Legislature(1993 - 1994)
04/08/1994 08:30 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 8, 1994
8:30 a.m.
TAPES
SFC-94, #61, Side 1 (700-end)
SFC-94, #61, Side 2 (end-000)
SFC-94, #63, Side 1 (000-end)
SFC-94, #63, Side 2 (end-350)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 8:50 a.m.
PRESENT
In addition to Co-chairs Pearce and Frank, Senators Rieger,
Jacko, and Sharp were present. Senators Kerttula and Kelly
joined the meeting after it was in progress.
ALSO ATTENDING: Paul Fuhs, Commissioner, Department of
Commerce & Economic Development; David Rogers, legal
consultant to Senate Finance Committee; Jim Eason, Director,
Division of Oil and Gas, Department of Natural Resources;
C.E. Swackhammer, Deputy Commissioner, Department of Public
Safety; Michael Walleri, General Counsel, Tanana Chiefs
Conference; Susan Sorensen, fiscal analyst, Legislative
Finance Division; representatives of the media, aides to
committee members and other members of the legislature.
VIA TELECONFERENCE: The following individuals testified on
SB 308: Peter VanTuyn, Trustees for Alaska, Anchorage;
Dorn Hawxhurst, commercial fisherman, CDFU, Cordova;
Alice Ruby, Chair, CRSA Board, Bristol Bay, Council member,
City of Dillingham, and alternate representative of
Alaska Coastal Policy Council, Dillingham;
Betty Glick, Kenai Peninsula Borough, Kenai;
Wayne Coleman, RCAC, Kodiak;
Chuck Degnan, Coastal District Director,
Coast Resource Service Area, Unalakleet;
Brad Penn, Marathon Oil Co., Anchorage;
Jon Isaacs, Jon Isaacs & Assoc., Anchorage;
Fran Bennis, Alaska Marine Conservation Council, Anchorage;
Sue Flensburg, Bristol Bay Coastal Resource Service Area,
Anchorage;
Walt Furnace, General Manager, Alaska Support Industry
Alliance,
Anchorage;
Steven Porter, ARCO, Anchorage;
Theo Matthews, United Cook Inlet Drift Association, Kenai;
Loren Flagg, Kenai Peninsula Fishermen's Association, Kenai;
Nancy Lord, commercial fisherman and public citizen, Homer.
Later in the meeting, Daniel Moore, on behalf of the Mayor
of Anchorage, and Municipality of Anchorage; and Richard
Weinig, trial attorney, testified on SB 203 via
teleconference from Anchorage.
SUMMARY INFORMATION
CSSB 203(CRA) An Act relating to police protection service
areas in unified municipalities; and to
police protection provided by the state in
certain municipal areas.
Discussion was had by Senators Kerttula,
Rieger and Kelly. Daniel Moore, on behalf of
the Mayor of Anchorage and the Municipality
of Anchorage, was opposed, and Richard
Weinig, trial attorney, testified in support
of SB 203 via teleconference from Anchorage.
C.E. Swackhammer, Deputy Commissioner,
Department of Public Safety, was also opposed
to SB 203. SB 203 was HELD in committee.
CSSB 308(RES): An Act modifying administrative procedures
and decisions by state agencies that relate
to uses and dispositions of state land,
property, and resources, and to the interests
within them, and that relate to uses and
activities involving land, property, and
resources, and to the interests within them,
that are subject to the coastal management
program when the use or activity is to be
authorized or developed in phases; and
providing for an effective date.
CSSB 308(FIN) work draft "U" was ADOPTED by
the committee. David Rogers, legal
consultant to Senate Finance Committee; Kyle
Parker, Special Staff Assistant, Office of
the Governor; Jim Eason, Director, Division
of Oil and Gas, Department of Natural
Resources; and Paul Fuhs, Commissioner,
Department of Commerce & Economic
Development, testified in support of CSSB
308(FIN) work draft "U".
SB 368: An Act relating to the human services
community matching grant program; and
providing for an effective date.
