Legislature(2011 - 2012)SENATE FINANCE 532
04/17/2011 10:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB99 | |
| HB155 | |
| HB183 | |
| HB106 | |
| HB183 | |
| HB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 99 | TELECONFERENCED | |
| + | HB 155 | TELECONFERENCED | |
| + | HB 183 | TELECONFERENCED | |
| + | HB 106 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 17, 2011
10:11 a.m.
10:11:12 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 10:11 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Senator Joe Paskvan, Sponsor; Representative Kurt Olsen,
Sponsor; Representative Alan Dick, Sponsor; Representative
Alan Austerman; Representative Mike Chenault;
Representative Anna Fairclough; Representative Eric Feige;
Representative Mike Hawker; Representative Bob Herron;
Sheila Peterson, Staff, Representative Dick; John Burns,
Attorney General, Department of Law; Larry Hartig,
Commissioner, Department of Environmental Conservation;
Daniel S. Sullivan, Commissioner, Department of Natural
Resources; Mike Satre, Executive Director, Council of
Alaska Producers.
PRESENT VIA TELECONFERENCE
Luke Hopkins, Fairbanks North Star Borough, Mayor; Paul D.
Kendall, Self.
SUMMARY
SB 99 HEATING FUEL ENERGY RELIEF
SB 99 was HEARD and HELD in committee for further
consideration.
CSHB 106(FIN)
COASTAL MANAGEMENT PROGRAM
CSHB 106(FIN) was HEARD and HELD in committee for
further consideration.
CSHB 155(L&C)
PUBLIC CONSTRUCTION CONTRACTS
CSHB 155(L&C) was REPORTED out of committee with
a "do pass" recommendation and with previously
published fiscal note: FN1 (LWF).
CSHB 183(FIN) am
APPLICATION OF VILLAGE SAFE WATER ACT
CSHB 183(FIN) am was REPORTED out of committee
with a "do pass" recommendation and with
previously published fiscal note: FN1 (DEC).
SENATE BILL NO. 99
"An Act relating to a heating fuel energy relief
program; and providing for an effective date."
10:12:21 AM
Co-Chair Stedman discussed that his intent was to adopt the
CS for SB 99. He explained that the bill would be heard and
held for future work over the interim.
Co-Chair Hoffman MOVED to ADOPT CSSB 99 Work Draft 27-
LS0507\M (Kane, 4/11/11) as a working document.
Co-Chair Stedman OBJECTED for purpose of discussion.
SENATOR JOE PASKVAN, SPONSOR, explained that the CS made
two changes to the bill. First, it included both number 1
and number 2 fuels (Page 2, Lines 14 and 15). Second, it
eliminated a section in order to include a more broad
application.
Co-Chair Stedman WITHDREW his OBJECTION, and there being NO
further OBJECTION the CS SB 99 Work Draft 27-LS0507\M
(Kane, 4/11/11) was ADOPTED.
10:15:08 AM
Senator Paskvan discussed that the bill pertained to
heating fuel energy relief. He read from the Sponsor
Statement (copy on file) and explained that the goal was to
present a solution to the serious issue that faced
approximately 80,000 Alaskan households that used heating
oil as their primary heating source. The program would
apply to all retail sales of number 1 and number 2 heating
fuels. The program was ambitious and was designed to offer
relief to the state's residential consumers. He expounded
that Alaskans who relied on heating oil to keep warm during
the winters needed a specific and short-term solution that
met their needs. He believed that the bill allowed the
opportunity for long-term solutions to be considered,
adopted, and implemented in the state. During the past
several years the discretionary income for many residents
in the Interior, Southwest, and Southeast Alaska had ceased
to exist. He relayed that the rising cost of heating oil
was too expensive for many Alaskans to pay and was
"crushing" the average Alaskan. The high price of fuel was
occurring during a time that the state was enjoying a
surplus due to the high price of crude oil. He expressed
that the high price in heating oil had the potential to
economically devastate individual Alaskans and their
families. The bill would require the State of Alaska to
offset the home heating costs when the price of a barrel of
crude oil rose to a point where the state was enjoying
budget surpluses. He expounded that it was reasonable for
residents to pay $2.50 per gallon while the state paid the
balance to home heating dealers from budget surpluses if
the price of heating oil triggered the measures included in
SB 99. The temporary solution would allow residents to work
on long-term solutions that would restore optimism about
the state's economic future. He expressed that the proposed
legislation would allow the state to focus on its number
one priority that was renewable and sustainable energy
solutions and would protect Alaskan families.
Senator Paskvan communicated that the bill was designed to
be easily administrated. Currently distributors of home
heating oil were required to send the State of Alaska a
monthly breakdown of the quantities of the various
petroleum products that they sold, including home heating
oil. He explained that the quantities of heating oil were
easy to verify and were objectively determinable. The bill
was intended to be efficient and did not require massive
paperwork or government employment to operate. The state
would make the payment directly to the heating oil
distributors rather than to tens of thousands of
individuals. He elaborated that there were approximately
eight or nine distributors in Interior Alaska and there
were a limited number in Southwest Alaska; therefore, the
program would run efficiently. The bill required an
increase to the consumer price of heating oil during each
of the next three years, which would provide the incentive
for Alaskans to maintain the weatherization programs and
efficiency in heating costs. The bill used the New York
Mercantile Exchange (NYMEX) as a benchmark for triggers;
however, with the recent separation in the pricing between
West Texas Intermediate (WTI) and Alaska North Slope (ANS)
pricing it was possible that an ANS benchmark could be
used. He relayed that there could be alternatives such as
using the benchmark and if it hit a certain benchmark price
the price per gallon could be paid down. He discussed that
the average annual consumption in Alaska was between 800
and 1000 gallons. He reiterated the bill aimed to provide
protection for the households that heated with heating oil
and to keep them from getting crushed by high prices. He
looked forward to working with the committee on the
legislation during the interim.
10:19:46 AM
Co-Chair Stedman wondered whether the the bill would buy
down heating fuel at a BTU equivalency.
Senator Paskvan replied that the bill currently used the
NYMEX benchmark. He referred to benchmarks on Page 6 of the
Legislative Research Report dated April 11, 2011 (copy on
file) that included the average price per gallon at $2.50
and approximately $70 per barrel. The bill used the
benchmark price of a barrel of crude oil to trigger the
payment.
Co-Chair Stedman asked how the bill would bring parity for
the residents that heated with fuel oil and residents that
heated with natural gas. He discussed that natural gas
available in the Railbelt area was approximately one-third
the price of hydro, which on a BTU equivalency was around
$3.80 to $4.00 oil.
Senator Paskvan responded that alternative heating used
throughout the state could be explored during the interim.
A benchmark could be established based on electric or BTU
in order to determine how to distribute from the surplus to
Alaskans in need.
10:22:26 AM
Co-Chair Stedman thought it would be helpful to have an
energy comparison between the BTU equivalencies for
different energy sources that included wood, natural gas,
hydro and diesel fuel, and coal. He discussed a Forest
Service study that compared what it cost to heat a 1,800 to
2,000 square foot house in Southeast and also compared
different areas such as Sitka, which was relatively warm
and Fairbanks, which was cold.
