Legislature(2003 - 2004)
04/23/2003 03:35 PM Senate RES
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SB 143-COASTAL MANAGEMENT PROGRAMS
CHAIR OGAN announced that he did not intend to move SB 143 out
of committee today and he apologized in advance in case the
committee is unable to hear from everyone who has signed up to
testify. He said the committee would first hear a brief overview
of what the legislation does and then put the proposed committee
substitute (CS) on the table.
SENATOR ELTON moved to adopt the proposed CS (labeled 03-0069
bil3.doc), and said that two committee members have a schedule
conflict and will need to leave at 5:00 p.m. He said he is
assuming that Department of Natural Resources (DNR) and Division
of Governmental Coordination (DGC) staff will be available to
answer questions at the next meeting.
CHAIR OGAN said that paid staff can come back and that he
planned to give priority today to citizens who are taking time
off of work to testify.
SENATOR DYSON said he believes it is unfortunate to schedule
meetings while standing committees are scheduled to meet,
especially when substantive bills are being discussed. He
encouraged members to not schedule another meeting during
standing committee hearings out of respect for those who have
made an effort to testify.
CHAIR OGAN announced he would give first priority to people who
have flown to Juneau to testify.
MS. MARTY RUTHERFORD told members she represents DNR and the
Administration and would speak to the proposed CS. She said she
recently left DNR after working for that department for 11 years
and is now under contract with the department. She introduced
Mr. Breck Tostevin with the Department of Law, Mr. Pat Galvin,
the past director of DGC, and Mr. Randy Bates who is employed as
the newly appointed Coastal Zone Management program coordinator
in DNR. These people comprise the team that reworked SB 143 and
made very substantive changes to the bill in response to
comments received by the Administration while its companion
bill, HB 191, was under review in the House. She informed
members that a brief, one-page synopsis of the committee
substitute, a transition timeline, a comparison chart and a
sectional analysis were distributed to them. She then said she
would provide an overview of the primary elements of the CS.
CHAIR OGAN announced that no objection was heard to the adoption
of the work draft, therefore the motion carried. He then noted
that Senate President Therriault had joined the committee.
MS. RUTHERFORD made the following comments.
The Coastal Zone Management Program is an older
program that has not appropriately responded to
Alaska's maturing statutory and regulatory regime.
Therefore, the program is often redundant, using local
enforceable policies that are often a reiteration of
existing regulatory agencies' permit standards. The
program is also unpredictable. It is overly broad in
scope, takes a long time, and delays the issuance of
permits and start up of projects. The statewide
standards and local enforceable policies are vague and
are extremely subject to multiple interpretations.
CHAIR OGAN announced that Representative Kerttula joined the
committee.
MS. RUTHERFORD continued.
While the program has problems, the sweeping changes
embedded in the original SB 143 eliminated many of the
primary reasons that Alaska first embraced the Coastal
Zone Management program, including state and local
control over projects requiring federal authorization
and state and local influence on direct federal
activities.
During discussions of the original bill on the House
side, the Administration took some of the comments
made by citizens and districts to heart. As a result,
the committee substitute returns to the basic
structure of the existing Coastal Zone Management
program. It retains the existing four coastal resource
service areas, all of which are located in the
unorganized borough in Western Alaska. In addition,
all existing coastal districts continue and retain the
same authorities and responsibilities as under the
current program. This committee substitute also
retains local enforceable policies and all of the
statewide standards of the program, including the
habitat standard and the subsistence standard.
Furthermore, it ensures that all federal activities,
activities requiring a federal permit, or an activity
requiring a state permit will have a consistency
review. District enforceable policies will remain
applicable to all projects that are subject to a
consistency review, not just the Outer Continental
Shelf (OCS) projects and federal activities that were
envisioned in the original SB 143. The committee
substitute assures the districts will retain their
seat at the table as project decisions are made.
The committee substitute, however, makes significant
changes to the program in an attempt to retain the
important elements while addressing the problems. It
will:
· eliminate the Coastal Policy Council and transfer its
duties to the DNR commissioner
· place a sunset provision on the current statewide standards
and coastal district plans and mandate their replacement
standards be clear, concise, and not susceptible to
subjective interpretations and not duplicative of otherwise
existing requirements
· clarify that local enforceable policies may not address a
matter that is regulated or authorized by state or federal
law unless the policy specifically relates to a matter of
local concern - a test will be embedded in the statute to
assist in making that determination
· provide important clarification to the consistency review
process in order to ensure more predictable timelines and
standards, including the scope of a project that is subject
to review and when a project can proceed in phases, and it
encourages the use of general permits
· clarify that the Department of Environmental Conservation's
(DEC) permits and authorizations will constitute the
consistency determination for activities regulated by DEC
air, land and water quality standards
· insulate the Coastal Management Plan consistency review
from delays associated with those complex permits and
authorizations
MS. RUTHERFORD told members the program is very complex. She
offered to have Mr. Tostevin describe the sectional elements of
the bill but noted in the interest of time, that information has
been provided in written form.
