Legislature(2009 - 2010)BELTZ 211

02/05/2009 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 3 CFEC AS INFORMATION RESOURCE TELECONFERENCED
Moved SB 3 Out of Committee
*+ SB 4 COASTAL MANAGEMENT PROGRAM TELECONFERENCED
Moved CSSB 4(CRA) Out of Committee
Bills Previously Heard/Scheduled
= SB 19 COMPLAINTS AGAINST PEACE OFFICERS/VPSOS
Moved CSSB 19(CRA) Out of Committee
               SB   4-COASTAL MANAGEMENT PROGRAM                                                                            
                                                                                                                                
3:47:21 PM                                                                                                                    
CHAIR OLSON announced  the consideration of SB 4 and  asked for a                                                               
motion to adopt the committee substitute (CS).                                                                                  
                                                                                                                                
SENATOR THOMAS  moved to adopt  work draft CS  for SB 41  [SB 4],                                                               
labeled  26-LS0019\R  as the  working  document.  There being  no                                                               
objection, version R, was adopted.                                                                                              
                                                                                                                                
MR. BENINTENDI,  Staff, to Senator  Olson, sponsor of SB  4, said                                                               
version R  mirrors HB  74. He noted  that the  sectional analysis                                                               
shows  in  red  the  differences   from  the  original  bill.  He                                                               
introduced SB 4 with the following statement:                                                                                   
                                                                                                                                
     In the  main, Senate  Bill 4  would have  you determine                                                                    
     whether you  want to restore  a significant  measure of                                                                    
     local authority,  or not, when it  comes to development                                                                    
     project  reviews and  district  plan  approvals in  the                                                                    
     coastal  areas of  our state.  With better  than 44,000                                                                    
     miles  of coastline,  resource development  objectives,                                                                    
     and  traditional resource  uses, that's  a considerable                                                                    
     issue.                                                                                                                     
                                                                                                                                
     Major changes in the  Alaska Coastal Management Program                                                                    
     in  2003  eliminated  the Coastal  Policy  Council  and                                                                    
     shifted  authority over  permit  review and  compliance                                                                    
     matters to  the Department of Natural  Resources. Prior                                                                    
     to 2003, the  program was not felt  to be significantly                                                                    
     problematic.  After 2003,  regulations  adopted by  the                                                                    
     Department  of Natural  Resources severely  limited the                                                                    
     ability of  coastal districts to  establish enforceable                                                                    
     policies regarding the  eventual effects of development                                                                    
     on coastal resources and uses.                                                                                             
                                                                                                                                
     Currently,  there are  28 coastal  management districts                                                                    
     with approved coastal  management programs, or programs                                                                    
     under  review for  approval. Increased  federal funding                                                                    
     may  be likely  in the  next two  years. There  are two                                                                    
     major  grant  programs   in  federal  regulation  which                                                                    
     sustain the  ACMP, the so-called  306 program  which is                                                                    
     basically for implementation, and  the 309 which is for                                                                    
     special projects.  A state match  is required  for 306,                                                                    
     but no state match is required for 309.                                                                                    
                                                                                                                                
     AS 46.39 and  AS 46.40 are the  operative statutes. And                                                                    
     the Consistency  Reviews are handled under  11 AAC 110,                                                                    
     11 AAC 112  deals with statewide standards,  and 11 AAC                                                                    
     114 covers the district plan approval process.                                                                             
                                                                                                                                
     Now to the committee substitute itself:                                                                                    
                                                                                                                                
     The bill  would establish a nine-member  Alaska Coastal                                                                    
     Policy Board,  composed of 5 coastal  district members,                                                                    
     and the commissioners  of DNR, Fish and  Game, DEC, and                                                                    
     Commerce, Community &  Economic Development. This would                                                                    
     be smaller than the  17-member panel in existence prior                                                                    
     to  2003. This  version [R]  would add  a fifth  public                                                                    
     member,   and  add   the   commissioner  of   Commerce,                                                                    
     Community & Economic Development to the Board.                                                                             
                                                                                                                                
     The  Board   would  have,   among  other   things,  the                                                                    
     authority   to  approve   district  management   plans,                                                                    
     approve regulations developed  by the department [DNR],                                                                    
     approve program  changes, apply  for and  accept grants                                                                    
     and  other   monies,  evaluate  the   effectiveness  of                                                                    
     district management plans, and settle disputes.                                                                            
                                                                                                                                
     CSSB 4(CRA)  would allow  coastal districts  to develop                                                                    
     management  plans,  create  enforceable  policies,  and                                                                    
     address  "special management  areas," usually  regarded                                                                    
     as  physically  sensitive  to change  and  development.                                                                    
     Other authorities  would deal with  consistency reviews                                                                    
     on  federal lands  and  waters,  the Outer  Continental                                                                    
     Shelf,  inland  development  proposals  if  they  would                                                                    
     greatly impact the coastal  zone, and seismic surveying                                                                    
     activity.                                                                                                                  
                                                                                                                                
     In this  version of the bill,  [version R], subsistence                                                                    
     usage is specifically identified  as a value within the                                                                    
     ACMP objectives.                                                                                                           
                                                                                                                                
