CS FOR SENATE BILL NO. 102(FIN) am An Act repealing the Alaska coastal management program; relating to an extension for review and approval of revisions to the Alaska coastal management program; relating to reviews and modifications by the Department of Natural Resources; relating to coastal resource district policies; providing for an effective date by amending the effective date of sec. 45, ch. 24, SLA 2003; and providing for an effective date. MELANIE LESH, STAFF, SENATOR GARY STEVENS, noted that the Alaska Coastal Management Program (ACMP) is a partnership between federal, state, and local governments providing a voice in federal decision-making. Alaska is one of 34 coastal states that utilize the program, which annually channels millions of dollars in federal grant money. ACMP has helped guide coastal development in Alaska since it was enacted in 1977 and without the program, State and local governments lose their ability to control development on federal land and the outer continental shelf. In addition, the State will lose millions in federal coastal management planning money. In 2003, HB 191 substantially revised the State coastal program. The federal Office of Ocean and Coastal Resource Management (OCRM) must approve the revised program. The 2003 legislation included state-imposed deadlines for revisions to local coastal programs. Coastal districts are attempting to follow the statutory directive to revise programs to meet the new requirements, but have repeatedly said that they need more time to complete that process. Ms. Lesh noted that the version before the Committee extends the existing statutory deadline for district coastal program submissions by eight months and a correlative delay in dates annulling existing standards and program until March 1, 2007. The extensions would ensure an orderly and efficient transition to the new program. Ms. Lesh advised that the House Resources Committee amended the bill setting a "kill date" ending the Coastal Zone Program entirely if OCRM approval does not occur by January 1, 2006. That date is the deadline in which the Department has assured the Legislature, OCRM will have approved the (NEPA) National Environmental Protection Act or the Environmental Impact Statement (EIS) process of the new State coastal program. That section puts in place the repealing and sunset clauses. An amendment in the House Resources Committee allowed those provisions to take effect after May 10, 2006, which leaves the Legislature time to act, if necessary, to extend the sunset dates of the old coastal management program. 6:46:46 PM JOE BALASH, STAFF, SENATOR GENE THERRIAULT, pointed out that the House Resources Committee substitute made five changes: · Extends the deadline in accordance with what the Governor indicated he would support; · Provides for a sunset and audit four years after the full implementation of the changes; · Adds language regarding the adoption by reference of State statute regulations as well as federal regulations; · Changed the old district programs; and · Provides a specific deadline for the Department to update their "ABC" list. 6:49:16 PM Representative Croft questioned a provision indicating that the entire program would be eliminated if the federal government did not approve it. Mr. Balash explained that st the July 1 deadline was "keyed" from what the feds indicated they intended to. It takes approximately 14-weeks st to complete an EIS. Given the January 1 date, there should be enough time for Office of Ocean and Coastal Resource Management (OCRM) to engage in the commitments they made to the State of Alaska. The date that the sunset and/or appeal th. takes affect is May 10. That date provides the Legislature an entire session to deal with the ramifications if OCRM fails to approve the program. He indicated that it resulted from Section 22, crafted in the House Resource Committee. 6:51:47 PM st Representative Croft understood that the January 1 date was not problematic. He asked why the State would want to be placed in that consequence, given that the program is the only way which the State can have impact on federal decision-making. Mr. Balash explained that date had been chosen because other dates in earlier sections of the bill st returned to March 1 either 2006 or 2007. In order to satisfy the Governor's requirement for the 6-months, grants additional time for districts to revise plans for review and approval. 6:53:30 PM RANDY BATES, DEPUTY DIRECTOR, DIVISION OF PROJECT MANAGEMENT & PERMITTING, DEPARTMENT OF NATURAL RESOURCES, offered to answer questions of the Committee. Co-Chair Meyer asked about the fiscal note. Mr. Bates explained that by extending the coastal district submissions deadline, it would extend the time frame that it takes the Department to review and approve plans. The revision was th supposed to occur June 30 2006. There are currently funds to accommodate staff review coastal district plans. The th remaining money runs out June 6, 2006. In order to be able to accommodate and review those decisions, the Division needs three staff for eight months as requested in the note. 6:55:56 PM Co-Chair Meyer noted an amendment included in member's packets, which would extend the program. He asked if that would increase costs. Mr. Bates replied that Amendment #1 would not impact the fiscal note. 6:56:24 PM Co-Chair Chenault questioned if the employees are currently on staff. 6:56:43 PM Mr. Bates corrected previous comments, noting that Amendment #1 significantly impacts the note. 6:57:04 PM Representative Holm asked if the employees were currently on staff. Mr. Bates stated they are currently on staff and the request keeps them there for an additional eight months. JUDY BRADY, EXECUTIVE DIRECTOR, ALASKA OIL AND GAS ASSOCIATION (AOGA), ANCHORAGE, stated that "they could live with the version of the bill" adopted by the House Resource Committee. She noted that AOGA had opposed possible extensions for a number of reasons and that they would like to see HB 191 implemented. Ms. Brady added that AOGO would support the bill but could not support any other extension. 6:59:29 PM Co-Chair Meyer inquired why they would not support any further extensions. Ms. Brady advised that AOGA would like to see OCRM finish their work. The initial program was voluntary. The needs of the program have changed dramatically in the past thirty years. Passage of HB 191 recognizes the differences and refocuses the program. She noted delays on the State side. OCRM has not supported any of the changes and has deliberately "dragged their feet" for implementation. Representative Croft inquired about the current need for coastal zone management plans. Ms. Brady explained that the State was interested in that program during the 1970's; however, today, those needs have changed and HB 191 reflects that. Some of the enforceable policies are now enacted in State, federal and/or municipal law. There are implementation questions; AOGA does not want to go another three years before anything happens. She emphasized that it should not be a federal program. 