Senator Sharp read the sponsor statement. SB
368 was REPORTED OUT of committee with a "do
pass," and a zero fiscal note for the
Department of Health & Social Services.
CS FOR SENATE BILL NO. 308(RES):
An Act modifying administrative procedures and
decisions by state agencies that relate to uses and
dispositions of state land, property, and resources,
and to the interests within them, and that relate to
uses and activities involving land, property, and
resources, and to the interests within them, that are
subject to the coastal management program when the use
or activity is to be authorized or developed in phases;
and providing for an effective date.
Co-chair Pearce announced that SB 308 was before the
committee and invited Kyle Parker, Special Staff Assistant,
Office of the Governor; David Rogers, legal consultant to
Senate Finance Committee; and Jim Eason, Director, Division
of Oil and Gas, Department of Natural Resources, to join the
members at the table.
Co-chair Pearce noted a drafting error on SB 308 work draft
"U" on page 7, lines 29, 30 and 31. An errata sheet had
been sent out with the correction.
End SFC-93 #61, Side 1
Begin SFC-93 #61, Side 2
Co-chair Frank MOVED for adoption of CSSB 308(FIN) work
draft "U". No objection being heard, it was ADOPTED.
DAVID ROGERS asked Jim Eason to speak to the changes in the
CS.
JIM EASON said that substantive changes had been made to the
bill. Five meetings had been held with interested parties
to draft amendments. He said that CSSB 308(FIN) was an
attempt to bring those interests together and still provide
the protection for the continuation of a leasing program.
Mr. Eason said one main concern was that the bill did not
say what the intent had been. He said that Section 1 had
been rewritten and stood as the keystone of the bill. One
example was the word "direct" that had received much
criticism and had been changed to "reasonable foreseeable
effects." Another concern in Section G was language that
would restrict impact reviews by Fish & Game. That language
had been deleted and reverted back to existing statutes.
Mr. Eason went on to say that there had been interest in
earlier and more extensive explanations of what was proposed
in oil and gas findings. The Ombudsman prepared a report
making specific recommendations including one to mandate the
preparation and issuance of a preliminary best interests
findings for oil and gas leasing. This was contained in the
bill. Also, other amendments said that a preliminary
finding for oil and gas lease sale would be issued no later
than six months before a proposed sale and the public would
have a minimum of 60 days to make comments to the
department.
Mr. Eason commented on the opinion what had lead to the
introduction of SB 308 was the abuse of the Judicial system
by some of the cases that had gone to court. Although the
opinion was not universal, the bill addressed some of the
troubling patterns of lawsuits that preceded this
legislation. The intent was to encourage both full and
timely public participation. It also told the court, in
pursuing an appeal of a decision to hold a lease sale, the
person that pursued that appeal had to have participated in
the administrative process leading to the decision. That
person or group would have to have participated in a
meaningful way so that their specific concerns were
identified in the administrative process. It also proposed
that the individual or group had to appeal through
administrative remedies including the Commissioner's office
before going to the Superior Court and also, that in
pursuing an appeal to the Superior Court, new issues could
not be raised that had not been raised in the administrative
review. These amendments were found in Section 4,
particularly subsection I, J, K, and L.
Mr. Eason said that in concerns regarding the amount of
notice and type of notice that were given for oil and gas
leasing, SB 324 was used to draft proposed amendments to
Section 7. The amendments expanded the notice given for oil
and gas leasing by insuring that not only was the lease to
be published but display ads would be used for a better
understanding by the public, and mandatory notice by
electronic media would be sent setting a new minimum
standard for notice options.
Finally, Mr. Eason said that the last major change was to
the section dealing with Title 46 amendments. Two concerns
were that there was a different standard for reviewing
projects on the federal and state level by the use of the
term "direct", and that "phased consistency determinations"
was not sufficiently defined. In answer to Co-chair Pearce,
Mr. Eason said that language addressing "phased consistency
determinations" following federal regulations could be found
in Section 8. He felt that both concerns he mentioned had
been addressed in the new CS.
In answer to Senator Rieger, regarding the phrase "in the
area", Mr. Rogers said those words had been removed from
CSSB 308(FIN).