     And the  so-called DEC Carve-Out is  eliminated in this                                                                    
     bill.  This  Carve-Out  basically says  that  a  permit                                                                    
     issued   by  DEC   for  a   project  is   automatically                                                                    
     considered "consistent" with  program [ACMP] objectives                                                                    
     and  requirements.  But  this   bill  would  take  that                                                                    
     provision out.                                                                                                             
                                                                                                                                
     The  bill  provides   for  authority  over  development                                                                    
     inland  from  the  coastal  area  if  there  should  be                                                                    
     significant impact  to the coastal zone,  and inclusion                                                                    
     of  activities   in  federal   waters  and   the  Outer                                                                    
     Continental Shelf.                                                                                                         
                                                                                                                                
     This  version  of  the  bill  [version  R]  would  also                                                                    
     address "seismic survey activity,"  and would make each                                                                    
     lease  sale   subject  to  an   individual  consistency                                                                    
     reviews. That's a pretty strong bone of contention.                                                                        
                                                                                                                                
     These are just some of  the sub-issues within the scope                                                                    
     of the ACMP program. The  primary thrust, of course, is                                                                    
     to  return  significant  authority  to  local  district                                                                    
     residents  by sharing  power  over  the Alaska  Coastal                                                                    
     Management  Program  between  public  members  and  the                                                                    
     identified  commissioners.  Since 2003,  all  authority                                                                    
     has  rested   solely  with  the  commissioner   of  the                                                                    
     Department of Natural Resources.                                                                                           
                                                                                                                                
3:53:37 PM                                                                                                                    
CHAIR OLSON asked how this differs from the pre-2003 program,                                                                   
other than the number of board members.                                                                                         
                                                                                                                                
MR.  BENINTENDI replied  some of  the  sub-issues he  highlighted                                                               
would  be handled  differently  than they  were  before the  2003                                                               
changes. The  key issue is having  or not having the  board. "You                                                               
either have  a board  which shares empowerment  with some  of the                                                               
local folks or  you concentrate authority in  the department." If                                                               
a board  again is  established, several  things will  happen that                                                               
will go against having the department manage the program.                                                                       
                                                                                                                                
CHAIR OLSON  questioned why this  board would have  fewer members                                                               
than the previous board.                                                                                                        
                                                                                                                                
MR. BENINTENDI replied he can't answer that specifically.                                                                       
                                                                                                                                
SENATOR  FRENCH  remarked that  the  sectional  analysis is  very                                                               
helpful. He takes it that the  black text refers to version R and                                                               
the red text refers to the original language.                                                                                   
                                                                                                                                
MR. BENINTENDI said that's correct.                                                                                             
                                                                                                                                
3:56:06 PM                                                                                                                    
SENATOR  KOOKESH  noted that  ConocoPhillips  seems  to like  the                                                               
current  process and  asked if  there is  a reason  they wouldn't                                                               
support the change.                                                                                                             
                                                                                                                                
MR. BENINTENDI  acknowledged that his opinion  is generalized. He                                                               
suggested that  an industry that  is trying to  develop resources                                                               
has a  great many issues  to deal with  in the permit  and review                                                               
process.  "Generally speaking  it's very  involved and  complex."                                                               
Perhaps Mr.  Bates is better able  to articulate some of  the key                                                               
areas where "that might be the rub," he added.                                                                                  
                                                                                                                                
CHAIR OLSON opened public testimony.                                                                                            
                                                                                                                                
3:57:43 PM                                                                                                                    
TERI CAMREY,  Planner, City and  Borough of Juneau  (CBJ), stated                                                               
support for  SB 4. "I  think this goes  a long way  to addressing                                                               
the most  serious concerns  that we have  had with  the program."                                                               
CBJ  strongly  supports reinstating  the  role  of Department  of                                                               
Environmental  Conservation  (DEC)   and  restoring  the  Coastal                                                               
Policy Council.                                                                                                                 
                                                                                                                                
She  said  she   will  focus  on  how   local  district  policies                                                               
streamline development and  promote coordination with applicants.                                                               
As  a  result  of  the  2003  Murkowski  administration  changes,                                                               
Juneau's  Coastal Management  Program  went from  99 policies  to                                                               
just 16 and the mediation  process was lengthy. However, the rest                                                               
of  those  policies   didn't  just  go  away.   Like  many  other                                                               
districts, Juneau's  Coastal Management  Program is  a management                                                               
tool  that  contains environmental  regulations  as  well as  pro                                                               
development elements. When they lost  the other policies in their                                                               
plan, the CBJ  assembly decided to keep them in  their local land                                                               
use  code.  The result  is  a  two-part  review process.  The  16                                                               
policies  go through  the Coastal  Management Program  review and                                                               
then the  applicant has  to go  to the  CBJ for  a review  of the                                                               
habitat regulations under the local code.                                                                                       
                                                                                                                                
This two-part  review creates a  greater burden on  the applicant                                                               
than if  it were integrated  into a single  process. Furthermore,                                                               
if   the  local   planning   commission   modifies  the   project                                                               
description, the  applicant has  to start  the ACMP  process over                                                               
again. "By  allowing local  districts to have  a greater  role in                                                               
developing enforceable  policies, you streamline  the development                                                               
process."                                                                                                                       
                                                                                                                                
