Legislature(2009 - 2010)SENATE FINANCE 532

04/13/2010 02:30 PM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 312 VESSEL PASSENGER TAX
Scheduled But Not Heard
= SB 4 COASTAL MANAGEMENT PROGRAM
Heard & Held
= HB 315 PUBLIC ACCOUNTING
Heard & Held
SENATE BILL NO. 4                                                                                                             
                                                                                                                                
     "An Act relating to the Alaska coastal management                                                                          
     program; and establishing the Alaska Coastal Policy                                                                        
     Board."                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to  ADOPT the CS  for SB  4, labeled                                                                    
26-LS0019\S,  Cook, 4/10/10,  as the  work draft  before the                                                                    
committee.                                                                                                                      
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
3:13:53 PM                                                                                                                    
                                                                                                                                
Senator Donny Olson, Sponsor, explained  the need for a bill                                                                    
dealing  with  the  Alaska   Coastal  Management  Board.  He                                                                    
thanked the mayor  of the North Slope  Borough for appearing                                                                    
at the meeting.                                                                                                                 
                                                                                                                                
TIM  BENINTENDI,   STAFF,  SENATOR  DONNY   OLSON,  SPONSOR,                                                                    
referred  to  Version  S  of the  bill.  He  explained  that                                                                    
coastal  zone management  is a  big  issue. Version  S is  a                                                                    
product  of  the  sponsor  and  several  supporters  of  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
3:15:43 PM                                                                                                                    
                                                                                                                                
Mr. Benintendi explained the changes  in the bill. Section 1                                                                    
allows the  governor to appoint four  coastal district board                                                                    
members and an alternate  without coastal district approval.                                                                    
The  commissioners  would continue  to  serve  on the  board                                                                    
totaling nine  people appointed by  the governor.  Section 4                                                                    
removes  a provision  for  board  consultation with  federal                                                                    
agencies. Section  5 is a grammatical  correction. Section 9                                                                    
removes  the  term   "prescriptive  and  performance  based"                                                                    
regarding enforceable  policies. The term  "contemporary and                                                                    
traditional"  is also  removed. The  term "areas  that merit                                                                    
special  attention" replaces  the  term "special  management                                                                    
areas" in several places. The word "on" replaces "upon".                                                                        
                                                                                                                                
Mr. Benintendi  continued to say  that Section  10 clarifies                                                                    
the role of  the board in approving  regulation changes. The                                                                    
term "areas that merit special  attention" replaces the term                                                                    
"special  management  areas".   Section  11  clarifies  that                                                                    
regulations  for  district   plan  criteria  cannot  require                                                                    
designation  of areas  as  a  precondition for  establishing                                                                    
district  enforceable policies.  Section  14 clarifies  that                                                                    
enforceable policies  cannot conflict with state  statute or                                                                    
regulations.                                                                                                                    
                                                                                                                                
3:19:33 PM                                                                                                                    
                                                                                                                                
Mr.  Benintendi  explained  that   Section  19  removes  the                                                                    
proposed provision  to allow reviews  inland of  the coastal                                                                    
zone and  removes the  term "and water".  Section 23  adds a                                                                    
new  subsection  to clarify  that  draft  permits cannot  be                                                                    
required  before the  start of  an ACMP  consistency review.                                                                    
Section  30 removes  Section 30  from SB  4 to  AS 46.40.190                                                                    
regarding  cooperative  administration. Section  31  removes                                                                    
language  in  the   existing  definition  "coastal  resource                                                                    
district" regarding  boroughs that do not  exercise plan and                                                                    
zoning  authority.  Section  35  adds new  language  to  the                                                                    
definition of  project that allows ACMP  reviews of proposed                                                                    
federal   rules,   including    proposed   rules   regarding                                                                    
endangered species. This  may be a new way  to challenge the                                                                    
Endangered Species Act.                                                                                                         
                                                                                                                                
