Legislature(1993 - 1994)
02/28/1994 05:00 PM O&G
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 474 - ADMINISTRATIVE ACTION RELATING TO LAND CHAIRMAN GREEN called the meeting to order at 5:05 p.m. Number 021 CHAIRMAN GREEN asked if there was a motion to adopt the committee substitute for HB 474. Number 022 REPRESENTATIVE JERRY SANDERS made the motion to adopt CSHB 474. There were no objections. Number 037 JIM EASON, DIRECTOR, DIVISION OF OIL & GAS, DEPARTMENT OF NATURAL RESOURCES (DNR), stated the changes suggested in CSHB 474 are intended to be responsive to comments received in the first hearing of HB 474 in the House Oil & Gas Committee, as well as hearings before the Senate Resources Committee on SB 308. He said a great deal of comment was directed toward the standard of "reasonably foreseeable, nonspeculative, direct effect." He said the Division of Oil & Gas, in response to the comments, went to a more familiar standard in dealing with "significant direct effects." He said the "reasonably foreseeable" standard was kept in the committee substitute. He said the intent was to send a message to the courts that the legislature intends that DNR not be held to a standard of having to speculate events that might follow from a lease sale. He said that DNR would like to require that the obligation to make sure that DNR is aware of specific potential problems is on a person, group, or a potential litigant. He referenced the section of HB 474 dealing with AS 38.05.035(g). He said it was intended to clear up confusion about whether or not DNR intended to limit the scope of its analysis and findings, which is already required under AS.38.05.035(g) in the section set out under "(b)." He stated there are factors which are listed under current statute as "(a)" through "(k)." He stated DNR always intended that it would be bound by the obligation to look at those factors and to know them at the time of the lease sale. He said DNR believes it is expanding the public scope to require that it consider other factors that may not be included in the list currently under statute, so long as those factors are material to the decision affecting the lease sale. He stated DNR hopes that the clarification will help to eliminate some of the concern that was expressed about the intent of the provision. He referenced section 46.04.094, and pointed out there had been a title change. He said it is intended to give legislative support to the concept that during the leasing stage, when DNR is looking at the facts, the law, the comments, and the record, it can make a consistency determination based upon the factors without a perfect knowledge of the future. He said this would be possible as long as DNR has conditioned the lease sale to make certain that it has the opportunity to revisit each additional permitting point and to condition proposed projects to ensure they are consistent with the Alaska Coastal Management Program. Number 095 CHAIRMAN GREEN stated for the record that Representative Mike Navarre was at the committee table. Number 098 REPRESENTATIVE GARY DAVIS referenced page four, section two of CSHB 474. He expressed his concern about the word "or" on page four, line 15. He said it appeared that by using the word "or," DNR is intending to follow procedures in "(a)" or "(b)" instead of "(a)" and "(b)." Number 108 MR. EASON stated DNR believed that the use of "and" would require a higher standard of the public. He said the public would have to fit within the requirement of having made known to DNR their concerns under "(a)" as well as having to do with issues under "(b)." He stated DNR believes the use of "or" is actually favorable to public participation because under the provision, DNR will be bound to consider whatever the public says, determine its materialism, and address it in writing, even though under current statute it is not a requirement under the listed factors that DNR has to consider. Number 128 FRANK RYMAN, YAKUTAT BOROUGH ASSEMBLY (via Yakutat), stated he is opposed to HB 474. He said Alaskans and the oil industry should work as partners and minimize the economic problems being faced by dwindling resources. He said HB 474 flies in the face of such philosophies. He said it represents a panic approach to Alaska's economic problems, where commissioners and directors at DNR will begin acting as philosopher-kings, unilaterally cutting the scope of administrative review and the degree to which Alaskan's will be able to participate. He said current statutory language defining administrative best interest findings and the requirements for a written statement was promulgated under direct court review of Moore v. State. He said the law as it currently exists was drafted to be in compliance with specific constitutional language requiring safeguards to the public interest and disposing of public property. He said changing any portion of that language, particularly to the degree of HB 474, would lead to future court action. He said such court action will end in a Alaska Supreme Court review. He said such a review will delay any economic development for months, or even years and cost the people of Alaska dollars that should be directed elsewhere. He said by passing HB 474, the legislature will provide the mechanism whereby the wishes of the people of Alaska will be ignored. Number 