Senator Paskvan agreed. He explained that there had been an
ongoing discussion related to the BTU equivalency basis
between the regions and looking at the various cost
structures such as hydroelectric power, natural gas, and
number 1 or number 2 fuels. He stressed that many Alaskans
in the Interior had to supplement or displace their oil
with wood furnaces, which had resulted in serious and
negative health effects through a process related to air
quality called PM2.5. He relayed that in the Interior oil
distributors made deliveries in 100 gallon increments and
at $4.00 per gallon many people could not afford the cost
for one delivery. He knew people that had been forced to
fill five gallon jugs with two or three gallons of diesel
fuel at the gas station in order to get through one night.
The problem was very real throughout Alaska and needed to
be addressed. He discussed that when the price of crude
reached $120 to $130 to $140 a barrel in 2008 it resulted
in prices of $4.00 to $4.50 per gallon in Interior Alaska
that were triple the amount from a decade earlier. He
opined that it was a serious economic problem that
challenged the economic sustainability of the entire
community.
10:26:12 AM
Senator Olson asked what the bill was modeled after and
whether there were national or international models that
were aimed at alleviating energy problems. He appreciated
the bill and explained that communities on the North Slope
came from the "breadbasket" of Alaska but paid the highest
price for fuel. He stressed that the bill was not the
answer to all energy problems in the state, but that it
would take the edge off for some residents.
Senator Paskvan replied that he had seen the problem and
worked to move forward towards a solution. The bill had not
been based on a specific model, but he hoped there was a
national or international model that was based on a
sovereign that had a surplus created by the high cost of
crude oil that could benefit its residents.
Senator Olson had been informed that there was a model for
Middle Eastern countries, Russia, and Mexico that provided
individuals within each sovereign the ability to have a
less expensive price than the price that was charged for
exported fuel.
Senator Thomas appreciated the bill. He referred to other
discussions that had centered on similar concepts related
to other heating sources. He discussed that the Interior,
Southwest, and Northwestern areas of the state experienced
oil prices of $4.00 to $10.00 per gallon. There was no
telling what the impact would be if oil reached $150 per
barrel in the next few years. He stressed that major
concerns focused on the PM2.5 air pollutant issue combined
with the high fuel cost that drove up the price of
everything including wood. He expounded that residents who
had transferred to other heating methods had created a
large issue that could impact federal transportation funds
and had forced some schools to limit students from going
outdoors. He explained a previous attempt at pacifying the
entire state had resulted in a $1,200 addition to the
Permanent Fund due to the inability to agree on how the
formula would have worked with the various types of fuel.
10:30:48 AM
LUKE HOPKINS, FAIRBANKS NORTH STAR BOROUGH, MAYOR (via
teleconference), spoke in support of SB 99. He explained
that the community had been looking at how it could lower
energy costs. Individuals and businesses in Fairbanks had
switched to wood heat in response to high oil prices in
2008. As a result there were many health issues in the
community that had a 250 square mile non-attainment area.
He relayed that thousands of structures in the community
were heated with the most expensive natural gas. He
stressed that the bill would provide relief from the cost
of energy for most of his community. He explained that
approximately three percent of the Fairbanks households had
been able to reduce their energy consumption by almost 30
percent as a result of the home energy retrofit program. He
had heard from residents that were spending $800 a month on
fuel. He stressed that relief from the cost of heating fuel
was imperative and urged the committee to consider ways to
help residents with the rising costs of energy immediately.
10:34:31 AM
PAUL D. KENDALL, SELF (via teleconference), pointed out
that Alaska faced problems with energy costs and that some
of the remedies did not make sense. He urged committee
members to visit the Anchorage/Mat-Su area to host a
conversation on how to help reconstruct energy for Alaskan
homes. He believed that Alaska could act as an example for
the rest of the world.
10:37:27 AM
Senator Olson wondered what plans were in place for the
interim to ensure that the bill would be polished and ready
to bring to the Senate Floor the following year.
Senator Paskvan responded that he would continue to speak
with other senators, would look for models to help design
the program, and would look at the BTU equivalency around
regions throughout the state. He reiterated that the goal
was to find a solution that was right for Alaska.
Co-Chair Stedman communicated that the U.S. Forest Service
Sitka Wood Utilization Center would be a good resource and
had done a significant amount of work on BTU equivalency
and price comparisons on alternative fuels.
10:38:49 AM
AT EASE
10:39:17 AM
RECONVENED
SB 99 was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 155(L&C)
"An Act relating to the applicability of prevailing
wage rates to public construction contracts; and, with
regard to public construction contracts, relating to
notifications, bonding notifications, filings,
notices, primary contractors, final payments,
penalties, advertised specifications, required
contract provisions, terminations, lists of violating
contractors, and remedies."
10:39:52 AM
REPRESENTATIVE KURT OLSEN, SPONSOR, introduced HB 155 that
updated an antiquated statute that had been implemented in
1935. He explained that the current trigger point on
"Little Davis Bacon" jobs was $2000.
Co-Chair Stedman asked Representative Olsen to explain the
term Davis Bacon.
Representative Olsen explained that Little Davis Bacon
covered state jobs and required certified payroll
prevailing wages to be paid on public jobs in
municipalities, boroughs, and school districts that were in
excess of $2000 in the State of Alaska. He expounded that
the $2000 had been set by the federal government in 1935
and had not been changed. In 1935 the prevailing wage had
been approximately $0.50 per hour; however, some of the
artisan rates were up to $1.35 or $1.40 an hour. The
legislation would take the limit up to $25,000 as a result
of collaborations between the Alaska Municipal League and
two state-wide unions. The $25,000 limit was close to the
number that inflation would have adjusted it for. The
number would be large enough to provide a meaningful and
valuable number to the municipalities, but would still be
small enough to prevent outside firms from bidding on
smaller jobs. He relayed that no opposition had been
expressed regarding the proposed limit change. He thanked
Barbara Huff, President of the Local 959 Alaska Teamsters;
Don Etheridge AFL-CIO; and Kathy Wasserman, Executive
Director of the Alaska Municipal League for their work on
the bill. He thanked his staff and others.
10:43:33 AM
Co-Chair Stedman explained that the intent was to report
the bill out of committee at subsequent meeting. He noted
that there was a zero fiscal note from the Department of
Labor and Workforce Development.
CSHB 155(L&C) was HEARD and HELD in committee for further
consideration.
[Note: CSHB 155(L&C) was heard again during the meeting and
appears later in the minutes]
CS FOR HOUSE BILL NO. 183(FIN) am
"An Act relating to the Village Safe Water Act; and
providing for an effective date."
