund Dividend,  which could be used to pay for                                                               
educational services.                                                                                                           
                                                                                                                                
2:09:19 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  asked  Senator Ellis  if  he maintained  his                                                               
objection to moving SB 112.                                                                                                     
                                                                                                                                
SENATOR ELLIS said he did.                                                                                                      
                                                                                                                                
CHAIR GARY  STEVENS asked  for a  roll call  vote. The  motion to                                                               
move prevailed  3 to 1  with Senators Stedman, Wagoner  and Chair                                                               
Gary Stevens voting yea and Senator Ellis voting nay.                                                                           
                                                                                                                                
CSSB 112(CRA), \F  version, and attached fiscal  notes moved from                                                               
committee with individual recommendations.                                                                                      
                                                                                                                                
2:10:07 PM                                                                                                                    
                                                                                                                                
               SB 102-COASTAL MANAGEMENT PROGRAMS                                                                           
                                                                                                                                
CHAIR GARY STEVENS  announced SB 102 to be  up for consideration.                                                               
He noted the \F version  committee substitute (CS) was before the                                                               
committee and asked Mr. Letch to come forward.                                                                                  
                                                                                                                                
2:12:04 PM                                                                                                                    
                                                                                                                                
DOUG  LETCH, staff  to  Senator Gary  Stevens,  explained the  \F                                                               
version  CS  mirrors HB  189  and  would  base the  deadline  for                                                               
district coastal program revisions  and annulment of the existing                                                               
program on federal approval of  the state program. The concept is                                                               
to  give coastal  districts additional  time  to develop  revised                                                               
plans so  that the public has  time to understand and  comment on                                                               
the new program the state and federal government agree upon.                                                                    
                                                                                                                                
At  the end  of the  previous hearing  the Department  of Natural                                                               
Resources asked  to be  given the opportunity  to respond  to the                                                               
committee substitute (CS).                                                                                                      
                                                                                                                                
2:12:45 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN  asked for a recap  of the status of  the various                                                               
coastal districts  and what  would happen  if the  extension were                                                               
granted.                                                                                                                        
                                                                                                                                
2:14:26 PM                                                                                                                    
                                                                                                                                
RANDY BATES, Deputy Director of  Project Planning And Permitting,                                                               
Department   of  Natural   Resources  (DNR),   recapped  previous                                                               
testimony.  There are  35 established  coastal  districts and  33                                                               
districts currently have approved  plans. House Bill 191 required                                                               
all  coastal  districts to  review  and  renew their  plans  then                                                               
resubmit them  according to the  implementing regulations  of the                                                               
bill. Of  the 33  coastal districts with  coastal plans,  27 have                                                               
plan  revision commitments.  Of  the 27  that  have committed  to                                                               
making  revised plans,  the department  knows  that 16  districts                                                               
will put  draft plans  out for  public review  by mid  April. The                                                               
remaining 11  districts are  expected to  have the  revised plans                                                               
out for public review by the end of April.                                                                                      
                                                                                                                                
The department  made about $900,000 available  to provide partial                                                               
help for this  effort and part of the grant  requirement was that                                                               
the plans be  complete by July 1, 2005. Having  the plans out for                                                               
public review by  the end of April would put  the 27 districts on                                                               
track to meet the deadline.                                                                                                     
                                                                                                                                
CHAIR GARY  STEVENS asked Mr.  Bates whether he had  any comments                                                               
on the CS.                                                                                                                      
                                                                                                                                
MR. BATES  replied he had no  additional comments on the  CS, but                                                               
the  department did  provide a  new  fiscal note  to reflect  two                                                               
years additional  staff costs. Federal  funding runs out  in 2006                                                               
so the fiscal note reflects costs for both 2007 and 2008.                                                                       
                                                                                                                                
CHAIR  GARY  STEVENS  noted that  the  department  believes  that                                                               
extending  the  deadline for  one  year  would result  in  nearly                                                               
$200,000 in additional costs for 2007 and for 2008.                                                                             
                                                                                                                                