226 JON ISAACS (via Anchorage), stated he felt there was no process better than coastal management for bringing everyone to the table to resolve concerns that result in the best possible development, including the best interest findings. He said coastal management gives local government a guarantee that the state and federal governments will treat them as equals and take their position seriously. He stated in the past 12 months, when there has been a need to make changes in the coastal management program, coastal districts, agencies, representatives of the oil industry, and environmental groups have worked together to develop consensus solutions. He said coastal districts recognize the importance of oil and gas sales and other state resources to state and local economies. He said coastal districts agree that the Superior Court decision on Lease Sale 78 has created a problem in the Division of Oil & Gas with regard to best interest findings. He said the primary issues relate to determining a reasonable scope of analysis for a best interest finding, what level of analysis is applied to disposable interest and subsequent phases of development and how it should multi-phased projects be addressed under the coastal consistency determination. He said coastal districts appreciate the attempt of recent amendments, but HB 474, even with proposed amendments is not yet an acceptable solution. He said HB 474 gives broad discretion to Oil and Gas Division directors and reduces the coastal district role of decision making. He said HB 474 sets a more lenient standard for best interest findings compared to similar federal approval. He stated HB 474 defers full project review to later phases of a project under the recommended changes to AS 46.04.094. He requested the committee delay action on HB 474 in order to develop amendments that can best meet the interest of all parties. Number 265 BECKY GAY, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT COUNCIL (via Anchorage), said RDC believes that HB 474 is a step in the right direction. She said RDC has great concerns over the continuing onslaught of judicial response with regard to the problematic state oil and gas lease situation. She said the courts had recently injected a great deal of uncertainty into the future of oil and gas leasing by introducing the notion that production of oil and gas resources are somehow not in the best interest of the state. She said the legislature needs to send a clear signal to the judicial branch that it, along with the administrative branch, considers continued oil and gas leasing to be in the best interest of the state. She said HB 474 will tighten the shortcomings with the present leasing program. She said she applauds the legislative attempt to clarify the future of oil and gas leasing to increase the efficiency of the leasing program. Number 319 STEVEN PORTER, ARCO ALASKA (via Anchorage), said currently AS 38.05.035(g) requires the director to make a written best interest finding prior to disposal of state lands. He said the statutes do not expound the scope of the finding except for oil and gas lease sales, but the legislature has determined the scope of the review should include at least those areas listed under AS 38.05.035(g). He said he saw HB 474 as an opportunity for the legislature to define to the director, to the public and to the court the scope of the review for the disposal of state land. He said because of the continuing controversy surrounding the scope of review, it has become apparent the legislature needs to act in this area to provide some much needed direction. He said in addition to those areas specifically identified by the legislature, the scope of the review should include those areas identified by the director. He said all public comment should be included in the scope of the review. He said the director must seriously consider all public comment and respond in writing to the relevance to the disposal of state land. He said HB 474 is DNR's attempt to reduce to writing, the scope of the review as we have expressed it here today. He said there are members of the public that agree with the concept he expressed, but do not agree with the way DNR expresses the concepts in writing. He recommended those opposed to HB 474 explain their reasoning for their concerns and identify the specific language that gives rise to that concern so those concerns can be more effectively addressed by DNR and the legislature. He recommended the passage of HB 474. Number 369 MIKE O'MEARA (via Homer), stated HB 474 should be done away with. He said HB 474 is a way of reducing the public process and avoiding oversight by the court. He stated the legislature should try to draft a bill that accomplishes some real improvements. He said a frame work needs to be set up whereby extractive industry meets with other interest groups to work out differences before the agency involved proposes the disposal. He said legislation should mandate that concerns expressed from all interests be reflected in the proposal put forth. He said all proposals should be developed and judged in light of their potential combined and cumulative effects. He said all proposals should reflect the potential impact to areas adjacent to the disposal. He said the legislature should encourage participation by coastal districts in