10:45:31 AM
REPRESENTATIVE ALAN DICK, SPONSOR, discussed that for many
years the Village Safe Water Act had done tremendous good
throughout the state; however, four years earlier the city
of Nenana had applied for and received a Village Safe Water
grant for a water treatment plant, but they were informed
later by the Department of Environmental Conservation (DEC)
that they did not qualify. He believed that HB 183
strengthened the Act because it addressed needs across the
state. He relayed that the bill had no fiscal note. He
explained that the bill added new communities to the
eligibility list. The new communities would not take
precedence over others and would be evaluated according to
existing priorities. He discussed that HB 183 was a
companion bill to SB 96. The bill raised the maximum number
of residents that were eligible for funding in a village or
first class city from 600 to 1000, which allowed eight
municipalities that faced clean water and sanitation issues
to receive a grant. The bill added home rule municipalities
that had a population of less than 1000 residents and
included the City of Nenana and the City and Borough of
Yakutat. The bill also included communities that were
represented by a council that were organized under the
Indian Reorganization Act or a Village Tribal Council. The
bill also allowed an incorporated non-profit to act as a
governing body that would provide ongoing maintenance. He
emphasized that HB 183 would allow villages to get the help
they needed and would ensure that there was a responsible
entity to guarantee that the money would be spent how it
was intended. He relayed that Nenana was waiting to do the
construction on its treatment facility and that its system
was currently so needy that the maintenance man was
required to check the plant every four hours during the
night.
10:49:06 AM
Co-Chair Stedman requested a list of the communities that
would be eligible under the legislation.
Representative Dick responded that the eight villages that
would be included were Akiachak, Kipnuk, Yakutat, Klawock,
Hoonah, Ninilchik, King Cove, and Sand Point.
Co-Chair Stedman relayed that there was a zero fiscal note
from DEC.
Senator Olson asked how communities with populations less
than 600 had responded to the proposed legislation. He
wondered what the response had been from second class
cities that needed water and sewer facilities but were not
able to tax residents to pay for them. He understood that
there would only be a set amount of funding available.
SHEILA PETERSON, STAFF, REPRESENTATIVE DICK, replied that
there had been no response from any communities. She
explained that Bill Griffith the project manager at DEC had
informed the sponsor that the process would not change and
that the communities with the greatest needs would be at
the top of the priority list and would be funded. The
addition of ten more communities would not have much of a
negative effect on any communities.
10:51:58 AM
Senator Olson expressed concern about smaller communities
that were vying for the same funding and did not have the
ability to send a spokesperson down to testify. He
discussed that water and sewer were needed in all
communities and were very important from a medical
standpoint in order to combat health problems such as
otitis media and hepatitis. He was concerned that a
decrease in federal and state funding would increase the
competition for some of the contracts.
Representative Dick expressed his confidence that most of
the great needs had been met given that the Act had been in
place for a very long time and that allowing the additional
communities under the Act would not threaten the smaller
villages.
CSHB 183(FIN) am was HEARD and HELD in committee for
further consideration.
[Note: CSHB 183(FIN) am was heard again during the meeting
and appears later in the minutes]
10:54:15 AM
AT EASE
11:03:09 AM
RECONVENED
CS FOR HOUSE BILL NO. 106(FIN)
"An Act extending the termination date of the Alaska
coastal management program and relating to the
extension; relating to the review of activities and
regulations of the Alaska coastal management program;
establishing the Alaska Coastal Policy Board; relating
to the development, review, and approval of district
coastal management plans; relating to the duties of
the Department of Natural Resources relating to the
Alaska coastal management program; relating to the
review of certain consistency determinations;
providing for an effective date by amending the
effective date of secs. 1 - 13 and 18, ch. 31, SLA
2005; and providing for an effective date."
11:03:29 AM
Co-Chair Stedman discussed the importance and sensitivity
of the Alaska Coastal Management Program.
JOHN BURNS, ATTORNEY GENERAL, DEPARTMENT OF LAW, introduced
himself.
LARRY HARTIG, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, introduced himself.
11:06:51 AM
Attorney General Burns explained that CSHB 106(FIN)
reflected a structured balance that addressed the interests
of coastal communities and industry and ensured economic
opportunities for Alaskans. The bill structure had been
developed by the House Resources Committee, but reflected
changes based on concerns that had been expressed in the
House Resources Committee the prior week. He discussed that
the bill provided objective standards, a predictable
process, and a strong state coastal program that encouraged
local input and involvement but did not include local veto
authority over projects. The legislation allowed coastal
districts to provide meaningful input into the regulatory
process and the opportunity to pursue and create policies
that would help assure that development was compatible with
local concerns. He stressed that it was important for
policies to meet specific criteria that ensured
predictability and stability to the industry and protection
of the state's interests as a whole. He discussed that the
bill facilitated and encouraged dialogue between coastal
districts, industry, and state agencies regarding the
composition of the Coastal Policy Board and required a two-
thirds vote for all board recommendations. He emphasized
that dialogue built understanding and that understanding
helped to promote agreement. He relayed that historically
the program had been infused with difficulties and mistrust
and that the current bill represented a balance and had
been built on the input of all concerned parties. Letters
of support had been received from North Slope Borough Mayor
Itta and industry representatives (copies on file). He
communicated that the House had unanimously passed the bill
and that Governor Parnell supported the current bill. He
and Commissioner Hartig were present to provide an overview
of the legislation and Department of Natural Resources
Commissioner Sullivan and staff were available for
questions.
11:10:19 AM
Co-Chair Stedman requested explanation of the bill.
Attorney General Burns explained that there had been many
discussions that had revolved around the importance of
meaningful input. He directed attention to Section 3, Page
2, Line 16 that created the nine member Alaska Coastal
Policy Board. The board consisted of five public members
appointed by the governor that included one at-large member
that was from a Native regional corporation, a mining
organization, an oil and gas organization or any other
resource development or extraction industry. Four members
were appointed from list of at least three names from
various geographic regions and the governor had the ability
to reject the lists if desired. He expounded that the board
would be modeled after the forestry management program and
was intended to build consensus and not divisiveness. The
remaining four members were the commissioners of the
Departments of Environmental Conservation (DEC), Fish and
Game (DFG), and Transportation and Public Facilities (DOT);
and the deputy commissioner of the Department of Natural
Resources (DNR). The commissioner of DNR had not been
included because it was the commissioner's responsibility
to provide administrative review of the board's
recommendation. Page 3, Line 28 included the terms of the
board and provided that the public member could be removed
at the pleasure of the governor. Page 4, Lines 13 and 14
reflected that recommendations would be based on an
affirmative vote of at least two-thirds of the full
membership in order to avoid "gamesmanship" and to
encourage consensus building. Page 4, Line 25 outlined that
the function of the board included making recommendations
to the department that related to the approval or
modification of district plans; providing a forum for
discussion related to "this chapter" [AS 46.40], and the
state's coastal resources; and to annually solicit
information from state and federal agencies to determine
whether the agencies had implemented regulations, in order
to allow for cleanup of inconsistencies between
regulations.