MS. CAMERY said she appreciates the  work that's been done on the                                                               
bill; it  is a step forward  in resolving the conflicts  that CBJ                                                               
has had since 2003.                                                                                                             
                                                                                                                                
4:00:38 PM                                                                                                                    
SENATOR  THOMAS  asked  if  the major  concern  is  that  coastal                                                               
communities may dictate what activity takes place inland.                                                                       
                                                                                                                                
MS.  CAMERY responded  with an  example. A  basic habitat  policy                                                               
that  Juneau lost  in the  2003 change  was a  streamside setback                                                               
policy that  required buildings  to be located  50 feet  from any                                                               
anadromous water  body. That policy  wasn't approved  because the                                                               
regulations  regarding  what  districts  could  write  about  are                                                               
extremely restrictive. SB 4 would  give Juneau the opportunity to                                                               
bring that policy back and reintegrate it into the process.                                                                     
                                                                                                                                
When  she talks  about "conflict,"  she said  she's referring  to                                                               
district  policies that  were lost  in the  review process.  It's                                                               
safe to  say that all  the districts  lost a large  percentage of                                                               
their  policies that  were very  important for  local management.                                                               
"That's where the  conflict came from and  the streamside setback                                                               
policy is an example of that."                                                                                                  
                                                                                                                                
SENATOR THOMAS said he was curious  if one of the issues was that                                                               
DNR, as  a revenue seeking  department, is driven in  a different                                                               
direction than this type of approach to coastal management.                                                                     
                                                                                                                                
MS. CAMERY replied  there is considerable debate  about what does                                                               
or does  not constitute impact on  the coastal zone. In  the past                                                               
DNR has taken  a more narrow definition of the  coastal zone than                                                               
the federal  definition. "I think  the current changes  bring the                                                               
state in line with what the  federal government is doing. I don't                                                               
believe  it  exceeds  that  and  creates  an  unnecessary  burden                                                               
farther inland."                                                                                                                
                                                                                                                                
4:04:29 PM                                                                                                                    
CHAIR OLSON asked how far the Juneau district extends.                                                                          
                                                                                                                                
MS.  CAMERY replied  the entire  City  and Borough  of Juneau  is                                                               
within the coastal zone.                                                                                                        
                                                                                                                                
CHAIR  OLSON  asked  if  the  Juneau  management  plan  has  been                                                               
approved.                                                                                                                       
                                                                                                                                
MS. CAMERY  said yes; it has  16 policies. She restated  that the                                                               
remaining policies  are in the  local code. Thus a  second review                                                               
process is required.                                                                                                            
                                                                                                                                
CHAIR  OLSON questioned  why CBJ  would support  the bill  if its                                                               
management plan has been approved.                                                                                              
                                                                                                                                
MS.  CAMERY explained  that they  would  like to  bring back  the                                                               
policies  that were  lost with  the 2003  changes. "We  were only                                                               
able to get approval of 16 of our original 99 policies."                                                                        
                                                                                                                                
CHAIR OLSON asked if they want all 83 policies back.                                                                            
                                                                                                                                
MS.  CAMERY  said no;  they  would  select  those that  are  most                                                               
important, like  the streamside setback  policy. It  doesn't make                                                               
sense to  have a review  take place  at two different  levels and                                                               
integrating  the  local  habitat  regulations  into  the  coastal                                                               
management program saves the applicant a lot of time.                                                                           
                                                                                                                                
CHAIR OLSON  commented that adding  another 83 policies  would be                                                               
problematic to  the applicant. As  a businessman he's  dealt with                                                               
bureaucracy and he sees that industry may not favor that.                                                                       
                                                                                                                                
4:06:33 PM                                                                                                                    
MS.   CAMERY  replied   she  appreciates   the   point  but   she                                                               
respectfully disagrees because the  83 policies didn't disappear.                                                               
"You  either  coordinate  them  with the  state  program  or  the                                                               
applicant  has  to  go  through  it  at  the  local  level."  The                                                               
regulations  don't just  go  away.  Integration and  coordination                                                               
saves the  applicant time because  the applicant doesn't  have to                                                               
go through a separate local process.                                                                                            
                                                                                                                                
CHAIR OLSON asked if an  industry representative would agree that                                                               
adding 83 policies would save time.                                                                                             
                                                                                                                                
MS. CAMERY restated that the  applicant already has to go through                                                               
the  83  policies  at  the  local level.  "So  it's  costing  the                                                               
applicant far more  time to have that process  separated from the                                                               
coastal management program."                                                                                                    
                                                                                                                                
4:07:36 PM                                                                                                                    
JOHNNY  AIKEN,  Planning  Director, North  Slope  Borough  (NSB),                                                               
Barrow, AK,  stated support for SB  4. It will fix  problems that                                                               
NSB has faced during the amendment  process for the ACMP. He said                                                               
he will  address just three  of the improvements this  bill makes                                                               
to ACMP.                                                                                                                        
                                                                                                                                