all phases of proposed disposals early on. He said the present best interest finding process itself needs to be replaced with an evaluation of proposed disposals by unbiased authority. He said improve all public participation mechanisms. He said it involved early, better, more frequent notification of important deadlines and dates, 90 day review period for all major documents, mandatory scheduling of both preliminary informational meetings and public testimony hearings in areas to be effected or adjacent areas. He urged the committee to let the bill die. Number 452 LARRY SMITH, KACHEMAK RESOURCE INSTITUTE (via Homer), said he has worked for 10 years to set up a coastal district with the Kenai Peninsula. He said while the Kenai Peninsula Borough did not do a perfect job with the review of Lease Sale 78, local government went far beyond the Division of Oil & Gas. He said offshore development in some places is incompatible with economic activities such as fishing and tourism. He said HB 474 fixes problems that he had not heard existed for the Division of Land, the Division of Forestry, the Division of Water, or any other arm of DNR. He said he was not convinced the Division of Oil & Gas has a problem that can be solved by legislation. BEN MILLSTEIN (via Homer), stated he wanted to go on record as agreeing with most of Mr. Smith's testimony and all of Mr. O'Meara's testimony. He said there are a lot of people that rely on state and federal land and when people bring up concerns about various lease sales or applications it is their right to be noted. He stated HB 474 will take less, not more, public consideration into account. Number 550 JIM EVENSON, UNITED FISHERMEN OF ALASKA (via Soldotna), stated HB 474 is bad legislation. He said HB 474 would not have existed if Lease Sale 78 had gone through. He said the idea of DNR recommending that oil activity occur in that area is unthinkable. He said HB 474 is not needed. Number 604 DREW SPARLIN (via Soldotna), stated he recognized the value of oil and the Lease Sale 78 could have gone on if DNR would have been willing to negotiate and withdraw the portions that were in conflict. He said he is not against lease sales. He urged the committee to hold HB 474 to the point that it has studied it and recognized the fact that it is bad legislation. He said it solves none of the problems for which it was intended and it will complicate the opportunity for successful lease sales in the future. Number 649 LOREN FLAGG, KENAI PENINSULA FISHERMENS' ASSOCIATION (via Soldotna), stated there is no problem with the laws and regulations, however there is a major problem with the way DNR conducts their reviews. He said DNR's final finding on Lease Sale 78 was deficient in several areas and that is why it is in trouble with the court. He said DNR failed to adequately address the commercial and recreational fisheries that exist within the lease sale area and the potential impacts to the fisheries. He said the final finding in Lease Sale 78 was totally inaccurate. He asked the committee to hold the bill until the three absent committee members were present at the hearing. TAPE 94-9, SIDE B Number 001 JAMES MYKLAND (via Cordova), stated HB 474 would allow DNR to ignore resource use conflict during the initial review, prior to the disposal of land. He said HB 474 would give the director of Oil & Gas the authority to decide which facts, materials and issues are relevant to the public interest. He said that authority is currently vested in the local communities and removing it from the communities will reduce their ability to manage and plan for the future. He said HB 474 will limit best interest findings to the consideration of the impacts on fish and wildlife only within the lease sale. He stated air and water emissions or oil and hazardous substance spills could affect fish and wildlife, as well as their habitats, outside the lease area but within the coastal zone. He asked why DNR could not competently prepare a best interest finding. He said the public must be provided with all of the relevant concerns before a project begins to ensure that the state proceeds responsibly, with minimal impact on local communities and other resources in the environment. Number 034 RIKI OTT, UNITED FISHERMEN OF ALASKA (UFA) (via Cordova), said UFA opposed HB 474. She said HB 474 was fiscally irresponsible and would favor development regardless of the cost to competing resource users. She said multi-phasing introduces a new element of financial risk because it increases the likelihood of erroneous land disposal. She said UFA does not believe the financial risk should be carried by the state or the public. She emphasized that UFA strongly believes the state should be required to conduct a thorough best interest finding prior to a land disposal. She stated that multi-phased development was not in the state's best interest. She said because HB 474 institutionalized multi-phased development, it did not protect the public interest. She said Mr. Eason had misrepresented the impact of HB 474 to the public. She said HB 474 would take away full public input at the beginning of the lease sale or land disposal process. She said at the lease sale state, DNR functions as a public agency and it controls the conflict resolution process with minimal bias, because it does not have a