11:14:49 AM
Attorney General Burns directed attention to Section 6,
Page 5 that related to the duties of DNR. Page 6 explained
that the obligation of the department was to facilitate the
transmittal of information electronically in order to
reduce costs, and to provide information to any other
person in writing designated by the district. Line 17
allowed further continuity by summarizing the minutes of
the board's discussion of issues related to this chapter
[AS 46.40] and coastal uses and resources of the state. He
explained that the purpose was to provide a historical
background. Page 6, Line 26 stated that the plan must meet
the district plan criteria and could not be inconsistent
with criteria adopted in AS 46.40.040.
11:18:15 AM
Attorney General Burns detailed that the plan was required
to meet specific items. Page 7, Items 1 through 3 were
essentially the same as current law with the exception of
Page 7, Line 2 that clarified the policies were
enforceable. Language on Page 7, Line 8 had not been
included in the previous version of the bill and required
the plan to designate any areas that merited special
attention and a designation of enforceable policies that
would be applicable in the areas. He detailed that the bill
worked to provide predictability and stability; therefore,
it was necessary to determine enforceable policies that
applied to areas in need of special attention in order to
provide a clear understanding of the criteria required. He
quoted from Page 7, Line (b) that showed the plan should
meet the implementation requirements in AS 46.40.070 and
ensure that the enforceable policies were "clear and
concise regarding the activities and people affected by the
policies; use prescriptive or performance-based standards
that are written in precise and enforceable language;
address a coastal use or resource of concern to the
residents of the coastal resource district as demonstrated
by local knowledge or supported by scientific evidence; and
employ the least restrictive means to achieve the objective
of the enforceable policy." He emphasized that the criteria
focused on assuring balance. Section 8, Page 7, Line 28
listed the criteria that included determining a list of
alternative methods of achieving policy, local knowledge or
scientific evidence that supported each alternative method,
how the alternative methods may impact other existing or
potential uses, the economic effects, the technological
feasibility, and any other relevant factors of the
alternative methods.
Attorney General Burns continued on Page 8, Line 9,
Subsection (b) and explained that it was important for DEC
to retain jurisdiction over anything related to an item in
the province of its authority. Section 11, Page 8, Line 27,
provided for the opportunity for input and a hearing by the
board: "If, upon submission of a district [coastal
management] plan for approval, the department finds that
the plan meets the provisions of this chapter…, the
department may approve the district coastal management
plan, or may approve portions of the [district] plan…"
Section 12 provided the right of a heightened review on
Page 9, Line 4: "If the department finds that a district
coastal management plan is not approvable or is approvable
only in part under (a) of this section, the department
shall explain in writing the basis for its decision." He
explained that the coastal resource district that submitted
the plan could ask the department to submit the plan or
portions of the plan that were denied to the board for
recommendations. He reminded the committee of the board's
composition and explained that the process was meaningful.
11:23:27 AM
Attorney General Burns discussed Section 13 (c), Page 9,
Line 19. He read from the bill: "after the board has
reviewed the district coastal management plan and submitted
recommendations under (b) of this section, the department
shall enter findings and, by order, may…" He explained that
to the extent that the board recommended, the department
could approve the plan or portions of the plan or do a
variety of other things that were consistent with the
existing law. He discussed that Page 10, Line 1 provided an
opportunity for a third review and quoted, "Only a coastal
resource district affected by a decision of the department
under this section may request reconsideration of the
decision." The reconsideration was required to be complete
within 15 days in writing. The purpose was for coastal
districts to share their opinion. He stressed that the
reconsideration model was based on standards in the
judicial process. The DNR commissioner would review the
decision and had 20 days to make a determination. He
stressed that the 20-day time frame was in place to ensure
movement of decisions. Without a determination by the
commissioner, the department's determination was made
final.
11:26:13 AM
Attorney General Burns discussed that Page 10, Line 13
provided the superior court with jurisdiction over cases
that had not been settled. He expressed that Page 10, Line
16, AS 46.40.070 represented the heart of the bill as it
related to implementation. He quoted the requirements:
The department shall approve a district coastal
management plan submitted for review if, as determined
by the department, the (1) district coastal management
plan meets the requirements of this chapter and the
district plan criteria adopted by the department; and
(2) enforceable policies of the district coastal
management plan (A) do not duplicate, restate,
incorporate by reference, rephrase, or adopt state of
federal statute [or regulations]; (B) are not
preempted by or in conflict with state or federal
statutes [or regulations], (C) employ the least
restrictive means to achieve the objective of the
enforceable policies; (D) do not arbitrarily or
unreasonable restrict uses of state concern; (E) meet
the requirements of (b) and (c) of this section.
Attorney General Burns noted that "uses of state concern"
were defined by AS 46.40.210 related to oil and gas
development on federal and state land, transportation
issues, etc. He directed attention to Page 10, Line 31 (b):
The enforceable policies in a district coastal
management plan submitted for review under this
section must meet the requirements of (a) of this
section and may establish new standards or
requirements that are within the authority of a state
or federal agency unless (1) a state agency
specifically objects to the proposed new standards or
requirements on the grounds that the proposed
standards or requirements (A) are based on scientific
evidence or local knowledge relied upon by the coastal
resource district to satisfy the requirements [of AS
46.40.030] but that conflicts with the agency's
interpretation of the scientific evidence within the
agency's area of expertise.
Attorney General Burns explained that his department had
been dealing with the subject in a myriad of ways and did
not want there to be a situation that resulted in competing
science. He opined that an agency's interpretation of
science was in its expertise and should be given deference.
He discussed that the definition of scientific evidence was
found in the chapter and a peer review was required in
order to establish "sound science." He reiterated that the
purpose of the bill was to create a checks and balances
process.
11:30:36 AM
Attorney General Burns read from Page 11, Line 10 and
relayed that policies could not "(B) conflict with the
agency's allocation of existing or planned agency's
resources to meet state policies and objectives; or (C)
conflict with agency priorities or objectives, or other
state policies." He was happy to answer any questions the
committee may have on the items. He expressed that on the
subject of an agency's allocation of existing resources
that coastal district's did not have enforcement authority.
The department did not want a coastal district with an
approved plan to govern how an agency used its resources.
He recited from Page 11, Line 14 that coastal districts
could not submit a plan that "proposed new standards or
requirements address discharges, emissions, contaminants,
conditions, risks, or other matters that fall within the
authority of the Department of Environmental Conservation…"
He relayed that the bill included language that required
the board to review DEC standards to make recommendations
or a report to the legislature. He explained that DEC
needed to look at the state as a homogenized system and did
not want to tweak policies in different areas of the state
because there was a "fine balance" between DEC and the
Environmental Protection Agency (EPA) related to
enforcement provisions.
Attorney General Burns relayed that the provision on Page
11, Line 18 had been large concern of the state and
industry: "An approval of coastal management plan with
enforceable policies may not affect a person's rights or
authorizations under an unexpired permit, lease, or other
valid existing right to explore or develop natural
resources that predates the date that the enforceable
policy becomes final." He explained that it was a "limited
grandfather provision" that allowed current standards to
continue to apply to an existing permit; however, it did
not provide an open-ended grandfather provision. A renewal
of a lease that expired in five years would be subject to
whatever the current standards were at that time. He
relayed that Page 11, Line 24 defined the term
"specifically objects" to ensure that an agency was not
given "carte blanche" authority to arbitrarily object. The
commissioner, commissioner's designee, or the state
attorney general was provided with the ability to object.