Mr.  Benintendi   reported  that  Section  36   removes  the                                                                    
proposed  new  definition  for "special  management  areas".                                                                    
Section 37 removes the repeal  of the existing definition of                                                                    
"areas  that merit  special attention".  Sections 38  and 39                                                                    
both repeal  provisions in  CH. 31,  SLA 2005  that repealed                                                                    
the coastal management program in 2011.                                                                                         
                                                                                                                                
3:22:54 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman WITHDREW his  OBJECTION to adopting Version                                                                    
S. There being NO OBJECTION, it was so ordered.                                                                                 
                                                                                                                                
Senator Olson  pointed out the  number of  major concessions                                                                    
considered by the bill's sponsor.                                                                                               
                                                                                                                                
Co-Chair Stedman  noted two new  fiscal notes, one  from the                                                                    
Department  of  Natural  Resources  (DNR)  for  $165,000  in                                                                    
general funds to  cover the cost of travel  and supplies for                                                                    
the Coastal  Policy Board as  well as contractual  funds for                                                                    
DNR to  draft regulations,  and one  from the  Department of                                                                    
Environmental   Conservation    (DEC)   for    $118,700   in                                                                    
interagency  receipts for  one additional  person needed  to                                                                    
serve as DEC's Coastal Management Program Coordinator.                                                                          
                                                                                                                                
3:25:01 PM                                                                                                                    
                                                                                                                                
RANDY  BATES,   DIRECTOR,  DIVISION  OF   OCEAN  MANAGEMENT,                                                                    
DEPARTMENT OF NATURAL RESOURCES,  stated that the department                                                                    
has serious issues with SB 4, especially Version R.                                                                             
                                                                                                                                
Co-Chair  Stedman   pointed  out  that  the   committee  was                                                                    
considering Version  S, not Version  R, and asked  Mr. Bates                                                                    
if he  was prepared  to address  the substantial  changes in                                                                    
that  version. Mr.  Bates responded  that he  had just  been                                                                    
given a  copy of Version S  and has had a  limited amount of                                                                    
time to  review it. He  noted that  after a quick  review of                                                                    
Version S,  the changes made  do not alter  the department's                                                                    
major concerns.                                                                                                                 
                                                                                                                                
Co-Chair Hoffman  expressed frustration about a  letter from                                                                    
DNR dated  April 13  which he only  received today.  He said                                                                    
the department's letter offered  no solutions or "fixes". He                                                                    
suggested  that  the  department   come  up  with  something                                                                    
positive so that  issues in rural areas can  be resolved. He                                                                    
emphasized  that  rural  Alaskans  wish to  be  partners  in                                                                    
decisions that affect their daily  lives. He maintained that                                                                    
DEC  does not  want  to share  in decision-making  regarding                                                                    
coastal  zone issues.  He emphasized  that the  coastal zone                                                                    
regulations   would  be   expiring   shortly.  He   strongly                                                                    
requested positive suggestions, not obstacles.                                                                                  
                                                                                                                                
Mr.  Bates  responded  that the  department's  concerns  are                                                                    
substantial  and the  governor  has spoken  to these  issues                                                                    
several  times.  He  stated  that  it  is  the  department's                                                                    
position that rural districts  currently have an opportunity                                                                    
to  have  input  through  coastal  management.  The  coastal                                                                    
program is a state program  that is based on state decision-                                                                    
making that  takes into account  local influence  and input.                                                                    
Coastal  districts   do  have  an  opportunity   to  provide                                                                    
comments during  the consistency  review of a  project. They                                                                    
do  have enforceable  policies that  they  could apply.  The                                                                    
bill deals  with changing  the input  of local  control. The                                                                    
governor  has stated  that for  those projects  that are  of                                                                    
significant  interest  to  the state  and  have  significant                                                                    
economic or  other interests to its  collective residents, a                                                                    
local community  should not have  veto authority  over those                                                                    
projects and preclude development  that is of great interest                                                                    
to the rest of the state.                                                                                                       
                                                                                                                                