vested interest in the product at that point. She stated after the land is disposed, the state and the lessee work closely together. She said there are contractual obligations and financial investments to which the public is not privy. She said during the later public comment period the public is fighting an uphill battle against both the lessee and the state, which at that point is a vested partner. She said public input at later project stages does not carry the same weight as at the initial review stage. She said Mr. Eason had misrepresented the ramifications of HB 474 to the state and to the public and that it was a serious breach of public trust. She said HB 474 would be a radical shift in public policy. She said it was important to realize that HB 474 would slow, rather than speed, development because it would increase the number of lawsuits over issues such as constitutionality, conforming with the Coastal Zone Management Act, just compensation to l, and potential state liability for buy backs. Number 089 MARILYN CROCKETT, ALASKA OIL & GAS ASSOCIATION (AOGA) (via Anchorage), stated AOGA supports a full analysis of all issues and concerns for the best interest finding process for each lease sale. She said AOGA believes that current statutes and regulations were designed for the full analysis. She said AOGA is concerned by the uncertainty created by the recent court rulings. She said DNR's scope of review should be defined during the administrative review process, not by the courts. She said the only question is how to define that scope of review. She said AOGA believes the scope of review for best interest findings for oil and gas lease sales should cover the following points. The director of Oil & Gas should determine those issues which should be addressed during the review. All public comment should be considered in determining what the scope of the review should be. The legislature has determined that those items listed in AS 38.05.035(g) should be part of the scope of review. She said if the director of Oil & Gas, the public, and the legislature do not consider an issue to be of sufficient concern, then the courts should not be allowed to rule that the issue must be covered in the best interest findings. She said AOGA believes the intent of HB 474 is directed at providing certainty in the scope of the review. Number 113 PAUL MAYS, ALASKA WILDERNESS RECREATION & TOURISM ASSOCIATION, (AWRTA) (via Valdez), said AWRTA believed that HB 474 would increase unemployment and litigation costs by giving priority to Alaska's expansive timber, mining, oil, and gas industry. He said the priority was at the expense of the tourism industry, which is also based on Alaska's natural resources. He asked the committee not to support HB 474. Number 171 KARL KIRCHER (via Soldotna), stated he did not see any difference between HB 474 and CSHB 474. He said many coastal communities in Alaska depend on good cooperation between fisheries and oil development in order for both industries to prosper. He said HB 474 would destroy fishermens' belief that they have a viable input when new oil and gas leases are offered and subsequent development moves into coastal areas. He said as he understood HB 474, it was not reasonably foreseeable that a lease sale would end in oil and gas development. He felt that before oil and gas lease sales are issued, the problems that might develop or the concerns that both parties have with the final dispositions should be put on the table. He felt that HB 474 would destroy any good faith cooperation that Alaskans presently strive for in multiple use coastal zone areas. He requested the committee to hold HB 474 until the three absent committee members were present. Number 204 JOSEPH JOLLY, UNITED COOK INLET DRIFT ASSOCIATION (via Soldotna), stated HB 474 was a blatant attempt to circumvent safeguards that are put in place by responsible representatives elected by the people of the state of Alaska. He said HB 474 makes a mockery of the Costal Zone Management Plans that are put in place by the local populations. THEO MATTHEWS, UNITED COOK INLET DRIFT ASSOCIATION (UCIDA), stated UCIDA opposes HB 474. He said he was encouraged by the comments from AOGA. He said the State should not have to speculate out to the ends of the earth, but that point was not the driving force of HB 474. He referenced page two, lines 24 through 27 of CSHB 474. He said HB 474 will not permit DNR to consider the most nonspeculative of issues down the road. He referenced Section three of CSHB 474. He referenced Lease Sale 78 and said the people in Cook Inlet made it very clear that a stationary production platform in certain waters in Cook Inlet were totally incompatible with the existing use due to physical and safety conflicts. He said the public and every possible forum let DNR know that there were conflicts. Number 331 LOISANN REEDER, SUSITNA VALLEY ASSOCIATION (via Anchorage), referenced Sections one and three of CSHB 474. She stated her concerns were how the sections related to timber sales. She said the scope of the best interest determinations for timber sales is already mandated in AS 38.05.112. She said since AS 38.05.112 provides a more explicit direction for timber sales, it would likely take precedent over the suggested amendments to AS 38.05.035(g) contained in HB 474. She said