At this time, Co-chair Pearce announced the teleconference
portion of the meeting would begin.
PETER VANTUYN, Trustees for Alaska, testified from Anchorage
that he had just received the bill. It struck him that CSSB
308(FIN) went further than any legislation he had seen in
limiting meaningful public input in the state agency
decision making process. It was questionable whether the
public would be able to give meaningful input in the phasing
process. Besides phasing, he had two other main concerns.
One was that a person or individual had to have raised an
issue previously. He felt that precluded the public from
raising issues flagged by expert agencies. Secondly, the
bill changed rules under which an appeal could be taken.
The public would have no opportunity of stopping a
lease/sale similar to sale 78.
DORN HAWXHURST, commercial fisherman, Cordova District
Fishermen United, testified from Cordova in opposition to SB
308. She said that experience from Sale 79 caused concern.
She said the Department of Natural Resources failed to
quantify, analyze or look at the sockeye fishery, and even
failed to mention that commercial fishing occurred in the
area at all. Old data had been used even though more recent
data was available from Alaska Department of Fish & Game and
the Forest Service. Hazards of oil transport in the Gulf of
Alaska, or the effects of the sale on communities of Yakutat
and Cordova had not been addressed. She was discouraged by
the fact that the PBIS for lease sale 78 was practically
copied verbatim for lease sale 79. She said that CSSB
308(FIN) removed the opportunity for the public to give
meaningful input to a lease sale.
ALICE RUBY, chair person of the CRSA Board, Bristol Bay,
council member for the City of Dillingham, an alternate
representative for the Alaska Coastal Policy Council in
Dillingham, and former Land Manager for Dillingham and two
other communities, said she had an appreciation for land
management and development issues. She read from a briefing
paper from local representatives of coastal districts,
municipalities, and coastal resource service areas who had
been reviewing SB 308. She listed the communities and other
organizations that had been meeting with DNR to address SB
308. The three main questions addressed were: what was the
appropriate scope of review under Title 38 for best interest
findings; what form of projects phasing, if any, should be
considered under Title 38 for all best interest findings;
and what form of project phasing, if any, should be
considered under Title 46. She recommended that the
legislature or any working groups should not proceed with
any phasing language without a broad-based working group to
resolve the major problems the present language in SB 308
presented. She also noted that there had not been enough
time to review the new version of SB 308 and supported
holding the bill in committee. In answer to Co-chair
Pearce, Ms. Ruby said the position paper had been faxed to
the committee.
BETTY GLICK, Kenai Peninsula Borough, testified from Kenai
in opposition to SB 308. She felt the bill appeared to
prevent the public and local communities from participating
in and commenting on potential development within the
municipality's boundaries. During the lease sale 78, there
was not enough time and information for public comment. She
suggested that each new development area be viewed within
the big picture as well as the smaller area of impact.
WAYNE COLEMAN, member of the executive committee for Prince
William Sound Regional Systems Advisory Council (RCAC),
testified from Kenai in support of language by the Coastal
Districts and the oil industry to limit the language of SB
308 to the title 38 best interests findings scope of review
and convene a broad based working group to address the issue
of phasing for all projects. RCAC also urged, that before
SB 308 was finalized, the legal, physical and definitional
questions raised in earlier hearings were answered, and that
local governments, industry and public citizens, had an
adequate opportunity to review the information presented in
version "U".
CHUCK DEGNAN, Coastal District Director for Coastal Resource
Service Area, testified from Unalakleet, in opposition to SB
308. His main objection was the concentration of
administrative power at the Director level, and the
elimination of meaningful public participation through
administrative procedures.
BRAD PENN, Marathon Oil Co., testified from Anchorage in
support of CSSB 308(FIN) version "U". He felt the Director
should be able to limit the review without being arbitrary.
He read the definition of projects as related to phasing.