First,  SB  4 will  make  it  clear  that coastal  districts  can                                                               
establish enforceable policy as long  as they are clear, concise,                                                               
do  not  restate  existing  law,  and do  not  address  a  matter                                                               
preempted  by state  or federal  law.  The 2003  changes to  ACMP                                                               
allow districts  to establish policy  for matters  not adequately                                                               
addressed by  state or federal  law. Although  the administration                                                               
assured  the   Legislature  that  districts  would   be  able  to                                                               
establish  reasonable policies  concerning critical  matters such                                                               
as subsistence  and activities in  federal waters, almost  all of                                                               
the  NSB enforceable  policies were  rejected by  DNR. Understand                                                               
that  neither  the NSB  nor  any  district  is seeking  to  adopt                                                               
policies  that would  obstruct future  development, he  said. The                                                               
borough never  used its former  plan to obstruct North  Slope oil                                                               
and gas development and doesn't intend  to do that in the future.                                                               
It is dependent on oil and gas development for its revenue.                                                                     
                                                                                                                                
Second, the  CS would  bring DEC back  into the  ACMP consistency                                                               
review process.  Carving DEC out of  the process in 2003  has had                                                               
unintended consequences.  It removed consideration  of activities                                                               
related to air and water  quality from project review. Because so                                                               
many coastal resources  and uses are directly related  to air and                                                               
water quality, the scope of the  ACMP review is not clear. One of                                                               
the biggest  concerns for NSB  is the  effect of a  potential oil                                                               
spill  on  subsistence  resources  and uses.  Under  the  current                                                               
program they are unable to address that.                                                                                        
                                                                                                                                
Third, the  CS would establish  a coastal policy board.  The 2003                                                               
changes  concentrated all  decision  making into  a single  state                                                               
agency. This  bill would  give the new  board oversight  in three                                                               
major  areas: approval  of coastal  district  plans, approval  of                                                               
major grant  programs, and  approval of  proposed changes  to the                                                               
ACMP  regulations. This  board is  a streamlined  version of  the                                                               
former Coastal Policy Council, but  it would be smaller and would                                                               
not be responsible for the  final administrative determination of                                                               
contested  individual project  consistency reviews.  Establishing                                                               
this board will improve trust  and confidence in the structure of                                                               
the ACMP.                                                                                                                       
                                                                                                                                
These changes would  help streamline the ACMP  by encouraging all                                                               
parties  to  work cooperatively  early  in  the process  to  find                                                               
solutions. By  solving problems with all  the permitting agencies                                                               
at  the  table,  applicants  would not  have  to  fight  separate                                                               
battles with  each permitting  agency. Also,  there is  a greater                                                               
likelihood that agency stipulations will be similar.                                                                            
                                                                                                                                
4:13:57 PM                                                                                                                    
CHAIR OLSON  asked if  the NSB coastal  management plan  has been                                                               
approved.                                                                                                                       
                                                                                                                                
MR. AIKEN said no; they have been  working on it for about 3 or 4                                                               
years. Although they've had many  meetings, they can't agree with                                                               
DNR about how policy should be written and interpreted.                                                                         
                                                                                                                                
4:15:30 PM                                                                                                                    
CHAIR OLSON asked if there were  problems on the North Slope with                                                               
oil and gas development before the 2003 changes.                                                                                
                                                                                                                                
MR. AIKEN said not that he recalls.                                                                                             
                                                                                                                                
TOM OKLESIK, Planning Director,  Northwest Arctic Borough (NWAB),                                                               
said the mayor and the borough  have stated support for the bill.                                                               
It would restore the ability  of coastal districts to effectively                                                               
participate in  the program and establish  meaningful policies to                                                               
work  with industry  and  the  ACMP. It  would  again provide  an                                                               
avenue  of  taking  valuable  local input  and  putting  it  into                                                               
development.  The  state  is  large  and  diverse  and  statewide                                                               
policies  that   are  designed  in  Anchorage   or  Juneau  don't                                                               
necessarily  take into  consideration the  way of  life in  other                                                               
areas of the state. NWAB  supports the provision establishing the                                                               
Coastal  Policy  Board  to  oversee the  major  aspects  of  this                                                               
publicly funded  program. It would  also create  a representation                                                               
of  state   agencies  with  local  districts.   This  will  bring                                                               
effective public engagement back into the program.                                                                              
                                                                                                                                
In the  last year  NWAB attempted mediation  with DNR.  Under the                                                               
2003 changes that department acts as  a single agency to make all                                                               
program  decisions  and  it's  been  frustrating.  The  mediation                                                               
process ended in an impasse and  the NWAB plan was flatly denied.                                                               
The only  recourse is to  ask the DNR commissioner  to reconsider                                                               
the decision that he and his  staff made. There is no ability for                                                               
a  third-party review  that involves  the public.  Hopefully this                                                               
new  provision will  prevent  future  problematic situations  for                                                               
districts across  the state  and make sure  that state  staff are                                                               
getting clear  direction for coastal district  policies and board                                                               
involvement.                                                                                                                    
                                                                                                                                