having conflicting guidelines in two separate sections of Title 38 could only result in undue confusion and other legal challenges. She encouraged the committee to exempt timber sales from Sections one and three of CSHB 474. Number 359 JEFF PARKER, ALASKA SPORTSFISHING ASSOCIATION (ASA) (via Anchorage), stated ASA was opposed to HB 474. He said ASA interests were primarily focused on the best interest determinations made under AS 38.05.035(e) with respect to oil and gas, as well as land disposals and timber sales. He said ASA views HB 474 as unnecessarily narrow in the scope of review. He said HB 474 does not specify criteria, but instead allows wide open discretion to the director of Oil & Gas through the language that limits the scope of review to the facts and issues the director finds material. He said HB 474 eliminates the cumulative impact inquiry that is necessary in multi-phased land dispositions. He said HB 474 arose out of a series of lawsuits involving oil and gas lease sales. He said in all of the cases, the courts found DNR out of compliance with the existing statute. He believed DNR violated the statute three times and was now approaching the legislature for a statutory waiver of what the legislature previously directed as a necessary requirement. Number 416 CLIFF EAMES, ALASKA CENTER FOR THE ENVIRONMENT (ACE) (via Anchorage), stated ACE opposed HB 474. He emphasized that ACE was concerned not only with oil and gas leases sales, but also with timber sales and land disposals. He said ACE did not believe the scope of the administrative review should be narrowed. He said ACE did not think it was unreasonable for a decision maker to be asked to look at the specific facts that are presented by a specific proposal and to use reasonable standards to determine what factors need to be analyzed. He said indirect and direct effects should be analyzed. He said it was not uncommon for indirect effects to be of greater concern to the public than direct effects. He said phase analysis was a bad idea. He said once permission to enter into one phase of development is granted, and a substantial investment of time and money is invested, there is no going back. Number 503 MR. EASON said it was a drastic and dramatic mistake to view HB 474 as an overreaction to Lease Sale 78. He said HB 474 is a measured reaction to a series of decisions that began in 1987 and continued with two Alaska Supreme Court decisions on Lease Sale 50 and Lease Sale 55, and finally with the stay on Lease Sale 78. He said Lease Sale 78 was an instance in which the court turned its back on more than 30 years of compatible development in the fishing corridor with no conflicts. He said the court subsequently decided there would be a conflict and then it used that conflict as a basis for determining the sale should not proceed. He said the words of the litigants would provide the committee with the best indication of the dilemma that Mr. Eason has found himself in when trying to address the concerns people have about leasing under current statutes. He referenced Lease Sale 57 and Trustees for Alaska's lawsuit against the state. He stated the litigants said "...DNR failed to adequately analyze the impacts of the sale on riparian resources, failed to analyze the impacts of the sale on archaeological resources, and failed to analyze the impacts of the sale on the Gates of the Arctic National Park and Preserve." He said concurrently Trustees for Alaska filed litigation regarding Lease Sale 75a. He said Trustees' claim was that "...DNR failed to adequately analyze the impacts of the sale on wetland habitat and riparian areas, failed to adequately analyze the impacts of the sale on archaeological resources, and violated the Alaska Historical Preservation Act with respect to the documented historical and archaeological sites within the area." He said Trustees then "...reserved the right with the court to amend the Statement of Points on Appeal after the completion of a review of the administrative record." Mr. Eason stated both of the lawsuits were filed after Trustees for Alaska did not participate in the administrative appeal. He said there were no comments submitted to DNR from Trustees for Alaska during either the preliminary or the final best interest finding. He said after the period for those findings closed, DNR was faced with the litigation. He said he did not know how anyone could respond to such a situation. He said the court has clearly illustrated that it will accept a lawsuit regardless of how vague it is. He said the Alaska Supreme Court has confirmed time and again that it will act to overturn the Superior Court, who has found in DNR's favor, in every instance. He said in DNR's best judgment, there is a problem which has led to a situation where there will be no more lease sales in Alaska until there is greater guidance and clarification of the standards that the legislature wants DNR to meet. He said DNR cannot meet open ended, totally speculative standards. Number 672 CHAIRMAN GREEN stated there were a few comments expressing concern that by changing the existing statutes, the state may be violating some legislative requirements. He asked if there was anything in HB 474 that would cause less of a review of the impacts or violate any of the legislative requirements. Number 686 KYLE