CHAIR OGAN said he would plan to hear from Mr. Tostevin on
Friday.
SENATOR LINCOLN requested a copy of Ms. Rutherford's testimony.
CHAIR OGAN took public testimony.
MR. KEN DONAKOWSKI, the Alaska permitting manager for Conoco
Phillips, told members that Conoco Phillips is the state's
largest producer of oil, leaseholder, and most aggressive
explorer. As such, permit streamlining is imperative to maintain
Conoco Phillips' enviable position in Alaska and to encourage
other oil and gas firms to elevate their respective standing in
these three areas. Conoco Phillips unequivocally supports AOGA's
position on the committee substitute. He offered two
observations. This committee substitute preserves a role for the
coastal districts and formally introduces the concept of
enforceable policies into the statutory language. Second, the
regulatory framework for environmental protection in Alaska is
preserved by this committee substitute and, in essence, that
framework remains whole and intact.
SENATOR ELTON noted Mr. Donakowski said this legislation will
empower coastal districts by introducing the concept of
enforceable policies and asked him to elaborate because many
people from the coastal district side are confused about that.
MR. DONAKOWSKI said enforceable policies are policies that,
according to the criteria laid out in the statute, are issues of
importance to local concerns that do not duplicate the
regulatory framework.
CHAIR OGAN thanked Mr. Donakowski for Conoco Phillips'
aggressive posture in exploration and development and for
introducing cutting edge technology.
MR. LARRY HOULE, general manager of the Alaska Support Industry
Alliance, told members the Coastal Zone Management Program
includes the consistency review process, which requires all
projects located in the coastal zone to obtain a consistency
determination before state or federal permits can be issued.
Nearly all oil and gas activities undergo the consistency review
process. Its purpose is to ensure that projects are consistent
with state and local enforceable policies. Funding for
exploration and development in Alaska faces increasing
competition on a worldwide scale. Many competing projects are
closer to markets and are less capital intensive. Operators need
reliable predictions, permitting schedules, and requirements.
Delays in the permit timelines are significant factors that can
adversely affect the economic feasibility of a project. The
contracting community in Alaska is concerned about the lack of
schedule and scope certainty and the unpredictability and
subjective nature of the overall review process that currently
exists. He said the Alliance endorses the committee substitute;
it believes it will streamline the review process and improve
predictability.
MR. BOB STINSON, President of Con-Am Construction of Anchorage,
stated support for the committee substitute or any other form of
the bill that will change the current process. The current
Coastal Zone Management Program's rules and process are unclear
and need to be fixed so that an applicant with a beneficial
project knows what to expect when submitting an application. He
sat on the Governor's DNR transition team and listened to large
corporations and local companies express frustration over the
current review process. The transition team recommended
streamlining that process.
He then described an experience his company encountered as
follows. Anchorage Fueling and Service Company, a consortium of
22 major airlines, hired his company to replace a small, aging
pipeline routed through residential streets in Anchorage. That
pipeline delivered most of the jet fuel to the Ted Stevens
International Airport. His company was hired to design and build
a larger pipeline to reliably meet increasing demand. His
company submitted its permit application to the state, the U.S.
Corps of Engineers and the Municipality of Anchorage (MOA),
after preliminary discussion with each entity revealed the
soundness of the project and, in particular, the routing of the
pipeline. The project quickly became a target for environmental
concerns since the routing took the new pipeline through
portions of the Anchorage coastal mud flats. Throughout the next
1 1/2 years, his company spent an additional $1.5 million
securing the permit, due to delays in the Coastal Zone
Management process. The project was originally estimated to cost
$6 million.
MR. STINSON said in fact, there was no process. DGC did not know
how to handle the application and how to coordinate with other
agencies and the public. He ended up hiring many consultants to
invent a process for permit review and coordination. DGC had no
clear timetable or time limitations for permit review. Phasing
of the project was not allowed. All agency permits had to be
completed before a consistency determination could be issued.
There was no scope of review to which anyone could work with. He
said this project was not a resource extraction project; it was
an infrastructure improvement project for the airport. He said
had the State of Alaska owned the old pipeline, a permit would
have been issued in an expeditious way, allowing the airport to
meet its growing demand for fuel. The airlines that experienced
this permitting nightmare could not understand why the state was
not supportive of this beneficial project and talked about
taking their business elsewhere. He encouraged members to move
the bill from committee.
MR. CHUCK DEGNAN, testifying from Unalakleet, told members the
Bering Straits Coastal Resource Service Area was very concerned
about the original bill that eliminated coastal resource service
areas. Its other concern is the sunset provision for making new
plans. The rural areas have clean air, water and land because of
very little development. However, the development that does
occur takes a long time because it is planned so that projects
flow. Very few have been delayed.
MR. DAN BEVINGTON, Coastal District Coordinator for the Kenai
Peninsula Borough, said he recognizes that writing legislation
to streamline permitting is a challenging task, and thanked
members and the Governor for attempting it. He said the Kenai
Peninsula Borough has supported its own, similar program for
more than two decades. During that time, the Borough has passed
over 34 ordinances and 7 resolutions that directly support the
coastal resource management program.