11:34:39 AM
Attorney General Burns quoted from Page 11, Line 31:
"Notwithstanding any other provision of this chapter, an
enforceable policy that establishes requirements within the
authority of a state or federal agency shall be superseded
upon the enactment of a law or adoption of a regulation
that is inconsistent with the enforceable policy." He
reminded the committee that the goal was to achieve the
ability to ensure that coastal districts had the
opportunity to see enforceable policies through. The focus
was on the "gap" provision and a state agency that had
authority to regulate a particular area may not have been
currently regulating the area for a variety of reasons
including, lack of necessity, lack of resources, etc. The
provision allowed coastal districts to make recommendations
that could become enforceable if the state agency deemed
that the recommendation made sense. He stressed that the
state should not have a provision that required it to
consent to something that it was stuck to indefinitely in
the future because it would encourage state agencies to
zealously guard their authority. He reiterated earlier
comments about the holistic perspectives of state agencies.
The provision assured that once a state or federal agency
had an authority to regulate and enacted a regulation that
the regulation became effective immediately.
11:37:16 AM
Attorney General Burns discussed that Section 16, Page 12,
Line 4 related to a consistency review. Projects were
required to go through a consistency review to ensure that
it complied with all criteria. Page 12, Line 5 included
language about comparing a consistency review and
determination of a proposed project that the "reviewing
entity" (typically a department) could request consistency
review comments for a proposed project from state resource
agencies, affected coastal districts, or other interested
parties as determined by department regulation. He quoted
from Page 12, Line 11 that an elevated review: "shall be
conducted by the commissioners or deputy commissioners of
the resource agencies." There would be a high level, multi-
party review that could only be requested by the project
applicant, the state resource agency, or an affected
coastal resource district in order to narrow the
constraints regarding participating parties. He contended
that it would be undesirable to have third parties to be
extraneously impacting the decision making process. He read
from Page 12, Line 22 that an elevated review "shall be
completed with the issuance of a written order signed by at
least two of the commissioners or deputy commissioners of
the resource agencies within 60 days after the initial
request of an elevated review." He emphasized that time was
important but it was also important to make certain there
was sufficient time for the commissioners to conduct a
meaningful review. In the event that no written
determination was made, the decision of department would
become final. There was an existing provision in statute
regarding the appeal process.
11:40:49 AM
Attorney General Burns discussed that Page 13, Line 15
included the definition of the reviewing entity that was
typically DNR for a consistency review. Line 18 clarified
that the commissioners or their deputies were responsible
for elevated reviews. He quoted Page 14, Line 10:
"local knowledge" means a body of knowledge or
information about the coastal environment or the human
use of that environment, including information passed
down through generations, if that information is (A)
derived from experience and observations; and (B)
generally accepted by the local community.
Attorney General Burns explained that it was also necessary
that local knowledge was not contradicted by credible
scientific evidence. He communicated that the bill would
sunset in 2017 in order to provide time to draft
regulations. He felt that a good agreement represented a
balance and was an agreement in which no individual party
was fully satisfied. He referred to letters of support that
had been provided in the packet (copy on file). He would
have liked to see some different items in the bill, but he
was satisfied with the result.
11:44:57 AM
Commissioner Hartig stressed that the objective of the bill
was to achieve a compromise. He had sought to bring his
work experience and to come up with a workable solution. He
understood that everyone was committed to doing the right
thing for Alaskans and he appreciated all of the hard work
that went into the construction of the bill.
DANIEL S. SULLIVAN, COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, discussed that when the governor had introduced
the bill in January it had represented a straight extension
of the program. The administration had committed to
constructively engage in the process with all stakeholders
in a good faith negotiation on substantive changes that
others might have had, and to change the bill's tone. He
believed that the administration had followed through on
its commitment. He relayed that there had been hundreds of
hours of negotiations. He acknowledged Representative Bob
Herron, Representative Reggie Joule, and DNR Deputy
Commissioner Joe Balash for their hard work. The department
had sought to change the tone, build trust, and reach a
compromise and balance. He stressed the importance of the
role that balance played given that there were several
dozen stakeholders involved. He believed the compromise had
been reflected when the House had unanimously passed the
bill. He recognized the committee's responsibility to dive
deep into the bill, but believed it was important to
underscore the context of the process that had occurred
throughout the legislative session. He had worked to keep
some of the members on the committee informed at a high
level regarding the process on the House side.
11:48:28 AM
Co-Chair Stedman referred to an earlier comment that the
bill was a finely tuned balance like the point of a pin. He
stressed that the committee would strive to ensure that the
bill stood on even ground.
Co-Chair Stedman he wondered whether it was normal
procedure for the governor to have the ability to remove
appointed board members without cause. He read from the
bill that "the public member may be removed at the pleasure
of the governor" (Page 3, Line 30). He asked whether the
authority was too broad in the event that issues of dispute
arose.
Commissioner Hartig responded that it was important to
recognize that someone had to make the appointments. He
explained that the intent was to provide the ability to get
a fair and balanced perspective from the board in the
formal review process. He thought that each governor would
work to obtain an actively participating board that would
attend meetings. Alternate members would be ready to take a
departing member's place. He stressed that the board needed
to be functional, rather than fighting for a specific point
of view. The idea was for one person to be able to make the
selections, to look for people who were willing to
participate, listen to others, and work through difficult
issues. He explained that the purpose was not to stack a
board. He added that the language had been designed based
on discussions with others.
11:51:52 AM
Commissioner Sullivan underscored that the Board of
Forestry model was highly regarded by many people
throughout the state and the legislature. He detailed that
it was a board that worked well and had a significant
amount of influence. He believed that its recommendations
were often followed by the executive and legislative
branches of government.
11:52:44 AM
Co-Chair Stedman pointed out that there could be a governor
who might take advantage of the ability to remove board
members without cause. Attorney General Burns responded
that he was correct; however, the governor was only allowed
to replace a member with a person on a list that had been
provided. The governor did not have the ability to replace
and appoint whomever he or she wanted. He stressed that the
nominees were provided by the coastal districts. He
emphasized that there was typically a confirmation process
when "for-cause" situations existed. He explained that the
emphasis was on a working and functional board that did not
have gamesmanship or people with ulterior agendas.
Co-Chair Stedman relayed that a few years back the
permanent fund board had taken a political turn as a result
of influence by the governor. He added that the concern was
not with the current governor, but that governors came and
went. He expressed that it was a sensitive issue.
11:55:41 AM
Co-Chair Hoffman wondered why there was such strong
language regarding the governor's involvement with the
board and asked what the logic had been regarding the
inclusion of the governor's ability to reject a list of
names that had already been vetted by the regions (Page 3,
Lines 2-3). He relayed that the bill did not specify
whether the governor could reject the second list; however,
it seemed that he would not be able to. He did not believe
there was much give and take when the regions had a list of
people that they wanted and the governor was still provided
the process of selecting a person from a list of names with
the option of rejecting the list. He thought that Line 30
had the potential to intimidate board members and could
cause them to be torn between pleasing their districts or
the governor.