PARKER, ASSISTANT ATTORNEY GENERAL, stated the state did not view HB 474 as limiting the review that will be conducted. He said the state believed that HB 474 would broaden the review. He said AS 38.05.035(g) specifically lists the issues which must be considered in a best interest finding. He said there is no provision for the director of Oil & Gas or the DNR commissioner to broaden the review that will be conducted. He said HB 474 will allow the DNR commissioner to consider the comments put forward by the public during the public review of the project. He said the DNR commissioner can consider the comments and determine whether any of them are material to his decision. He stated the DNR commissioner can then broaden his review to include those issues which may be raised during public comment. Number 710 REPRESENTATIVE DAVIS said AS 38.05.035(g) does add opportunity to respond to public comment. TAPE 94-10, SIDE A Number 002 REPRESENTATIVE DAVIS said he was concerned by the provision in HB 474 that states the public must review or make comment on specific issues only if they pertain solely to a discreet issue or the lease phase of a multi-phased project. Number 009 MR. EASON said the state views the standard of "may," as being one that allows the director of Oil & Gas to limit, but does not prohibit the director from not limiting. He said the alternative would be to use terms such as "shall" or "must" and those terms would clearly restrict and make impossible the consideration of things such as indirect effects. He said there is no prohibition that indirect effects cannot be thought of, cannot be discussed, cannot be actualized. He said there is correspondingly, no mandate that they must be thought about, discussed, or actualized. He said the range of potential indirect effects is simply unpredictable. He said if people want to discuss indirect effects, or their view of what might be indirect effects, there is nothing that would require the director of Oil & Gas not consider those or determine they are material to a decision under the amendments. Number 022 REPRESENTATIVE DAVIS confirmed that one can only address the concerns that pertain solely to the discreet phase of a project. He asked for clarification or interpretation as to how the process does not limit public comment. Number 031 MR. EASON referred to the Lease Sale 78 decision. He said the courts wanted the state to provide some certainty as to the outcome of future events in order to proceed beyond the leasing stage. He said the only practical way for that system to work is that the state identify during the administrative process, either through its own knowledge or through knowledge made available by the public and other agencies, all of the issues and concerns that people have about things that might happen in the future from leasing. He said if there are provisions to further condition an actual permit that may follow from the lease, the record should reflect the issues that will be of concern. He stated in the absence of specific information as to where something may occur, one can really only make provision for some certainty that nothing will be allowed to occur until the conflicts are identified and all the public comments that need to be addressed to that potential development are reviewed and the process is allowed to work its way through. Number 057 BARBARA FULLMER, ASSISTANT ATTORNEY GENERAL (via Anchorage), stated the concept of phasing is already recognized within the Alaska Coastal Zone Management Plan (ACMP) regulations. She referenced 6 AAC 50.190, number 14, which defines projects under the ACMP. She said the definition of projects includes land or water activity developed or authorized in discreet phases. She stated each phase requires agency decisions regarding permits and each phase is considered a project and therefore would be considered individually. Number 073 MR. EASON referenced Lease Sale 50. He said the courts determined the state had not properly considered the geophysical hazards in the Camden Bay area. He explained the state had addressed the only known map of the geophysical hazards that are in the offshore Camden Bay area. He said there was one map in the public record that was produced by the U.S. Geological Survey (USGS). He said the state was aware that the area was seismically unstable and the state had reason to believe there were other geophysical hazards that would be of concern to the state when a permit was requested. He said the state took the approach that before a permit could be issued, a site-specific survey would be done to determine the very localized and specific sea floor conditions. He said the state believed this was a common sense approach. He said it was argued by the litigants that the state had to do geophysical surveys to determine the location of all potential hazards before the state could offer a lease. He said the cost for site-specific surveys is in the hundreds of millions of dollars. He said because of the great cost, it only makes sense to conduct the surveys when one knows that one wants to go somewhere very specific and wants to find out whether it can or cannot be done. He said the state simply cannot operate under those conditions. Number 118 REPRESENTATIVE DAVIS referenced page two, line 27 of CSHB 474. He stated he thought concerns should