7:04:34 PM Representative Croft inquired how did "threatening to withdraw from the program" affect the relationship with the federal government. He thought that would be illegal and problematic. Ms. Brady commented that their attorney had evaluated OCRM's arguments, finding them wrong in every instance. No other state in the Union has been held to the standard that Alaska has. The Alaska program is a "jewel in the crown" of the federal agency and coastal management is a big deal. She believed the federal government would never let the program go and that a long implementation period would negatively affect and jeopardize the program. 7:07:40 PM Co-Chair Meyer summarized that AOGA supports the House Resources Committee date and does not support the amendment. Representative Weyhrauch MOVED to ADOPT a corrected Amendment #1, Line 3 and Line 7, deleting "February" and inserting "March" and Line 11, deleting "March" and inserting "April". Vice Chair Stoltze OBJECTED. Representative Weyhrauch requested that the record reflect the true and accurate costs. REPRESENTATIVE SEATON addressed Amendment #1. He spoke in support of SB 102, which allows the State to impose their standards on federal land. Current dates indicated in the bill allow the Legislature time to act. If it ends on st January 1, the Legislature is removed from the loop. Representative Seaton spoke to the fiscal note, clarifying that the way in which the program works is in six-month st intervals. Beginning July 1, the money could only be used for implementation of the preliminary approved plan. There is nothing in regulation that prevents the local districts from continuing to use funds for developing local district plans. He highlighted the process of review and asked when it "goes away". 7:15:45 PM Representative Seaton observed it would leave without approval. The federal money would remain and then could be used for other activities for local costal district plans to be written. The federal money cannot be used for approval implementation after the initial six months. 7:17:56 PM Mr. Bates added that the Amendment could result in the fiscal note being increased by $467 thousand dollars. The program received $2.8 million federal dollars. Amendment #1 would provide a two-month extension. He provided a brief history. OCRA has been preparing for the past several st months for the preliminary approval of July 1, 2006. Preliminary approval only extends the time for six months. st January 1 would be the date deadline in which the State could no longer spend monies on the implementation of the coastal program. By extending the deadlines as proposed in Amendment #1, the State agency could access those funds. In order to supplement the money to guarantee that the program works toward change, the fiscal note represents the amount needed by the Division to keep employees working. 7:21:46 PM Representative Croft questioned why the federal government would want to "shut off" the money. 7:22:52 PM Mr. Bates responded it is a federal law, which only allows for federal approval for the six months; there is no way to bend that extension past the six months. He reiterated that the State could no longer expend the federal funds. In response to further queries by Representative Croft, Mr. Bates pointed out that HB 191 change coastal management and requires implementation of the regulations. The coastal management program is codified in HB 191. The State cannot choose to alternatively implement another program that either the Legislature has not embraced or acted upon. If st OCRM does not finish their work by January 1, 2006, there are no more federal funds to continue implementing the program. Mr. Bates added, the Administration opposes the amendment. 7:26:07 PM In response to a question by Representative Croft, Mr. Bates th noted that on April 14, 2005, a letter was received detailing the final changes needed for approval of the coastal program. The Division is in the process of making those regulatory changes. He provided information regarding timelines needed for preliminary approval. Presently, the program is basically approvable. 7:28:21 PM Mr. Bates commented on why the Administration objects to the time extensions. The Governor has committed to three timeline extensions for coastal management: · Extending the State standards · Extending the revised coastal plan deadline by six months · Extending the district plan sunset deadline by six months The extensions were tiered off in HB 191 and included in the House Resources Committee version, the one the supports. He advised that the Division and the Administration do not support Amendment #1. · OCRM has been preparing for eight months and when preliminary approval is offered, it would be within thth that time frame. On April 14 and 18, an agreement was made regarding the need for additional steps to get e ACMP into a form under federal law. · It is expected that preliminary approval will be st made by July 1, 2005. · OCRM has confirmed that they can and will approve NEPA within the six-month time frame. · Without a deadline, it is an invitation for the federal government to delay approval and hold the agency hostage. · Extending the deadline will cost the State a significant amount of money. · The amendment forces the Legislature into emergency action next year. It is important to recognize that the structure of the committee substitute without Amendment #1, provides the Legislature authority needed for approval of the coastal program. · The Legislature would have the session to evaluate the position. 7:33:25 PM A roll call vote was taken on the motion. IN FAVOR: Hawker, Holm, Kelly, Moses, Stoltze, Foster, Meyer, Chenault OPPOSED: Joule, Croft Representative Weyhrauch was not present for the vote. The MOTION FAILED (2-8). 7:35:42 PM Representative Croft stated for the record that Administration's the position would hurt all the coastal communities. He commented on the risk damage and hoped it would survive without too much trouble for the State. 7:36:56 PM Representative Foster MOVED to REPORT HCS CS SB 102 (RES) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. HCS CS SB 102 (RES) was reported out of Committee with a "do pass" recommendation and with zero note #2 by the Department of Commerce, Community & Economic Development, zero note #3 by the Department of Administration, zero note #4 by the Department of Environmental Conservation and fiscal note #5 by the Department of Natural Resources. 7:37:22 PM