Attorney General Burns understood the concerns and relayed
that there had been significant discussion on the issue.
There were constraints placed on the governor's ability to
appoint members from the lists that were submitted by the
coastal districts. He expressed that Senator Hoffman was
correct that there were multiple lists allowable (Page 3,
Line 3) and there was the possibility that there could be
many lists. He stressed that the goal was a consensus
building board and that it was the coastal district that
submitted the names. He reminded members that the board had
been modeled after the Board of Forestry that appeared to
work very well.
Co-Chair Hoffman did not believe there had been sufficient
discussion on the matter.
11:59:29 AM
Co-Chair Stedman wondered why a two-thirds vote was
required instead of a simple majority (Page 4, Lines 13-
14). He relayed that it was not easy to obtain a two-thirds
vote on contentious issues. Attorney General Burns
responded that the premise of the board was to make
meaningful recommendations that could become policy. He
stressed that it was important to have a clear agreement on
policy. The intent was to build consensus and not factions.
He added that representatives from the North Slope that had
worked on the issue felt that the language was a
significant improvement over a simple majority.
Co-Chair Stedman was concerned that individual districts
would not have the financial resources or expertise to
study economic effects of alternative methods (Page 8,
Lines 5-6). There were a lot of differences between the
size and scope of coastal communities and smaller
communities did not have the breadth and depth of resources
that were available to larger communities. He expressed
concern about the fairness of the issue.
Commissioner Hartig replied that there had been substantial
discussion related to the issue. The department had
primarily met with attorneys for the North Slope Borough
throughout the past week who had worked to relay the views
of other districts on the issue. The department had brought
up the point that the North Slope had certain capabilities
that other districts did not necessarily share. In a
conversation with DNR the departments had determined that
the provisions needed to be precise, but they did not want
to express them in terms of barriers. The departments had
decided that DNR would work with individual districts
through regulations and budgets to ensure that the
provisions did not become a barrier and that DNR would help
them with department assistance when needed. He explained
that a different level of proof may exist depending on the
circumstance, such as minor conflicting use versus
something that might have precluded oil and gas development
that could be significant to the state.
12:05:04 PM
Co-Chair Stedman wondered why there was not tighter
language on Page 9, Lines 1 and 22 that included the term
"may" in the permissive language for the departments.
Attorney General Burns replied that the intent was to
create flexibility in the process. He explained that it was
not possible to think through every iteration and the
language provided the agencies with flexibility; however,
the agencies could not act arbitrarily or capriciously. He
discussed that once all of the factors had been considered
throughout the process the opportunity to say "no" was
narrowly restricted and the word "shall" was used at the
point of the implementation process.
Co-Chair Hoffman thought that Attorney General Burns was
suggesting that it was necessary to change language that
related to the approval of the plan or portions of the plan
to "shall" instead of "may." He thought there was a typo in
the bill on Page 9, Line 22. Attorney General Burns asked
him to clarify the question.
12:08:05 PM
Co-Chair Hoffman pointed to Page 9, Line 22 that thought
the language should have read "shall approve" instead of
"may approve." Attorney General Burns explained that Page
9, Line 22 read "shall enter findings by order and may do"
these things.
Co-Chair Hoffman replied that Attorney General Burns had
said at the end of the process "shall" should be used for
approval but that the bill read "may approve." He
reiterated that he thought there was a mistake in the bill.
Attorney General Burns responded that they were talking
about two different processes. The language in question was
related to board recommendation following its review. Once
the board made the recommendation the department was
required to take action, either by approving the plan or
portions of the plan. He explained that Line 29 required
any other action to be taken by the coastal resource
district and reflected the iterative review process. He
stressed that it became very difficult to state other
action "shall" be taken. He expounded that it was important
to allow flexibility and to provide the department with a
choice. He pointed to Page 10, Line 17 that discussed the
requirements of the department relative to the district
coastal management plan. Implementation was addressed in AS
46.40.070 and the requirements of the department were very
tightly constrained. He explained that the coastal
districts wanted the ability to provide a voice and the
opportunity to implement policies; therefore, when the
criteria were met it became appropriate to restrict the
department's ability.
12:11:26 PM
Co-Chair Stedman cited the concern that the language was
too broad in Line 29 that related to other action to be
taken.
Co-Chair Hoffman wondered what the thought process had been
regarding the reason for the broad language in Lines 29 and
30. He believed that the requirements for the board should
be specific and not arbitrary or undefined.
Attorney General Burns clarified that Section 13, Page 9
related to department action to be taken subsequent to the
board review. He referred to Line 19 that read "after the
board has reviewed the district coastal management plan and
submitted recommendations, the department shall enter
findings." Line 29 required that "any other action be taken
by the coastal resource district." He explained that during
the board review process, it was possible that the board
could make recommendations that the department had not
considered; therefore, the department would be allowed to
ask for supplemental information from the coastal
districts. He reiterated that agencies could not take
arbitrary or capricious action and that the opportunity for
judicial review was provided.
Co-Chair Hoffman felt the answer was insufficient.
12:14:50 PM
Senator McGuire wondered why it was necessary to remove
language in the current statute that required mediation
after difference of opinion and additional steps if
differences were not resolved (Section 13, Page 9). She
believed the administration had alluded that some type of
mediation would occur between the board and the agency. She
opined that the removal of the existing statutory language
could be detrimental to the process and a potential escape
away from continued dialogue between parties.
Attorney General Burns replied that members of coastal
districts had expressed dissatisfaction with the current
mediation process. He explained that the new language
forced review by the commissioners and was not vague about
who the mediators would be. He believed that the review was
much more meaningful as the decisions would be made by
those who were impacted.
Commissioner Hartig echoed that coastal districts felt that
the current mediation process might not lead anywhere.
Districts had vocalized that they wanted to see the
reinstatement of a review board as it had worked in the
past. The idea of the review board was to allow a back and
forth conversation without mediation. He explained that the
review board would be able to make its recommendations to
the department and based on the recommendations the
department would be able to approve the plan or to ask for
continued work in other areas prior to approval.
12:18:49 PM
Senator Thomas provided a scenario in which a small
resource developer along the coast was positively affected
by a district coastal management plan submitted to the
department. He wondered whether (E) on Page 10 related to
the intricacies of the process that would occur in the
event that the department made modifications to the plan
and then submitted the plan to the review board. He
surmised that the department would provide a final
administrative order. He wondered what recourse the
developer would have in the event that the department's
modifications negatively impacted the developer's project.
He asked if the developer's choice would be to go to court.
Attorney General Burns answered in the affirmative. He
emphasized that the department would be required to explain
the basis of its decision in writing. The next step would
be a board review, and the final step would be the judicial
process. However, the purpose of the review board was to
help create the opportunity for dialogue. The goal was to
move towards communication and away from litigation.