MR. BEVINGTON said the legislation asserts that local
governments should exert their own coastal management control
through planning and zoning powers. That seems to add a level of
complexity when the Borough does not need to assert any more
permitting powers through its participation in the program. The
Borough appreciates the fact that the current working draft
addresses that and allows the Borough that opportunity. However,
the Kenai Peninsula Borough remains concerned about the loss of
similar policies under the provision that DEC will have the
exclusive determination of consistency of the program under its
authorities. It is also concerned about the summary discharge of
the Alaska Coastal Policy Council without developing a similar
representative body within DNR. The issue of promoting and
balancing economic development with long-term community
interests demands the meaningful involvement of communities
across the state.
MR. GARY CARLSON, Senior Vice President of Forest Oil and a
member of AOGA, stated support for AOGA's position but added the
following comments. The ACMP process has become a regulatory
maze that is costly to the state and to industry. The program's
ambiguities and uncertainties have provided a breeding ground
for obstructionists and special interest litigants to delay
responsible development. The bill will make substantial
improvements to the process by establishing deadlines,
eliminating duplication of state and federal law, establishing a
bright line as to when the ACMP applies, and eliminating delays
in consistency determinations. It also requires the ACMP
standards to be clear, precise and not subject to multiple,
subjective interpretations. This should improve the efficiency
of the permitting process and reduce litigation exposure of the
state and the industry. He stated support for the legislation.
MS. LISA LOMBARGEN informed members the City of Valdez and the
coastal district is very pleased with the Administration's
efforts to listen to the concerns of the coastal district about
participation and to provide a level playing field as the
permits are being reviewed for consistency.
MR. BOB SHAVELSON, Executive Director of Cook Inlet Keepers,
told members he was speaking on behalf of over 500 members
throughout Southcentral Alaska. He made the following points.
Regarding Ms. Rutherford's comment that districts would retain
their same authorities, Section 14 will clearly eliminate a vast
extent of local district authorities. It will be virtually
impossible for local districts to have policies that will meet
the convoluted and legalistic language in Section 14. He
suggested to the House Resources Committee that it request
examples of what acceptable local enforceable policies will look
like. He also suggested the ability to review a mark-up of the
Kenai Peninsula Borough coastal management enforceable policies
and which ones would be retained under this legislation. He does
not believe many of those policies, if any, will remain intact.
Although SB 143 has a zero fiscal note, it has taken the State
of Alaska over 15 years to approve all of the coastal management
programs. SB 143 will create a considerable financial burden on
local districts. It is an unfunded mandate that will require
these districts to rewrite the plans they spent many years and
dollars to develop.
Regarding the timeline, MR. SHAVELSON said it does not include
time for the environmental impact statement process under the
National Environmental Policy Act. This is an extensive policy
change, along with the elimination of the Coastal Policy
Council. This will require an extensive, time consuming
environmental impact statement for the entire state coastal
program. He said SB 143 will add complexity and confusion
because as local district authorities are removed, it will
encourage the adoption of local ordinances. Therefore, one-stop
permitting will no longer be available so industry will have to
get state permits and local approvals.
TAPE 03-32, SIDE A
SENATOR BEN STEVENS asked Mr. Shavelson to repeat the
terminology he used to describe the Kenai Borough's policy
requirements that the state would not adopt under this program.
MR. SHAVELSON said he was referring to Section 14 of the pending
legislation, which includes some very restrictive and legalistic
jargon that will make it difficult for local districts to adopt
local enforceable policies.
VICE-CHAIR WAGONER asked Mr. Shavelson if Cook Inlet Keeper has
500 members or whether they are members of other organizations
that Cook Inlet Keeper represents.
MR. SHAVELSON said they are members of Cook Inlet Keeper.
MS. DANA OLSON, testifying from the Mat-Su Valley, told members
that HB 257 relies on issues of right-of-way.
VICE-CHAIR WAGONER interrupted to ask Ms. Olson to restrict her
testimony to the bill before the committee.
MS. OLSON clarified that she is speaking about the rights-of-way
in the coastal area. She told members she is concerned when the
land use plans do not have the rights-of-way included, and the
legislature is passing other bills that affect the coastal zone,
because she does not have the means to have adequate notice. She
noted that an enforceable policy is defined by the federal act
and it does not include zoning and planning. It says that
judicial decisions are enforceable policies, as well as
constitutional provisions. Therefore, zoning not based on the
constitutional or judicial standards would not be enforceable
policies of the local district. She said the Clean Water Act
does not limit the scope of which local concern is on non-source
point pollution. She noted the 1990 amendment to the Coastal
Zone Management Act said the act had to consider the zone as a
whole. Considering only local enforceable policies would violate
that.
VICE-CHAIR WAGONER announced that he would hold the bill in
committee and it would be heard again on Friday, at which time
the committee would take public testimony. He then adjourned the
meeting.
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