4:19:27 PM                                                                                                                    
NWAB  also   supports  the  addition  of   subsistence  into  the                                                               
objectives of AS 46.40.020. Until  the 2003 changes, the ACMP was                                                               
an effective tool to balance  resource development and protection                                                               
of  coastal  resources  to   promote  healthy  subsistence.  It's                                                               
important that  Alaska residents, particularly in  the NWAB, have                                                               
a real  life connection  to their land  and cultural  areas. That                                                               
relationship needs  to be recognized when  development occurs. It                                                               
produces a cooperation with developers  so that there is a social                                                               
license to operate in addition  to any permitting licenses. So we                                                               
definitely look  at how  we can  address subsistence  impacts and                                                               
that's  a major  reason  that the  borough  participates in  this                                                               
program, he said. The  borough encourages responsible development                                                               
but wants to make  sure it's done the right way.  The best way to                                                               
do that is to make sure that  local districts have a voice at the                                                               
table when development is discussed.                                                                                            
                                                                                                                                
4:21:16 PM                                                                                                                    
SENATOR THOMAS  asked which specific provision  would replace the                                                               
current lack of appeal other  than going back to the commissioner                                                               
of DNR.                                                                                                                         
                                                                                                                                
MR. OKLESIK  replied it's engagement  beyond the  department; the                                                               
coastal policy board would be involved in approval of plans.                                                                    
                                                                                                                                
BILL  LUCEY,  Staff  Biologist  and  Coastal  Planner,  City  and                                                               
Borough  of  Yakutat,  said  his   experience  working  with  the                                                               
Division of Coastal  and Ocean Management staff  has largely been                                                               
positive from both  a reviewer and applicant  standpoint. He runs                                                               
field  crews that  perform a  variety of  conservation work  from                                                               
tree thinning to  stream restoration. He has to go  through a CPQ                                                               
process to permit his own projects  so he deals with it from that                                                               
side.  He's  also  a  reviewer   so  he  assists  businesses  and                                                               
homeowners  in   Yakutat  in  navigating  programs   for  diverse                                                               
activities.                                                                                                                     
                                                                                                                                
The proposed  board structure, composed  of state  agency members                                                               
and  district  representatives, will  ensure  that  the board  is                                                               
staffed with focused people who  can objectively run the process.                                                               
He  envisions that  it  will  enhance the  value  of the  coastal                                                               
program and restore trust in the entire coastal program.                                                                        
                                                                                                                                
4:24:21 PM                                                                                                                    
Drawing on his  experience with the Board of Fish  and the Beluga                                                               
Whale Committee, he said he  knows that citizen boards work. It's                                                               
inspiring to see.  Creating a similar board  for coastal resource                                                               
issues is a good idea.                                                                                                          
                                                                                                                                
With respect to  reinstating the ability to weigh  in on projects                                                               
that  are adjacent  to coastal  districts, he  said the  original                                                               
1974  federal  legislation   establishing  a  nationwide  coastal                                                               
program was very clear. For example,  you'd want to have a say if                                                               
someone  wanted  to put  a  hog  farm  upstream from  your  kid's                                                               
swimming hole.                                                                                                                  
                                                                                                                                
Referring to the  so-called DEC carve-out he said  that water and                                                               
air  quality are  the  areas that  usually  sustain the  greatest                                                               
impact  from human  development activities.  Water quality  is of                                                               
particular concern to  the people of Yakutat  because they depend                                                               
heavily on fisheries  and so it is extremely important  to have a                                                               
strong reasonable voice protecting water quality.                                                                               
                                                                                                                                
MR.  LUCEY  said  he  recently  heard  that  the  Alaska  seafood                                                               
industry is  almost $5 billion  and he believes that  with strong                                                               
coastal  policies  and  with   local  input  emphasizing  healthy                                                               
habitat and clean water, fish will  cycle through ever year. SB 4                                                               
is long-sighted  legislation, will energize local  governance and                                                               
result in reasonable stewardship of the land and water.                                                                         
                                                                                                                                
Finally, the  perception that  this program  is designed  to halt                                                               
development is incorrect. It is  simply designed to make informed                                                               
responsible decisions during the development process, he said.                                                                  
                                                                                                                                
CHAIR  OLSON  asked  if  the Yakutat  management  plan  has  been                                                               
approved.                                                                                                                       
                                                                                                                                
MR. LUCEY said yes. "One of the  reasons we decided not to put up                                                               
a large fight  is we were assured that this  process was going to                                                               
occur."                                                                                                                         
                                                                                                                                
4:28:46 PM                                                                                                                    
RANDY BATES,  Director, Division  of Coastal &  Ocean Management,                                                               
Department of  Natural Resources  (DNR), extended  apologies from                                                               
Commissioner  Irwin,  Deputy  Commissioner  LeFebvre  and  Deputy                                                               
Commissioner  Rutherford  as  they   would  have  liked  to  have                                                               
attended the  hearing to share  the department's position  on the                                                               
bill.                                                                                                                           
                                                                                                                                
DNR  does not  support SB  4  and has  two substantive  concerns.                                                               
First, it  creates a  new oversight  body and  vests it  with the                                                               
ability  to override  DNR's authority.  This effectively  renders                                                               
mute the  legislative establishment of laws  relative to resource                                                               
management and  protection. Second, the  bill is specific  to the                                                               
issue of  a group of ACMP  participants, but it does  not balance                                                               
or  represent the  interests of  all stakeholders.  He noted  the                                                               
fiscal note  from DNR and  added that the department  has further                                                               
concerns relative to the committee substitute.                                                                                  
                                                                                                                                