JOHN ISAACS, Jon Isaacs & Assoc., testified from Anchorage,
and said he had been a participant in the working group
meetings. He was in support of holding SB 308 in committee
for further hearings. He referenced the Coastal Position
Paper. There were three points he wanted to emphasize. One
amendment removed DNR's requirement to respond with
substantive response to public comments. Co-chair Pearce
called his attention to the errata and he moved on to his
next concern. He felt all the best interest findings were
not suitable to phasing. Also, he felt the phasing coastal
consistency determination did not lend itself to a simple
fix. There did not seem to be any guarantee that the
state's decision to phase a project could be appealed or
elevated. He said language contained in Title 38 was not
found in Title 46. He gave examples of inappropriate
projects that went to phasing and that had created problems
such as the Valdez Princess Star project and the Deep Sea
Processing proposal. A broader task force had been
requested because of such projects. He did note and
appreciate that some suggestions had been incorporated into
the CSSB 308.
Mr. Isaacs stated that Linda Freed, Planning Director for
Kodiak Island Borough, asked that SB 308 would be HELD in
committee. She was unable to testify today but planned to
be in Juneau next week.
MICHAEL WALLERI, General Counsel for Tanana Chiefs
Conference, testified in person. He said that providing
timely and meaningful notice was an important part of the
public process and appreciated its articulation in the
legislation. He felt it was especially important in
resource disposal issues.
End SFC-93 #61, Side 2
Begin SFC-93 #63, Side 1
Mr. Walleri noted that rural Alaska had a difficult time
getting meaningful notice within 30 days. If an agency sent
out a notice, it could take at least two weeks to reach a
village. He proposed an amendment that would change 30 to
60 days. The second recommendation he made was under notice
of consideration that would change 20 to 30 days which was a
more acceptable time of response.
SENATOR SHARP asked if his suggested amendments were
adopted, would Mr. Walleri support CSSB 308(FIN). Mr.
Walleri said that SB 308 was not the type of legislation his
organization could support. He felt that the phasing for
oil and gas was unique to that industry and recommended that
oil and gas be dealt with separately.
PAUL FUHS, Commissioner, Department of Commerce & Economic
Development, said that SB 308 was one of the most important
pieces of legislation before the legislature. He felt it
was a common sense way to deal with the legal difficulties
surrounding oil and gas and other resource industries. The
court stated that the law had not been given clear enough
directions so it had to take the broadest and most
speculative view on resource development. He said asking a
company to come up with every speculative use and potential
alternative option in a project was a problem and restricted
development. He felt this legislation would give the public
adequate review and would keep certain environmental
organizations from shutting down development completely.
Mr. Fuhs contested the comment that the ACMP process was a
cooperative one. He said the way the laws were set up
problems could not be mediated because it was a quasi-
judicial review panel. SB 238 proposed to address this
situation. For two and half years, a land use issue had
continued and now the case had gone to court. He supported
this legislation because it gave clear direction.
Senator Sharp reiterated the need for positive direction to
the court and adequate public process, and hoped that SB 308
would provide that.
FRAN BENNIS, Alaska Marine Conservation Council, consisting
of commercial, sport and subsistence fishermen, and coastal
residents, testified from Anchorage and requested that SB
308 would be held in committee. She felt it gave too broad
of discretionary powers to DNR administrators and made it
difficult for the public to give meaningful review
especially in rural areas.
SUE FLENSBURG, Bristol Bay Coastal Resource Service Area,
testified from Dillingham. She asked that the Coastal
District Briefing Paper sent to the committee be included as
part of the record (see Attachment A, copy on file in the
committee minute book). She testified in opposition to CSSB
308(FIN) and said she preferred a good clean process.
WALT FURNACE, General Manager, Alaska Support Industry
Alliance, Anchorage, testified from Anchorage in support of
CSSB 308(FIN). He felt the CS provided for the public
hearing process, and gave DNR authority to assert its
leadership in controlling the oil and gas programs. He
urged the passage of CSSB 308(FIN).
STEVEN PORTER, ARCO Alaska, testified from Anchorage in
support of CSSB 308(FIN). He felt it encouraged public
comment.