be addressed at the leasing stage, not the permitting stage. MR. EASON stated at the leasing stage, there is not enough information to do a specific tract by tract analysis to determine what local conditions exist. He said the Alaska Department of Fish & Game cannot provide that kind of detailed information on fisheries and game resources at that point. He said once an area has been leased, and the state is made aware that someone wants to drill it, that triggers a very detailed analysis and separate consistency determinations under state law that involve state agencies. He said in the case of offshore sales, federal agencies are involved as well. He said those kinds of concerns are brought to the table at that point and they have to be addressed in order to make the project consistent. He said that meant gathering the fact-specific information and tailoring the project to be sure the state avoids problems. Number 148 REPRESENTATIVE DAVIS confirmed that concerns would not be addressed during the lease phase. Number 149 MR. EASON indicated that was correct. Number 150 REPRESENTATIVE DAVIS said if there is a tract of land and a river traverses it, it is obvious there will be known impacts should a lessee agree to lease that tract. He confirmed that Mr. Eason was indicating the state did not need to put the findings under the lease phase. Number 156 MR. EASON responded in the negative. He said impacts of that nature are identified at the lease sale stage. He said currently the finding for every sale includes a list of mitigating measures and terms that will apply to any of the leases. He stated there are a number of measures and terms that are identified at the leasing stage in the finding, but it is the ones that are not so clear, that are not indisputable, that are simply unknown in a lot of cases that the state cannot identify at that stage. Number 168 REPRESENTATIVE DAVIS stated he thought that everyone agreed with Mr. Eason's point. He said the public does not expect the state to respond to unforeseen or unreasonable conditions. He stated there are obvious concerns. He said the public feels they will be left out and Mr. Eason says that public input will be increased. He asked if there was some point of reference in HB 474 that would assure him the bill is on the right track with respect to public input. Number 185 MS. FULLMER (via Anchorage) clarified that Representative Davis was discussing the identification of foreseeable issues. Number 189 REPRESENTATIVE DAVIS stated he was not sure. He said he was referring to what the public said. He indicated that he wanted to refer to the section of HB 474 that would assure him the public is not being left out of the process. Number 194 MS. FULLMER (via Anchorage) said she was wondering why the public felt left out. She said initially she understood the concerns were that people thought the scope would be determined before any public comment was received. She said that is not the intent of HB 474. She said the written findings come after the public comment period. She referred to the comments regarding mitigation measures and referred to page two, lines 30 and 31. She said until she had some specific cite as to why people think they are being limited in their comments she could not answer that. She said the public comment period has not been changed. Number 214 REPRESENTATIVE DAVIS said he was also hoping to get some specifics from the testimony as to exactly what parts of the bill they found objectionable. Number 218 CHAIRMAN GREEN asked for the wish of the committee. Number 232 REPRESENTATIVE SANDERS made a motion to move CSHB 474 with individual recommendations and a zero fiscal note. Number 242 REPRESENTATIVE KOTT objected to the motion for the purpose of clarifying whether or not the legislature has addressed the proposed amendment by Representative Olberg. Number 251 CHAIRMAN GREEN said he had received Representative Olberg's amendments and it was indicated to him they may have legal problems. He asked for an attorney's opinion. Number 257 MR. EASON stated he was not sure if Ms. Fullmer and Ms. Lundquist had seen Representative Olberg's amendments. He noted the amendments were not in amendment form, they were addressed as conceptual amendments. He indicated that he was not sure if the state could truly give the committee an opinion without some specific amendment language. Number 270 REPRESENTATIVE DAVIS stated he recognized that Representative Olberg's amendments were not in proper amendment. He confirmed that Representative Olberg would have the opportunity to submit amendments at a later date in another committee. Number 292 REPRESENTATIVE KOTT stated he was bringing the amendments to the committee's attention out of respect to Representative Olberg. He withdrew his objection to the motion. Number 303 REPRESENTATIVE KOTT stated he thought the Chairman had made a good point that the committee has had a significant amount of difficulty in getting a quorum at committee time. He said to hold HB 474 in the Oil & Gas Committee would perhaps not do it justice. He said if HB 474 needs additional tampering, the Oil & Gas Committee should let the standing committees do it. Number 312 CHAIRMAN GREEN stated HB 474 was moved to the House Resources Committee with individual recommendations. He adjourned the meeting at 6:57 p.m.