4:31:02 PM                                                                                                                    
SENATOR FRENCH  questioned how realistic  it is  to legislatively                                                               
insert a new  coastal zone policy board  inside an administration                                                               
that is hostile toward it.                                                                                                      
                                                                                                                                
CHAIR   OLSON  agreed   that  it's   always  a   concern  because                                                               
legislators  pass policy  issues and  the administration  has its                                                               
own ideas. He asked Mr. Bates for a response.                                                                                   
                                                                                                                                
MR.  BATES  restated  that  the   first  issue  he  raised  is  a                                                               
substantive concern for  DNR. The CS for SB 4  vests the proposed                                                               
coastal  policy board  with powers  to  approve coastal  district                                                               
enforceable  policies   that  override,   exceed  and   are  more                                                               
stringent than existing state law.                                                                                              
                                                                                                                                
He deferred to his superiors  any discussion about whether or not                                                               
and how the  administration would work with  the proposed coastal                                                               
policy board.                                                                                                                   
                                                                                                                                
4:33:07 PM                                                                                                                    
SENATOR THOMAS asked if DNR has  any suggestions to make the bill                                                               
more palatable.                                                                                                                 
                                                                                                                                
MR. BATES replied the division  and the department are evaluating                                                               
potential changes  to the  coastal program, but  it is  a complex                                                               
program and  consensus on  any proposed  change is  difficult. He                                                               
said  he  doesn't  doubt  that  this  bill  will  face  the  same                                                               
challenges. "Clearly,  any bill has  to strike a consensus  as it                                                               
affects  so  many  ACMP   participants-the  industry,  the  local                                                               
government, the non-governmental  organizations and, importantly,                                                               
the state agencies who have to implement it."                                                                                   
                                                                                                                                
SENATOR MENARD  asked how much  heartburn is associated  with the                                                               
fiscal note.                                                                                                                    
                                                                                                                                
MR.  BATES  replied the  majority  of  the fiscal  note  reflects                                                               
travel costs  and what is  necessary to hold the  board meetings.                                                               
Division staff is not impacted.                                                                                                 
                                                                                                                                
CHAIR  OLSON asked  if the  state  pays for  travel, lodging  and                                                               
meals   when  employees   travel   on  other   department-related                                                               
business.                                                                                                                       
                                                                                                                                
MR. BATES said yes; DNR is  concerned about the creation of a new                                                               
nine-member board  and staffing  that goes  along with  that. The                                                               
fiscal note describes a three-day  meeting four times a year held                                                               
in different  locations. Travel  would be  expected to  come from                                                               
regions mentioned in the bill  for public members and numbers are                                                               
built in to ensure that the  designated state members are able to                                                               
participate.                                                                                                                    
                                                                                                                                
CHAIR OLSON  stated that he  brought the bill forward  because of                                                               
frustration  by members  of the  28 districts  - even  those that                                                               
have had  their plans approved. Anytime  decision-making power is                                                               
concentrated,  people  tend  to  look at  the  decisions  with  a                                                               
critical eye.                                                                                                                   
                                                                                                                                
MR. BATES replied he understands the concern.                                                                                   
                                                                                                                                
CHAIR OLSON said  a concern he's heard is that  the people in the                                                               
department who are  looking at the management plans  seem to have                                                               
a   less  than   cooperative  attitude.   People  are   generally                                                               
frustrated and as  the person from Kotzebue said,  things went to                                                               
an  impasse. Yet  that's in  the area  of the  Chukchi Sea  where                                                               
major development will happen in the near future.                                                                               
                                                                                                                                
MR.   BATES   declared   that    the   frustration   stems   from                                                               
implementation  of a  program according  to  the law  that is  in                                                               
place. It's  a natural  rub that  coastal districts  want purview                                                               
over their district  policies, but it's DNR's  job to objectively                                                               
implement what  is in  law and approve  the policies  that comply                                                               
and not approve those that do not comply.                                                                                       
                                                                                                                                
4:39:44 PM                                                                                                                    
CHAIR OLSON suggested that the  source of the frustration is that                                                               
the  people out  in  the  coastal districts  don't  see that  the                                                               
department  is  being  objective.  He asked  how  many  districts                                                               
currently are not participating in the program.                                                                                 
                                                                                                                                
MR.  BATES   relayed  that  there  are   35  established  coastal                                                               
districts:  28 districts  have been  working on  coastal district                                                               
plans since the 2003 mandated  change; 25 districts have approved                                                               
coastal  district   plans  and  are  implementing   them;  and  3                                                               
districts-the North  Slope Borough, the Northwest  Arctic Borough                                                               
and  the Bering  Straits Coastal  Resource Service  Area-have not                                                               
secured approval of their plans.                                                                                                
                                                                                                                                
CHAIR OLSON asked  his opinion why the plans for  the 3 districts                                                               
haven't been approved.                                                                                                          
                                                                                                                                
MR. BATES  replied it's simply a  matter of what DNR  can approve                                                               
as enforceable  policies. The department's position  is that many                                                               
of the  district enforceable policies  put forth by NSB  and NWAB                                                               
are not  approvable as written.  DNR went through  mediation with                                                               
both districts  and came  close to  approving the  district plans                                                               
but, "we  must have run  into a  roadblock, in their  opinion, to                                                               
the point that they didn't  want to pursue district plan approval                                                               
anymore at that point."                                                                                                         
                                                                                                                                