THEO MATTHEWS, United Cook Inlet Drift Assoc. and United
Fishermen of Alaska as a member of the Habitat Committee,
testified from Kenai opposing SB 308. He had just received
the bill but Section 8 and 10 were still not acceptable. He
referred to written comments provided to the committee.
Whenever phasing was done without considering future
development, problems would arise. He asked how a best
interest findings could be done if in Section 4, DNR would
not even have to speculate about economic feasibility of
ultimate development. He said that his other concerns would
be provided in writing to the committee.
LOREN FLAGG, Kenai Peninsula Fishermen's Association,
testified from Kenai opposing CSSB 308(FIN). He said the
bill was an overreaction by DNR to the problems in the
courts. He was especially opposed to phasing and felt
concerns should be addressed at the lease/sale stage. He
blamed DNR and not the laws and regulations. He felt DNR
had done an inadequate job in evaluating concerns of the
people in the lease/sale areas, including transportation and
commercial fishing issues. He asked that CSSB 308(FIN) be
held in committee.
NANCY LORD, commercial fishermen in Cook Inlet and public
citizen, testified from Homer opposing CSSB 308(FIN). She
wanted to remind the committee that there were competing
interests in the coastal regions of the state and all those
interests needed to be able to provide input into any
decisions made by DNR. She said that in Kenai there was a
great marine interest and tourism industry. Commercial
fishermen were not opposed to all oil and gas leasing but
there were places where the two industries conflicted. She
cited a recent spill in the inlet that was not cleaned up
and had been carried downstream by strong tides as an
example. She encouraged the committee to reconsider the
phasing process. Finally, she supported including Senator
Little's language in SB 308 but gave it little weight
towards public involvement. She asked SB 308 be set aside
and asked for support of Senator Little's bill, SB 324.
Co-chair Pearce said that would conclude the public
testimony for SB 308 and closed the teleconference portion
of the meeting.
A Recess was taken at this time.
CS FOR SENATE BILL NO. 203(CRA):
An Act relating to police protection service areas in
unified municipalities; and to police protection
provided by the state in certain municipal areas.
Co-chair Pearce announced that SB 203 was before the
committee.
Senator Rieger spoke to the history that led to the
introduction of SB 203. He said in the 1970s, Anchorage
areas were combined into a municipality with a charter.
There was some mistrust that had formed in this situation.
Senator Kerttula offered information regarding fist and
second class boroughs and how the options for services had
been handled.
Senator Rieger agreed that was a fair assessment. He went
on to say that there were some areas that had limited
services. One of the services that had been become a real
issue was police protection. Because of the nature or cost
of the service, south Anchorage had voted against police
coverage. Because of that issue, it was perceived that
south Anchorage was unwilling to pay for police protection.
However, 90 percent of the residents surveyed had said they
were willing to pay and gave their preference for troopers.
He said that SB 203 would allow the residents of south
Anchorage to vote to pay for police protection.
Discussion was had by Senators Kelly, Rieger and Kerttula
regarding the situation. Senator Kelly maintained that the
bill should mandate that south Anchorage pay for police
protection. Senator Rieger disagreed that south Anchorage
would refuse to pay. He stated that the Anchorage Police
Department was more costly than the troopers.
Co-chair Pearce announced that the meeting would include
testimony from Anchorage via teleconference.
DAN MOORE, represented the Mayor's office of Anchorage and
said that Kevin O'Leary, Police Chief and Duane Udman were
also present. He said the Mayor and the police department
of Anchorage strongly opposed SB 203. The Mayor felt the
bill was bad law and would put both the police department
and the Alaska State troopers in a bad position for
providing service to the Hillside area. Instead, this
community should be given a local option of having police
service mandated area wide. Currently, there was one
service area that provided police service to all the 20,000
residents of Anchorage.
End SFC-93 #63, Side 1
Begin SFC-93 #63, Side 2
Mr. Moore felt SB 203 was the wrong approach and not an
effective or equitable means of providing police service.
He felt that statutory language should be created to give
the local governing body the option of requiring police
service to be paid by all Anchorage residents.