MR. BATES clarified the CS  actually extends the deadline for one                                                               
year  beyond  Oceans  and   Coastal  Resource  Management  (OCRM)                                                               
approval, which moves it into the two year timeframe.                                                                           
                                                                                                                                
CHAIR GARY  STEVENS recalled that everyone  that testified during                                                               
the  previous   hearing  spoke  in  support   of  the  extension.                                                               
Districts  asking for  additional time  included: Aleutians  West                                                               
Coastal Resource Service Area (CRSA),  Cenaliulriit CRSA, City of                                                               
Craig,  City  and Borough  of  Juneau,  Kenai Peninsula  Borough,                                                               
Kodiak Island  Borough, Lake and  Peninsula Borough,  North Slope                                                               
Borough.  Although  the  districts   said  they  could  meet  the                                                               
deadline, everyone  agreed that  the plans wouldn't  be complete;                                                               
rather they would need additional and substantial revisions.                                                                    
                                                                                                                                
He questioned  the justification for  the new fiscal note  for an                                                               
additional $200,000  per year when the  department has recognized                                                               
that substantial  revisions would  be needed and  those revisions                                                               
would be funded out of normal staffing.                                                                                         
                                                                                                                                
MR. BATES replied the fiscal note  reflects the fact that the one                                                               
time  congressional allocation  of Coastal  Impact Program  money                                                               
expires  7/1/05.  The key  staff  that  will  be looking  at  the                                                               
mapping requirements  and enforcement policies included  with the                                                               
plan  revisions  are  funded  out  of  that  pot  of  money.  The                                                               
department doesn't have  the money to carry the  staff beyond the                                                               
deadline.                                                                                                                       
                                                                                                                                
CHAIR GARY  STEVENS asked if  the substantial revisions  would be                                                               
funded thru normal staffing.                                                                                                    
                                                                                                                                
MR.  BATES  said  he  wanted  to be  clear  that  submitting  the                                                               
district  plan  revisions  doesn't   end  the  planning  process.                                                               
Districts  can continue  to refine  their coastal  plans and  the                                                               
current staff  is set  up to complete  the requirements  of House                                                               
Bill 191  through June  30, 2006.  At that  point some  monies to                                                               
keep  all  the  current  staff   on  will  expire.  However,  the                                                               
department does expect to assist  two to three districts per year                                                               
with basic planning requirements and  the staffing is adequate to                                                               
handle those.                                                                                                                   
                                                                                                                                
2:23:23 PM                                                                                                                    
                                                                                                                                
SENATOR  ELLIS  said he  recently  heard  that the  Governor  was                                                               
threatening to do  away with the entire coastal zone  plan in the                                                               
state if the federal government  didn't capitulate on a number of                                                               
points that  he deemed  important. He suggested  there must  be a                                                               
better   way  to   resolve   differences   than  a   head-to-head                                                               
confrontation.                                                                                                                  
                                                                                                                                
MR. BATES replied the state  has engaged in negotiations with the                                                               
granting and  approving agency  (OCRM) for  two years,  but "they                                                               
didn't come to table  the way we expected or asked  them to so we                                                               
are in  the situation we're  in." There is a  basic philosophical                                                               
difference between what  Washington D.C. wants in  a coastal plan                                                               
and  what the  legislation  passed in  2001  and the  regulations                                                               
promulgated  in   implementing  the  bill.  The   state  wants  a                                                               
streamlined  non-redundant  program and  OCRM  is  pushing for  a                                                               
program that  duplicates existing state  and federal law.  One of                                                               
the reasons the  Murkowski Administration opposes SB  102 is that                                                               
if the timeframe  is extended, the state is  playing into federal                                                               
hands in terms  of federal management of state  resources. "If we                                                               
don't keep  OCRM working  hard, they're going  to find  that they                                                               
can continue to push the state  to a program that we simply don't                                                               
agree with - that is not going to work for Alaska."                                                                             
                                                                                                                                