CHAIR  OLSON asked  if he  believes that  the ACMP  should remain                                                               
within DNR.                                                                                                                     
                                                                                                                                
MR.  BATES  said yes;  the  coastal  management program  is  well                                                               
aligned  with DNR's  mission,  which is  to  manage, enhance  and                                                               
protect natural resources.                                                                                                      
                                                                                                                                
4:42:18 PM                                                                                                                    
SENATOR KOOKESH questioned how much  of his concern about keeping                                                               
the program  within DNR relates  to protecting turf and  how much                                                               
relates  to looking  out for  the  best interests  of Alaska  and                                                               
Alaskans. Education  and oil and  gas both have  oversight boards                                                               
and he  questioned why DNR does  not support having a  board that                                                               
oversees this particular area.                                                                                                  
                                                                                                                                
MR. BATES  said he  doesn't believe that  the location  of either                                                               
the Division of Coastal & Ocean  Management (DCOM) or the ACMP is                                                               
part of  the bill and  as such DNR  didn't prepare a  position on                                                               
that issue.  He acknowledged  that prior to  the 2003  change the                                                               
ACMP  was housed  in the  Division of  Governmental Coordination,                                                               
which  was  in  the  governor's office.  "Since  2003  it's  been                                                               
located  within  DNR. We  were  part  of the  Project  Management                                                               
Permitting  Office and  then back  in  October of  last year…  we                                                               
created  a   new  division  specific  to   managing  the  Coastal                                                               
Management  Program, the  Coastal  Impact  Assistant Program  and                                                               
other   ocean  functions   that  are   appropriate  within   that                                                               
division."                                                                                                                      
                                                                                                                                
CHAIR OLSON asked for a brief  summary of the workshops that DCOM                                                               
held last summer  to try to get consensus on  some of the issues.                                                               
"How successful you think they  were and if they were successful,                                                               
what's the outcome."                                                                                                            
                                                                                                                                
MR.   BATES  mentioned   the  letter   he   sent  last   February                                                               
articulating the desire to establish  and go through a process to                                                               
reevaluate the coastal laws and  the day-to-day implementation of                                                               
the  ACMP.  He explained  that  last  July  the division  met  in                                                               
various  places  to  solicit  comments,  ideas  and  debate  from                                                               
coastal program  participants. At this point  the department does                                                               
not  have a  package of  changes to  introduce or  discuss. There                                                               
certainly is no consensus on the  issues that were brought up, he                                                               
said.                                                                                                                           
                                                                                                                                
CHAIR  OLSON asked  for a  brief synopsis  of the  Coastal Impact                                                               
Assistant Program.                                                                                                              
                                                                                                                                
MR. BATES explained that the  Coastal Impact Assistant Program is                                                               
a federal  program that was  authorized in the Energy  Policy Act                                                               
of 2005. It allows six states,  including Alaska, to share in oil                                                               
and gas revenues that are  realized off their coastal shores. For                                                               
FY07  and FY08  the Alaska  share was  about $2.5  million. As  a                                                               
result of the Chukchi Lease Sale  193, the Alaska portion went up                                                               
to between $40  million and $80 million. DCOM is  the lead agency                                                               
for  implementing  that  program  and is  working  with  eligible                                                               
subdivisions including the North  Slope Borough, Northwest Arctic                                                               
Borough,  Bristol Bay  Borough and  Cook Inlet  municipalities to                                                               
amend the  coastal impact  assistance plan  to take  advantage of                                                               
the money. Of  the money coming to the state,  65 percent will go                                                               
directly into  the state  funds and 35  percent will  go directly                                                               
into the coffers  of the eligible subdivisions. "We  as the state                                                               
have decided that we want to be  able to share that money as well                                                               
as pursue  projects that would  benefit state initiatives  and so                                                               
we've  got a  further  split: 70  percent of  the  money that  is                                                               
coming to  the state over the  course of the next  two years will                                                               
go to  state initiated projects; 30  percent will be put  out for                                                               
competitive  open  solicitation  and  bid.  That  money  will  be                                                               
eligible  to entities  wanting to  engage in  projects that  will                                                               
benefit the  environment and meet  other criteria  as established                                                               
by  the  Minerals  Management Service  (MMS)  as  the  overseeing                                                               
agency."                                                                                                                        
                                                                                                                                
CHAIR OLSON  asked how the  unorganized borough is  treated under                                                               
the impact assistance program.                                                                                                  
                                                                                                                                
MR. BATES  explained that the criterion  for identifying eligible                                                               
coastal subdivisions is based on  federal law. "It was … Minerals                                                               
Management Service's interpretation …  that said coastal resource                                                               
service areas  are not an  eligible subdivision of the  state. It                                                               
is the level  of government that is organized  and directly below                                                               
the state,  which means that  it is the  boroughs. … It  does not                                                               
include cities,  it does not  include any  subdivision underneath                                                               
the borough."                                                                                                                   
                                                                                                                                