In answer to Senator Kerttula, Mr. Moore said that Rabbit
Creek would be part of the area that would be asked to pay
for police protection.
RICHARD WEINIG, trial attorney, testified from Anchorage in
support of SB 203. He said the issue was statewide need
versus municipal greed. He noted the letter from the City
of Sitka that said SB 203 would require uniformed police
protection throughout Sitka. He said that he paid for
police protection each time he paid for groceries or other
services. In answer to Senator Kelly's statement that there
was no sales tax in Anchorage, he reiterated that increased
prices paid for real estate property taxes. Co-chair
Pearce, as a rebuttal to his statement that those areas in
Anchorage had voted against paying for police protection,
asked Mr. Weinig if he thought it would be a good idea if
citizens would be able to vote on not paying for property
taxes.
Co-chair Pearce agreed with Senator Kerttula that Police
Chief O'Leary was well respected and had a good reputation.
Senator Kelly requested a statement from the Department of
Public Safety. Co-chair Pearce invited C.E. Swackhammer to
the table.
C.E. SWACKHAMMER, Deputy Commissioner, Department of Public
Safety, testified in opposition to SB 203. He said the
department was opposed to paying for State Troopers within
an incorporated municipality that had police powers.
Senator Kerttula said he respected Mr. Swackhammer's
comments. He asked if services would be duplicated if SB
203 would pass. Mr. Swackhammer said the department would
continue trooper services in Girdwood and state highway
patrols and did not foresee reducing trooper services in
that area depending upon budget funding.
Senator Rieger stated that SB 203 would provide more
resources to the troopers' budget. Senator Kelly reminded
the committee that the funds would go directly into the
general fund. Senator Rieger agreed that all program
receipts went into the general fund and it was up to the
legislature to direct those funds.
Senator Kelly said he was going to ask the municipality of
Anchorage which bill they preferred, the CS for SB 203 or no
bill at all.
DAN MORGAN, spoke on behalf of the Mayor, via teleconference
from Anchorage, that they preferred no bill at all. Senator
Kelly asked that the bill be held in committee.
Co-chair Pearce, in response to the narrator in Anchorage,
said that there was not enough time to hear several others
that were present to testify.
Co-chair Pearce announced that SB 203 would HELD in
committee.
SENATE BILL NO. 368:
An Act relating to the human services community
matching grant program; and providing for an effective
date.
Co-chair Pearce announced that SB 368 was before the
committee.
Senator Sharp said that in 1992, a statutory basis was
established for the Human Services Community Matching Grant
Program. This program required an increasing match rate
over the next three years from 1992 forward. It was to
begin in FY94 with a 10 percent match rate and increased
each fiscal year with the maximum 50 percent match starting
in FY96 and continuing at that level for the life of the
program as funded.
He went on to say that SB 368 would reduce the maximum match
rate from 50 percent to 30 percent for the future. This
would bring the Human Services Community Matching Grant
program in line with other programs that require matching
funds such as the Capital Matching Grant Program and others
that require a match. Non-profit human services
organizations would benefit in the long run because the
reduced local match rate would help insure the
municipalities continued participation in the program. With
the ongoing reduction in state and municipal assistance
revenue sharing and resulting cost shifting to local
governments, he thought it was important to encourage the
two largest urban areas to continue providing more human
services at the local level. He felt it would facilitate
the continuation of the human service grants being used to
service the needs of those two areas.
In answer to Co-chair Pearce, Senator Sharp said SB 368 did
not address the decision by the department to reduce the
amount of money to Anchorage and increase the amount to
Fairbanks. He said that it was required to be split by a
per capita basis and did not know what had decided
allocation amounts.
Senator Rieger MOVED for passage of SB 368 from committee
with individual recommendations. No objection being heard,
it was REPORTED OUT of committee with a "do pass," and a
zero fiscal note for the Department of Health & Social
Services. Co-chairs Pearce and Frank, Senators Rieger and
Sharp signed "do pass." Senator Kerttula signed "no
recommendation."
ADJOURNMENT
The meeting was adjourned at approximately 11:00 a.m.
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