Mr.  Bates  maintained  that  SB 4,  as  proposed  does  not                                                                    
provide a  reasonable balance, which  is why  the department                                                                    
has not provided solutions to  modify the bill. He noted the                                                                    
sunset provisions  under AS 44.66.020 and  AS 44.66.050, and                                                                    
suggested that  the legislative hearing process  be followed                                                                    
related to those sunset provisions.   At the hearing process                                                                    
the department should demonstrate  an ability to implement a                                                                    
successful coastal  program and identify  proposed statutory                                                                    
regulatory   changes  that   would   benefit  the   public's                                                                    
interest. He  referred to  today's letter  which highlighted                                                                    
his position.                                                                                                                   
                                                                                                                                
3:32:24 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  commented  that  four  of  the  committee                                                                    
members have  significant coastal  areas in  their districts                                                                    
and  stressed the  importance of  this  issue. The  dialogue                                                                    
over past  weeks led  to the request  that the  bill sponsor                                                                    
consider amending Version R of  the bill in order to address                                                                    
concerns that  were brought forward. He  voiced concern that                                                                    
the department is not interested  in dealing with the matter                                                                    
until  next year.  He  clarified that  the  goal, as  policy                                                                    
makers,   is  to   diminish  the   strife  between   coastal                                                                    
communities and  the department.  He was concerned  that the                                                                    
department  was  not  interested  in working  to  solve  the                                                                    
issues. He asked  if the department would look  at Version S                                                                    
and come back to the table with suggestions.                                                                                    
                                                                                                                                
Mr. Bates  stressed the importance of  the written testimony                                                                    
which  contains  concerns  by the  Department  of  Law,  the                                                                    
Department   of   Environmental    Conservation,   and   the                                                                    
Department  of Natural  Resources.  He  said his  department                                                                    
would go back  and take another look and report  back to the                                                                    
committee.                                                                                                                      
                                                                                                                                
3:35:09 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  noted that the department's  letter is not                                                                    
in the packet.                                                                                                                  
                                                                                                                                
Co-Chair  Hoffman related  that the  biggest concession  the                                                                    
sponsor made is in Section 1.  He took issue with the change                                                                    
in Section 1 that lets the  department pick its own team. He                                                                    
accused  the  department  of having  stalling  tactics  even                                                                    
though they are given a winning hand.                                                                                           
                                                                                                                                
3:37:54 PM                                                                                                                    
                                                                                                                                
Senator Thomas  pointed out the interior's  diverse economic                                                                    
interests. He  observed that  the board  seems to  be taking                                                                    
precedence  over the  department. He  raised an  issue about                                                                    
the permitting process and how  permits might be affected by                                                                    
coastal management concerns such as water quality.                                                                              
                                                                                                                                
Mr. Bates  replied that the Coastal  Management Program does                                                                    
not  get  involved  with water  quality  enforcement  on  an                                                                    
interior  project unless  it is  a  federal agency  activity                                                                    
such as a BLM Forest Service timber sale.                                                                                       
                                                                                                                                
Mr. Bates addressed Senator  Hoffman's concern by explaining                                                                    
existing  federal and  state policies.  He gave  examples of                                                                    
enforceable policies  under SB  4, Version S,  that conflict                                                                    
with the state.                                                                                                                 
                                                                                                                                
3:42:12 PM                                                                                                                    
                                                                                                                                
Senator  Thomas restated  the question  about water  quality                                                                    
issues  along  the  coast.  Mr.  Bates  clarified  that  the                                                                    
current  program   as  proposed  in  SB   4  eliminates  the                                                                    
possibility  of consistency  review  under the  ACMP for  an                                                                    
activity that is  inland of the coastal zone.  The reason is                                                                    
that  in  1978 the  coastal  zone  boundaries were  limited.                                                                    
Alaska  has   an  inland  boundary  that   is  biophysically                                                                    
defined. The  department does not  see a need to  review the                                                                    
boundaries.                                                                                                                     
                                                                                                                                
AT-EASE        3:45:05 PM                                                                                                     
RECONVENED     3:57:41 PM                                                                                                     
                                                                                                                                
Co-Chair   Hoffman  asked   if  Mr.   Bates  had   any  more                                                                    
information to share. Mr. Bates  offered to review Version S                                                                    
and report back to the committee.                                                                                               
                                                                                                                                