12:21:31 PM
Senator McGuire discussed that the word "shall" was
included in the department review and approval requirements
(Section 15, Page 10) and following the words "federal
agency" the word "unless" was used (Page 11, Line 3). She
believed it was a two part process because even when the
tenets were met in the first section it was still possible
to run into problems later. She was concerned about
"unless" language that read "agency priorities or
objectives or other state policies" (Lines 12 and 13,
Subsection C). She understood that the goal was to move
forward with consistency and compromise; however, she
believed that the language was overly broad and vague. She
wondered how the proposed language had been arrived upon
and how a person meeting the test would know what an agency
priority, objective, or policy was.
Attorney General Burns deferred the question to
Commissioner Hartig.
Commissioner Hartig replied that it was necessary to take a
look at the coastal districts and agencies involved and
where they drove their authorities, duties, and
responsibilities. He explained that the agency authorities
including objectives and priorities came from the
legislature and the constitution. The concern was that a
coastal district authority could overlap with a state's
duty and that the state might not object because of various
reasons including, more pressing state priorities, lack of
resources, etc. If the coastal district could show that a
need would be filled and was supported by local knowledge
or scientific evidence and that the least restrictive means
were being used then state agencies would allow them to
fill the need. However, districts did not have enforcement
authority and did not issue or enforce permits. In the
future when someone applied for a state permit and there
were enforceable policies on the books it was necessary for
the department to look at the district plans to make sure
that the proposed product was consistent with the district
plan in order to ensure consistency provisions or
restrictions were included in permits and needed to be
enforced. The concern was about how the coastal district
plan would impact the agency's other priorities from the
legislature and whether both could be achieved. The
language provided the agency with the discretion to decide
whether the district plan was important enough for the
agency to give up some of its resources or other priorities
that it hoped to achieve. He elaborated that the provision
was included to deter conflict between coastal districts
and the state agencies that had priorities set by the
legislature, statutes, and budget. He added that it was not
possible to predict all of the situations that may arise;
therefore, the legislative legal drafters recommended that
the language needed to be broad. He communicated that the
provision was not intended to act as a barrier but to make
things work between agencies and the districts.
12:28:06 PM
AT EASE
12:36:26 PM
RECONVENED
12:36:36 PM
Co-Chair Stedman wondered whether the language "shall be
completed with the issuance of a written order signed by at
least two of the commissioners of the resource agencies or
their deputies" required a signature or interaction by the
commissioner of the Department of Fish and Game (Page 12,
Lines 22 and 23). Commissioner Hartig replied that there
were three resource commissioners that included DFG, DEC,
and DNR. He explained that a majority vote would be
required for approval by two out of the three
commissioners.
Co-Chair Stedman asked whether two commissioners could
override the DFG commissioner. Commissioner Hartig answered
in the affirmative, but deferred to Attorney General Burns.
Attorney General Burns responded in the affirmative. He
elaborated that it would be the issuance of a decision on
an elevated review. The next step included that the
department would issue a final determination. He remarked
that there would be the possibility of disagreement, which
would be helpful in providing a candid dialogue.
Co-Chair Hoffman opined that the issue needed
clarification. He emphasized that the issue of subsistence
impacted far too much of the state for the commissioner of
DFG to be excluded. He stressed that one of the
commissioners had to be from the Department of Fish and
Game.
12:39:34 PM
Co-Chair Stedman expressed concern about the statement "not
contradicted by scientific evidence" following language
that read "derived from experience and observations; and
generally accepted by the local community," and "local
knowledge," (Page 14, beginning on Line 15). He told a
personal story from his childhood about a National
Geographic show on the ocean. The show had stated that
nothing existed in the ocean below 200 fathoms and his
grandfather had disputed the statement because he had
fished black cod at a depth of 300 fathoms.
Attorney General Burns followed up on Co-Chair Hoffman's
earlier question related to the involvement of the DFG
commissioner on subsistence decisions. He believed it would
be highly unusual for the other commissioners to not
provide deference to the Fish and Game commissioner on
something that fell within the expertise of DFG. He
emphasized that the bill worked to restore a level of
trust.
Co-Chair Hoffman responded that Alaska's unique
circumstances that did not exist in the Lower 48 should be
acknowledged. He disagreed with the department if it did
not think it was necessary to acknowledge the state's heavy
dependence on subsistence. Attorney General Burns replied
that he had lived throughout Alaska for 51 out of his 52
years and was intimately aware of the concerns and
appreciated the comment by the co-chair.
12:43:57 PM
Attorney General Burns addressed Co-Chair Stedman's concern
regarding scientific evidence. He discussed that it was
possible that scientific evidence did not cover everything;
however, the definition of scientific evidence talked about
the structure of what qualified. He deferred to any
additional remarks from Commissioners Hartig and Sullivan.
Co-Chair Stedman remarked that a current example of
scientific evidence not matching local experience was
related to ice in the Arctic. Commissioner Sullivan
stressed that scientific evidence would have to fit within
the tight definition laid out on Lines 17-30 and that an
agency official would not immediately be given deference
without consultation of the definition.
Co-Chair Stedman wondered why the bill structured the
report the way it had and whether there was a need to
repeal a "carve-out" dated July 1, 2013 to induce a
reasoned report (Page 16).
Commissioner Hartig replied that the purpose of the review
board was to take an objective view on questions raised by
interested parties. He explained that DEC had a public
process that allowed people to recommend changes to
standards on a broad or district level. He explained that
out of fairness and respect to Representative Joule and
others the departments felt there should be a provision
that allowed the review board to serve its function of
reviewing regulations and to look at the DEC carve-out.
The bill referred not only to the carve-out, but to
regulations and applicable state and federal statutes and
regulations. He discussed that DEC was very constrained by
federal law and processes regarding air and water standards
or cleanup spill prevention and response. He expounded that
if a district desired to set a water quality standard the
department believed that setting it should be as rigorous
in substance and in process. He believed a review committee
would be able to get into details about what was involved
in applying, monitoring, enforcing, and setting standards.
12:48:41 PM
Co-Chair Hoffman thought the language was needed, but felt
that it would be better to include a sunset provision that
would occur in two years when the report was submitted. He
explained that the language could be reinstated if it was
still needed, but if change was necessary that true
dialogue could happen at that time.
Co-Chair Stedman discussed the three fiscal notes. The
first was from DNR for $664,100 in general funds to cover
the costs of the Alaska Coastal Policy Board. There were
two fiscal notes from DEC: one for $10,000 in interagency
receipts and $5,000 in general funds to cover the
commissioner's travel and costs associated with reporting
requirements; and one for the water quality program for
$20,000 in general funds to cover travel and staff costs to
attend board meetings. He added that the top fiscal note in
the member packets picked up the costs of the program
moving forward.
Senator Olson wondered whether Page 7, Line 8 addressed the
designated areas. He understood the importance of balance
and discussion. He relayed that his areas of interest
included the implementation of a coastal policy body,
designated areas, and the DEC carve-out. He thanked the
testifiers for their time and effort on a subject that had
affected the people in his district.
Attorney General Burns replied Page 7, Line 8 reflected
that an area of special attention would be designated and
the enforceable policies that were applicable in the areas.