2:26:13 PM                                                                                                                    
                                                                                                                                
SENATOR  ELLIS remarked  that's a  bad  sign for  the bill  being                                                               
signed into law.                                                                                                                
                                                                                                                                
CHAIR GARY STEVENS agreed.                                                                                                      
                                                                                                                                
CHAIR GARY  STEVENS announced a  brief recess from 2:26:21  PM to                                                             
2:27:49 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  reconvened the  meeting and  noted that  the                                                               
bill   had  both   Resource  Committee   and  Finance   Committee                                                               
referrals.                                                                                                                      
                                                                                                                                
2:28:03 PM                                                                                                                    
                                                                                                                                
SANDRA HARBANUK,  Juneau resident, said she  didn't come prepared                                                               
to testify,  but felt compelled to  do so after listening  to the                                                               
previous  testimony. She  is a  former  coastal project  reviewer                                                               
with  the  Division of  Governmental  Coordination,  DNR, and  is                                                               
currently  employed  as a  consultant  working  on seven  of  the                                                               
district coastal plans.                                                                                                         
                                                                                                                                
The coastal districts that testified  previously didn't point out                                                               
some of the  very major and significant  problems associated with                                                               
rewriting some of the plans.  The disagreements with OCRM are not                                                               
simple  and perhaps  that's  why the  districts  shied away  from                                                               
pointing them out.                                                                                                              
                                                                                                                                
House Bill 191 has it's own  set of problems, but the regulations                                                               
that DNR  promulgated are stultifying  and don't comply  with the                                                               
standards  that  are  set  out  in  federal  law.  Districts  are                                                               
constrained with  regard to  what they  can write  policies about                                                               
and   the  regulations   serve  as   a  straitjacket   for  local                                                               
participation in the state and federal processes.                                                                               
                                                                                                                                
She asked the  committee to carefully consider  the issue because                                                               
the  testimony   just  given  misrepresented  what   is  actually                                                               
happening.                                                                                                                      
                                                                                                                                
2:30:43 PM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  summarized her  position is  that the  local                                                               
coastal zone management  districts are trying to  figure out what                                                               
to do and  how to write plans when there  is no agreement between                                                               
federal and state agencies.                                                                                                     
                                                                                                                                
MS.  HARBANUK  said the  guidance  coming  out  of DNR  has  been                                                               
continually changing;  the language is confusing  for determining                                                               
whether an  issue has been legitimately  and adequately addressed                                                               
before a policy can be written.  In addition there is the problem                                                               
associated with  having to designate  areas without  knowing what                                                               
an  area might  be used  for.  Overall, the  regulations place  a                                                               
stranglehold on what districts can do.                                                                                          
                                                                                                                                
CHAIR GARY  STEVENS questioned what communities  might accomplish                                                               
with the additional year.                                                                                                       
                                                                                                                                
MS. HARBANOK responded  she expects that districts  would work on                                                               
plan parts such  as resource inventory and analysis  and wait for                                                               
state and federal agreement. This  would allow them time to write                                                               
good policies  that would work  for the individual  districts. It                                                               
would also allow  time for the public  participation process that                                                               
the districts spoke to during the previous hearing.                                                                             
                                                                                                                                
There were no further questions or comments.                                                                                    
                                                                                                                                
CHAIR GARY STEVENS asked for a motion.                                                                                          
                                                                                                                                
2:33:22 PM                                                                                                                    
                                                                                                                                
SENATOR STEDMAN motioned to report CSSB 102(CRA) and attached                                                                   
fiscal notes from committee with individual recommendations.                                                                    
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
There being no further business to come before the committee,                                                                   
Chair Gary Stevens adjourned the meeting at 2:33:42 PM.                                                                       

Document Name Date/Time Subjects