Co-Chair Hoffman emphasized that  the department's last time                                                                    
frame  was unacceptable.  He suggested  that the  department                                                                    
come  up with  suggestions  by tomorrow  morning. Mr.  Bates                                                                    
offered to respond by tomorrow.                                                                                                 
                                                                                                                                
Co-Chair  Hoffman understood  that the  governor would  pick                                                                    
board members  as a major  concession found in Version  S of                                                                    
the bill.                                                                                                                       
                                                                                                                                
4:00:24 PM                                                                                                                    
                                                                                                                                
Senator  Olson pointed  out that  the governor  received the                                                                    
bill only  yesterday. He doubted  that the time  frame would                                                                    
be  met  by  the  department.  Mr. Bates  said  he  had  not                                                                    
received a copy of Version  S until today's meeting. A quick                                                                    
comparison  of Versions  R and  S showed  a continuation  of                                                                    
substantial problems.  He restated the  department's concern                                                                    
about  the   authority  and  purview  of   district  coastal                                                                    
policies.  It  is not  a  question  about who  approves  the                                                                    
enforceable policies,  but the  substance of  those policies                                                                    
that is the sticking point.  He said he would respond within                                                                    
the time frame requested.                                                                                                       
                                                                                                                                
4:03:06 PM                                                                                                                    
                                                                                                                                
DAN    EASTON,    DEPUTY   COMMISSIONER,    DEPARTMENT    OF                                                                    
ENVIRONMENTAL CONSERVATION,  reported that DNR is  not alone                                                                    
with concerns  about Version S,  which he had also  not seen                                                                    
until  today's meeting.  He said  DEC's concerns  had to  do                                                                    
with  the DEC  "carve out",  which the  last CS  removed. He                                                                    
said he would also get back to the committee.                                                                                   
                                                                                                                                
Co-Chair Hoffman  requested addressing  the concerns  of the                                                                    
state while including rural areas.                                                                                              
                                                                                                                                
4:04:51 PM                                                                                                                    
                                                                                                                                
LINDSAY  WOLTER,  DEPARTMENT  OF LAW  (via  teleconference),                                                                    
voiced  concern  about Version  R.  She  said she  has  only                                                                    
recently seen  Version S. She highlighted  legal concerns in                                                                    
sections common to  Version R and S. She  began with Section                                                                    
3  where the  department may  adopt regulations  approved by                                                                    
the board and  the board would be  responsible for approving                                                                    
the coastal management  regulations, coastal district plans,                                                                    
and   the   enforceable   policies  developed   by   coastal                                                                    
districts. She  maintained that it was  a significant amount                                                                    
of  work  for   nine  board  members,  of   which  four  are                                                                    
commissioners with full schedules.  It makes it difficult to                                                                    
have a quorum  and abolishes the ability  to write emergency                                                                    
regulations.                                                                                                                    
                                                                                                                                
4:07:35 PM                                                                                                                    
                                                                                                                                
Ms. Wolter turned to Section  11, which permits the board to                                                                    
develop  procedures  and  guidelines  for  consultation  and                                                                    
coordination   with  federal   agencies  managing   land  or                                                                    
conducting activities  potentially affecting  coastal areas.                                                                    
She   maintained   that   negotiations  with   the   federal                                                                    
government should not be conducted  by the board, but rather                                                                    
by  the  state,  as  it would  infringe  on  the  governor's                                                                    
executive powers.  Section 13  also has  a problem  with the                                                                    
mandate for  a consensus because  there is no  definition of                                                                    
what  "consensus" means.  There is  also lack  of transition                                                                    
language in the bill, meaning  that it is unclear what would                                                                    
happen with the existing  district plans and regulations and                                                                    
if  they would  remain  in effect  pending  approval of  new                                                                    
plans and regulations.                                                                                                          
                                                                                                                                