There had been a provision in the House Resources version
of the bill related to the state's ability to require a
designation. He explained that Representative Joule had
asked a question during a House Finance meeting in regards
to assurance that DNR would deal with designations. He had
provided a letter dated April 17, 2011 to the co-chairs and
Representative Bob Herron that met the assurance (copy on
file). He was happy to provide a copy of the letter to
members.
12:53:09 PM
Senator Olson requested a copy of the letter. He wondered
whether there was a timeline for the section that began on
Page 9, Line 6. He had heard frustrations about the
decision making process and plans that had been put on
hold.
Attorney General Burns surmised that the information was in
the existing statute. He explained that the bill focused on
paragraphs that had merited changes and that the only
change to the particular section required a decision to be
communicated in writing. He elaborated that the expectation
was that time frames existed. The focus of the section was
to assure coastal districts that there was a meaningful
dialogue and basis upon which a decision was made in the
review process.
Senator Olson wondered about a timeline for the
administrative process and quoted from the bill,
"enforceable policy becomes final when its adoption is no
longer subject to further review through either a judicial
or administrative process" (Page 11, Lines 21-23). Attorney
General Burns replied that the department did not want a
regulation to start that could be challenged and flipped by
the court. He explained that there could be the opportunity
for a person to submit materials to the board for review
and it was difficult to determine the timeline because
there could be multiple hearings with no ability to control
the court's calendar.
12:56:18 PM
Senator Olson understood that the department could not
control a judicial review, but that it could control the
administrative process. He believed the importance of the
timeline was to provide the ability for the department to
implement the proposed plan in the event that the courts
did not make a decision or provide a plan of action.
Attorney General Burns agreed, but contended that it was
implied in the bill. He explained that the standard for the
administrative review was either the 20 days under
reconsideration or the 60 days in conjunction with board
review, or the 60 days in conjunction with a consistency
review. He relayed that the times would control the
administrative review process.
Senator Olson expressed concern about the lack of
definitive timelines and that the power was still within
the Department of Natural Resources. Attorney General Burns
replied that he understood the concerns and that the focus
of the bill had been to create balance that addressed
concerns regarding definitive timelines.
12:58:46 PM
Senator Thomas asked whether there would be a complete
record kept of all meetings under 46.40, including
subsequent reviews, and read from Page 6, Line 17:
"summarize the minutes of the board's discussions of issues
related to Chapter 46.40 and coastal uses of its resources
of the state." Attorney General Burns replied that the
board would maintain its own records, but many times a
board just kept records. The provision forced the
department to participate in the review process and provide
a summarization of the minutes. The goal was to create
another layer that summarized discussions and provided an
opportunity for a person to look back at the record and
evaluate the basis of the summarization. He explained that
the provision would also provide an index that would help
save frustration and time in the event of an appeal.
1:01:10 PM
MIKE SATRE, EXECUTIVE DIRECTOR, COUNCIL OF ALASKA
PRODUCERS, testified in support of CSHB 106 (FIN). He
believed that the legislation was a carefully crafted
agreement that allowed local districts to protect coastal
areas and for a responsible and predictable pathway towards
the development of the state's resources. He opined that
the bill addressed the concerns of local districts related
to subsistence, allowed them to create approvable plans
with enforceable performance based standards, and provided
districts with the ability to provide meaningful input. He
relayed that the mining industry was happy that resource
industries would have a seat on the policy board and was
supportive of the detailed procedure related to elevated
disputes. The council believed that the bill fit its policy
that permitting should be science based, rigorous, non-
duplicative, and predictable. He understood that committee
members had concerns about aspects of the bill and asked
that members work to ensure that all parties could still
agree on a path moving forward.
1:04:01 PM
Co-Chair Stedman asked whether Attorney General Burns had
any additional remarks.
Attorney General Burns reiterated that an incredible amount
of time had gone into the crafting of the legislation from
all parties concerned. He emphasized that Department of
Fish and Game Commissioner Cora Campbell had been
instrumental in providing comments throughout the process
and that the four commissioners had been intimately
involved in the process. He believed that the words of
North Slope Mayor Itta rang true (copy on file). He
stressed that because the bill had not been endorsed by any
particular entity it was the best and reflected balance. He
read from Page 2 of Mayor Itta's letter: "I'm very pleased
to see that this bill reconstitutes a coastal policy board
and we understand that designated areas have been limiting.
It also establishes clear mechanisms for the state and the
districts to engage in the process leading to approved
policies." He communicated that all involved parties had
concerns, but that the bill represented a balance.
1:06:37 PM
Co-Chair Hoffman felt that the prior committees had done
their due diligence in their review of the bill. He opined
that the process was not complete and that it was incumbent
on the Senate Finance Committee to conduct its own due
diligence and to make changes that it believed would
improve the program for citizens and the State of Alaska.
CSHB 106 (FIN) was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE BILL NO. 183(FIN) am
"An Act relating to the Village Safe Water Act; and
providing for an effective date."
1:07:37 PM
Co-Chair Hoffman MOVED to report CSHB 183(FIN) am out of
committee with individual recommendations and the
accompanying fiscal note.
CSHB 183(FIN) am was REPORTED out of committee with a "do
pass" recommendation and with previously published fiscal
note: FN1 (DEC).
CS FOR HOUSE BILL NO. 155(L&C)
"An Act relating to the applicability of prevailing
wage rates to public construction contracts; and, with
regard to public construction contracts, relating to
notifications, bonding notifications, filings,
notices, primary contractors, final payments,
penalties, advertised specifications, required
contract provisions, terminations, lists of violating
contractors, and remedies."
1:08:32 PM
Co-Chair Hoffman MOVED to report CSHB 155(L&C) out of
committee with individual recommendations and the
accompanying fiscal note.
CSHB 155(L&C) was REPORTED out of committee with a "do
pass" recommendation and with previously published fiscal
note: FN1 (LWF).
1:09:15 PM
Co-Chair Hoffman MOVED to ask unanimous consent that the
Senate Finance Committee authorize the chair of the
Committee to expend an amount not to exceed $200,000 in
Senate Finance Committee funds to acquire the contractual
services necessary to conduct a detailed study of oil and
gas employment on Alaska's North Slope that included an
analysis of work activities, job classifications, wages,
contractual labor and hiring practices and the industry's
use of resident versus non-resident employment.
Co-Chair Stedman OBJECTED for the purpose of discussion.
Co-Chair Stedman explained that the committee had received
conflicting employment information from the industry and
the Department of Labor and Workforce Development. The
issue needed to be sorted out in order for the committee to
have a discussion the following session. He expounded that
the study should be conducted during the fall to allow the
Senate Labor and Commerce Committee time to review the
findings prior to the conclusion of its dialogue on the oil
and gas situation in the Arctic.
Co-Chair Stedman WITHDREW his OBJECTION.
There being NO further OBJECTION it was so ordered.
1:10:36 PM
RECESSED
ADJOURNMENT
The meeting was adjourned at 11:40 PM.