03/22/1994 09:07 AM Senate FIN

                                                                               
  SENATE BILL NO. 308                                                          
                                                                               
       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                 
       land, property,  and  resources, and  to the  interests                 
       within them, that are subject to the coastal management                 
       program; and providing for an effective date.                           
                                                                               
  Upon reconvening the meeting, Co-chair Pearce announced that                 
  discussion   of   SB  308   would   constitute  subcommittee                 
  deliberation  on the  bill.   She  explained  that it  would                 
  provide  the  Dept.  of  Law an  opportunity  to  advise  of                 
  background  information  on  lawsuits  that  encouraged  the                 
  department to introduce  the legislation.  Further,  a group                 
  meeting in Anchorage has worked through discussion on two of                 
                                                                               
                                                                               
  three major portions  of the bill.   The  group has not  yet                 
  considered changes  to  Title 46.   Subsequent  subcommittee                 
  meetings will be had with working group members as suggested                 
  language  is developed  for  presentation to  committee next                 
  week.     Co-chair   Pearce   directed   attention  to   new                 
  correspondence  from various  interests which she  noted had                 
  been copied and placed in members' files.                                    
                                                                               
  End:      SFC-94, #34, Side 2                                                
  Begin:    SFC-94, #36, Side 1                                                
                                                                               
                                                                               
  KYLE PARKER, Office  of the Governor, came  before committee                 
  and  read  from   a  prepared   text  providing   background                 
  information and  a summary  of resource disposal  litigation                 
  (Mr. Parker's comments were subsequently incorporated within                 
  a memo  dated March 28,  1994, (copy appended  as Attachment                 
  D).  He explained that  the court decision in the Good  News                 
  Bay sale evidences that, absent some legislative action, the                 
  courts are driving the state  toward a federal environmental                 
  impact process.                                                              
                                                                               
  BARBARA FULLMER,  Legal Counsel,  Division of  Oil and  Gas,                 
  Dept. of  Natural Resources,  next spoke  via teleconference                 
  from  Anchorage.    She outlined  the  basics  of litigation                 
  relating to Sale 78, advising that  one day after the appeal                 
  period, the sale was appealed by a group including fishermen                 
  organizations, a local traditional council, and Trustees for                 
  Alaska.    The points  on  appeal  were quite  broad.   They                 
  claimed that the division of oil  and gas had not adequately                 
  considered the pros and  cons of the lease sale.   The state                 
  moved  for  a  more specific  accounting  of  the  points on                 
  appeal.    The  court  denied that  motion.    Court  action                 
  indicates  that  the court  is  willing to  accept anything.                 
  There was no requirement that  appellants identify what they                 
  are  appealing  or  that conjecture  appear  earlier  in the                 
  record.  Two weeks prior to the sale, appellants moved for a                 
  stay.    The court  granted that  motion,  based not  on the                 
  points  of  appeal  but  upon   apparent  court  perusal  of                 
  regulations  under  ACMP and  selection  of an  argument not                 
  raised  by  appellants.   Oral arguments  are  to be  had in                 
  September.  That time frame is after the point when the sale                 
  could properly go  forward without having to  again commence                 
  the administrative process from the beginning.                               
                                                                               
  Senator  Rieger   inquired  concerning   the  position   the                 
  administration seeks  to assert  through the  proposed bill.                 
  Barbara Fullmer explained  that the administration  hopes to                 
  ensure that the scope of review  is molded by public comment                 
  received by the  department.  It is not the  intent to limit                 
  what  the  public comments  on.   The  scope of  review must                 
  address  any  public  comments received  during  the  public                 
  comment  period.   The  cutoff point  is the  materiality of                 
  facts  and  issues raised  or known  to  the director.   The                 
                                                                               
                                                                               
  director must find that  the fact or issue is  material, and                 
  that finding must rest on the record.  Senator Rieger voiced                 
  his understanding that public comment would occur prior to a                 
  determination by the director concerning  to what extent the                 
  administrative review is limited.  He further advised of his                 
  understanding that  problems arise  when a  second round  of                 
  public  comment  is  allowed  at  the   court  level.    The                 
  department then becomes trapped when it is alleged  that the                 
  department  did not consider  something that,  in actuality,                 
  was never brought up.                                                        
                                                                               
  SENATOR SALO  commented upon difficulties associated  with a                 
  subjective  decision as  to whether something  is or  is not                 
  material.    She  then asked  if  pending  legislation would                 
  impact Sale 78.   Mr. Parker explained that, if  enacted, SB
  (Oil  and Gas  Lease Sales:  Schedule and  Delay) would                 
  allow the department to proceed with the sale as soon as the                 
  stay is lifted.   Mr.  Parker acknowledged that  he did  not                 
  know  when  that might  occur.   He  further noted  that the                 
  department has been in court, in some instances, up to seven                 
  years.                                                                       
                                                                               
  Senator Salo  next  inquired about  a  potential  settlement                 
  involving  removal  of  key  fishing  tracts.    JIM  EASON,                 
  Director,  Division  of  Oil  and   Gas,  Dept.  of  Natural                 
  Resources,  responded from  Anchorage.   He reiterated  that                 
  allegations in Sale 78 are very  broad.  They include claims                 
  that  the  state  failed to  properly  consider  impacts and                 
  effects on "this fishing corridor"  as well as archeological                 
  artifacts, view sheds, etc.  There  is nothing in the record                 
  to indicate  that resolution  of  any one  issue would  have                 
  avoided litigation.  That  is particularly true in light  of                 
  the diversity of interests of  appellants.  Further, to this                 
  date,  no  one has  been able  to specifically  identify the                 
  fishing corridor.                                                            
  In response  to a  further question from  Senator Salo,  Mr.                 
  Eason  acknowledged  an  offer  of  settlement presented  by                 
  Trustees for  Alaska.   Appellants have  requested that  the                 
  offer remain confidential.   The  state rejected the  offer.                 
  The state response is a matter of record.  Mr. Eason advised                 
  of  correspondence  from  Assistant  Attorney  General  Mary                 
  Lundquist rejecting the offer and  setting forth reasons for                 
  rejection.    Mr.  Eason agreed  to  provide  copies of  the                 
  correspondence (Attachment E) to committee.                                  
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:05 a.m.