4:09:25 PM                                                                                                                    
                                                                                                                                
Ms. Wolter  reported that the  Department of Law  would have                                                                    
to  get  federal  approval  by  NOAA  for  any  new  coastal                                                                    
management  plans.   That  would  also   require  transition                                                                    
language, which the department  could provide. She concluded                                                                    
that  there  could  be additional  concerns  in  Version  S;                                                                    
however, she has not had time to study it.                                                                                      
                                                                                                                                
Co-Chair   Stedman  requested   that   Ms.  Wolter   provide                                                                    
recommendations for  language changes by noon  tomorrow. Ms.                                                                    
Wolter agreed to do so.                                                                                                         
                                                                                                                                
4:11:03 PM                                                                                                                    
                                                                                                                                
EDWARD  S.  ITTA,  MAYOR,  NORTH  SLOPE  BOROUGH,  spoke  in                                                                    
support of the  bill. He said that since  the governor would                                                                    
appoint  the board  members that  should take  care of  many                                                                    
concerns. He pointed  out that local districts  would have a                                                                    
voice with  the board  in place. He  said the  CS eliminates                                                                    
the  inclusion  of  inland  areas  and  includes  additional                                                                    
protection  so that  coastal policies  cannot conflict  with                                                                    
state or federal law. The  bill clarifies that draft permits                                                                    
are not needed  to start the consistency  review process. It                                                                    
also deletes "and  OCS waters" to avoid  confusion about the                                                                    
inclusion of  any new areas  or activities under  this bill.                                                                    
There  is a  new  section confirming  that proposed  federal                                                                    
rules on critical habitat  designations are reviewable under                                                                    
ACMP.                                                                                                                           
                                                                                                                                
4:13:54 PM                                                                                                                    
                                                                                                                                
HAROLD  CURRAN, CHIEF  ADMINISTRATION  OFFICER, NORTH  SLOPE                                                                    
BOROUGH,  addressed one  question,  whether  or not  federal                                                                    
Endangered  Species Act  activities  affecting coastal  zone                                                                    
areas are  subject to consistency.  He maintained  that they                                                                    
are  subject   to  consistency.  The  state   gets  to  make                                                                    
determinations  about  the  consistency of  federal  actions                                                                    
within the  coastal zone and  those that affect  the coastal                                                                    
zone. The  state argues that  local districts will  have the                                                                    
power to  veto state  and federal statutes  and regulations.                                                                    
The standard  for state consistency  standards does  not use                                                                    
the word  "veto" or  indicate that there  can possibly  be a                                                                    
veto  of either  federal  or state  law  under coastal  zone                                                                    
management. It gives the state  the ability to influence how                                                                    
the federal  government carries out  its regulations.  It is                                                                    
an extension of state power,  not a reduction. He noted that                                                                    
it applies to  the Endangered Species Act and  is a valuable                                                                    
authority for the state. He called  it an example of how the                                                                    
state should embrace coastal zone management.                                                                                   
                                                                                                                                
4:16:14 PM                                                                                                                    
                                                                                                                                
STEVE    BORELL,    ALASKA     MINERS    ASSOCIATION    (via                                                                    
teleconference),  referred  to  a  letter  provided  to  the                                                                    
committee.  He thought  that the  S  version corrected  some                                                                    
problems;  however, he  could not  support the  bill because                                                                    
concerns remain.                                                                                                                
                                                                                                                                
Co-Chair Stedman  asked for a  list of concerns.  Mr. Borell                                                                    
agreed to provide them.                                                                                                         
                                                                                                                                
AT-EASE        4:18:09 PM                                                                                                     
RECONVENED     4:32:17 PM                                                                                                     
                                                                                                                                
Co-Chair Stedman requested language  changes to Version S by                                                                    
noon tomorrow.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB 315 Proposed SCS Version R 041310.pdf SFIN 4/13/2010 9:00:00 AM
SFIN 4/13/2010 1:30:00 PM
SFIN 4/13/2010 2:30:00 PM
HB 315
SB 4 Governor's Departmental response to CSSB FIN Version S.pdf SFIN 4/13/2010 2:30:00 PM
SB 4
SB 4 Proposed CS FIN Version S 041310.pdf SFIN 4/13/2010 2:30:00 PM
SB 4