4:48:56 PM                                                                                                                  
CHAIR  OLSON   noted  that  he   represents  the  areas   in  the                                                               
unorganized  borough that  are just  below  the Northwest  Arctic                                                               
Borough. He  asked if  he's saying  that those  unorganized areas                                                             
won't benefit even though they can see things right off shore.                                                                  
                                                                                                                                
MR. BATES explained that  eligible coastal political subdivisions                                                               
are based  on a proximal location  to a producing well  or lease.                                                               
"In this case,  it's a 200 mile radius." Neither  of the resource                                                               
service areas  that are  within your  district is  located within                                                               
that proximal distance  so they are not  an eligible subdivision,                                                               
he said. Thus, they are  not eligible for the direct distribution                                                               
of  that 35  percent of  the overall  total. However,  the Bering                                                               
Straits CRSA,  the Cheñaliulriit CRSA,  the Bristol Bay  CRSA and                                                               
the  Aleutians  West  CRSA  are eligible  to  pursue  the  public                                                               
funding that  will be available. "That  solicitation should begin                                                               
sometime in March  so it's not that they're  completely out. It's                                                               
that  they can  pursue other  avenues for  securing some  of that                                                               
money," he said.                                                                                                                
                                                                                                                                
4:50:32 PM                                                                                                                    
CHAIR OLSON asked what was in  place before the Energy Policy Act                                                               
of 2005.                                                                                                                        
                                                                                                                                
MR. BATES  explained that there  was a coastal  impact assistance                                                               
program in 2001 that was  implemented by the National Oceanic and                                                               
Atmospheric  Administration (NOAA).  That agency  determined that                                                               
CRSAs  were eligible  subdivisions  without having  a  link to  a                                                               
wellhead  or  lease.  In  2005  the  language  in  the  bill  was                                                               
tightened significantly and the MMS became the lead agency.                                                                     
                                                                                                                                
CHAIR  OLSON  asked for  clarification  that  under the  original                                                               
program the  areas in the  unorganized borough were  eligible for                                                               
those funds.                                                                                                                    
                                                                                                                                
MR. BATES said that's correct.                                                                                                  
                                                                                                                                
CHAIR  OLSON asked  if the  administration intends  to put  forth                                                               
legislation  to addresses  the  difficulties  that districts  are                                                               
having.                                                                                                                         
                                                                                                                                
MR. BATES restated that he  is representing the department and at                                                               
this time the issues it has  been evaluating are neither ripe nor                                                               
ready for introduction as a bill. There is no consensus.                                                                        
                                                                                                                                
CHAIR OLSON declared that this  bill addresses specifically that.                                                               
"If you can't  come to a consensus, we'll have  a board that will                                                               
do that."                                                                                                                       
                                                                                                                                
4:53:01 PM                                                                                                                    
MR. OKLESIK  said he wants  the committee to understand  that the                                                               
perspective  Mr.  Bates  presented  was  heavily  one-sided.  The                                                               
decision for NWAB to ask for  an impasse weighed heavily. Part of                                                               
the issue  was the huge  divergence between what the  borough saw                                                               
in  black and  white  and  what the  department  said. When  they                                                               
explained their analysis and asked  the department to do the same                                                               
the answer  was a  flat out  no. A  policy board  would hopefully                                                               
make  the  department  more  accountable  to  the  residents  and                                                               
communities of  Alaska, he  said. For the  state to  respond that                                                               
way is unacceptable.                                                                                                            
                                                                                                                                
CHAIR OLSON closed public testimony.                                                                                            
                                                                                                                                
SENATOR KOOKESH asked if he intended to move the bill.                                                                          
                                                                                                                                
CHAIR OLSON  replied we're  trying to address  a problem  and the                                                               
administration  does  not  have  legislation  forthcoming  so  we                                                               
should move this  along. It can be modified as  it presses ahead,                                                               
he added.                                                                                                                       
                                                                                                                                
4:56:16 PM                                                                                                                    
SENATOR  KOOKESH  moved  to  report  SB  4  from  committee  with                                                               
individual  recommendations  and  attached  fiscal  notes.  There                                                               
being no objection CSSB 4 (CRA) moved from committee.                                                                           

Document Name Date/Time Subjects
CSSB 4 support letter.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
CSSB19 Work Draft.pdf SCRA 2/5/2009 3:30:00 PM
SB 19
SB3 Fiscal Note DFG-CFEC.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 Fiscal Note DCCED-OED.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 ARDORletter1.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 ARDORletter2.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 Fish&GameLetter.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 Lower Kuskokwim Letter.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
CSSB4 Sponsor Statement.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
CSSB4 Fiscal Note DNR-DCOM.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
CSSB4 Highlights.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
CSSB4 Sectional Analysis.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB3 Sponsor Statement& Sectional Analysis.doc SCRA 2/5/2009 3:30:00 PM
SB 3
SB3 SWAMCletter.pdf SCRA 2/5/2009 3:30:00 PM
SB 3
SB4 ACMP Overview.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 DCOM CZMA fund summary.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 Conoco Phillips Letter.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 Fiscal Note DEC-CO.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 District Guide.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 Index Map.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 N. Slope Borough Letter.pdf SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 Sponsor Statement.doc SCRA 2/5/2009 3:30:00 PM
SB 4
SB4 Sectional Analysis.doc SCRA 2/5/2009 3:30:00 PM
SB 4