Legislature(2003 - 2004)
04/23/2003 03:35 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 143-COASTAL MANAGEMENT PROGRAMS CHAIR OGAN announced that he did not intend to move SB 143 out of committee today and he apologized in advance in case the committee is unable to hear from everyone who has signed up to testify. He said the committee would first hear a brief overview of what the legislation does and then put the proposed committee substitute (CS) on the table. SENATOR ELTON moved to adopt the proposed CS (labeled 03-0069 bil3.doc), and said that two committee members have a schedule conflict and will need to leave at 5:00 p.m. He said he is assuming that Department of Natural Resources (DNR) and Division of Governmental Coordination (DGC) staff will be available to answer questions at the next meeting. CHAIR OGAN said that paid staff can come back and that he planned to give priority today to citizens who are taking time off of work to testify. SENATOR DYSON said he believes it is unfortunate to schedule meetings while standing committees are scheduled to meet, especially when substantive bills are being discussed. He encouraged members to not schedule another meeting during standing committee hearings out of respect for those who have made an effort to testify. CHAIR OGAN announced he would give first priority to people who have flown to Juneau to testify. MS. MARTY RUTHERFORD told members she represents DNR and the Administration and would speak to the proposed CS. She said she recently left DNR after working for that department for 11 years and is now under contract with the department. She introduced Mr. Breck Tostevin with the Department of Law, Mr. Pat Galvin, the past director of DGC, and Mr. Randy Bates who is employed as the newly appointed Coastal Zone Management program coordinator in DNR. These people comprise the team that reworked SB 143 and made very substantive changes to the bill in response to comments received by the Administration while its companion bill, HB 191, was under review in the House. She informed members that a brief, one-page synopsis of the committee substitute, a transition timeline, a comparison chart and a sectional analysis were distributed to them. She then said she would provide an overview of the primary elements of the CS. CHAIR OGAN announced that no objection was heard to the adoption of the work draft, therefore the motion carried. He then noted that Senate President Therriault had joined the committee. MS. RUTHERFORD made the following comments. The Coastal Zone Management Program is an older program that has not appropriately responded to Alaska's maturing statutory and regulatory regime. Therefore, the program is often redundant, using local enforceable policies that are often a reiteration of existing regulatory agencies' permit standards. The program is also unpredictable. It is overly broad in scope, takes a long time, and delays the issuance of permits and start up of projects. The statewide standards and local enforceable policies are vague and are extremely subject to multiple interpretations. CHAIR OGAN announced that Representative Kerttula joined the committee. MS. RUTHERFORD continued. While the program has problems, the sweeping changes embedded in the original SB 143 eliminated many of the primary reasons that Alaska first embraced the Coastal Zone Management program, including state and local control over projects requiring federal authorization and state and local influence on direct federal activities. During discussions of the original bill on the House side, the Administration took some of the comments made by citizens and districts to heart. As a result, the committee substitute returns to the basic structure of the existing Coastal Zone Management program. It retains the existing four coastal resource service areas, all of which are located in the unorganized borough in Western Alaska. In addition, all existing coastal districts continue and retain the same authorities and responsibilities as under the current program. This committee substitute also retains local enforceable policies and all of the statewide standards of the program, including the habitat standard and the subsistence standard. Furthermore, it ensures that all federal activities, activities requiring a federal permit, or an activity requiring a state permit will have a consistency review. District enforceable policies will remain applicable to all projects that are subject to a consistency review, not just the Outer Continental Shelf (OCS) projects and federal activities that were envisioned in the original SB 143. The committee substitute assures the districts will retain their seat at the table as project decisions are made. The committee substitute, however, makes significant changes to the program in an attempt to retain the important elements while addressing the problems. It will: · eliminate the Coastal Policy Council and transfer its duties to the DNR commissioner · place a sunset provision on the current statewide standards and coastal district plans and mandate their replacement standards be clear, concise, and not susceptible to subjective interpretations and not duplicative of otherwise existing requirements · clarify that local enforceable policies may not address a matter that is regulated or authorized by state or federal law unless the policy specifically relates to a matter of local concern - a test will be embedded in the statute to assist in making that determination · provide important clarification to the consistency review process in order to ensure more predictable timelines and standards, including the scope of a project that is subject to review and when a project can proceed in phases, and it encourages the use of general permits · clarify that the Department of Environmental Conservation's (DEC) permits and authorizations will constitute the consistency determination for activities regulated by DEC air, land and water quality standards · insulate the Coastal Management Plan consistency review from delays associated with those complex permits and authorizations MS. RUTHERFORD told members the program is very complex. She offered to have Mr. Tostevin describe the sectional elements of the bill but noted in the interest of time, that information has been provided in written form. CHAIR OGAN said he would plan to hear from Mr. Tostevin on Friday. SENATOR LINCOLN requested a copy of Ms. Rutherford's testimony. CHAIR OGAN took public testimony. MR. KEN DONAKOWSKI, the Alaska permitting manager for Conoco Phillips, told members that Conoco Phillips is the state's largest producer of oil, leaseholder, and most aggressive explorer. As such, permit streamlining is imperative to maintain Conoco Phillips' enviable position in Alaska and to encourage other oil and gas firms to elevate their respective standing in these three areas. Conoco Phillips unequivocally supports AOGA's position on the committee substitute. He offered two observations. This committee substitute preserves a role for the coastal districts and formally introduces the concept of enforceable policies into the statutory language. Second, the regulatory framework for environmental protection in Alaska is preserved by this committee substitute and, in essence, that framework remains whole and intact. SENATOR ELTON noted Mr. Donakowski said this legislation will empower coastal districts by introducing the concept of enforceable policies and asked him to elaborate because many people from the coastal district side are confused about that. MR. DONAKOWSKI said enforceable policies are policies that, according to the criteria laid out in the statute, are issues of importance to local concerns that do not duplicate the regulatory framework. CHAIR OGAN thanked Mr. Donakowski for Conoco Phillips' aggressive posture in exploration and development and for introducing cutting edge technology. MR. LARRY HOULE, general manager of the Alaska Support Industry Alliance, told members the Coastal Zone Management Program includes the consistency review process, which requires all projects located in the coastal zone to obtain a consistency determination before state or federal permits can be issued. Nearly all oil and gas activities undergo the consistency review process. Its purpose is to ensure that projects are consistent with state and local enforceable policies. Funding for exploration and development in Alaska faces increasing competition on a worldwide scale. Many competing projects are closer to markets and are less capital intensive. Operators need reliable predictions, permitting schedules, and requirements. Delays in the permit timelines are significant factors that can adversely affect the economic feasibility of a project. The contracting community in Alaska is concerned about the lack of schedule and scope certainty and the unpredictability and subjective nature of the overall review process that currently exists. He said the Alliance endorses the committee substitute; it believes it will streamline the review process and improve predictability. MR. BOB STINSON, President of Con-Am Construction of Anchorage, stated support for the committee substitute or any other form of the bill that will change the current process. The current Coastal Zone Management Program's rules and process are unclear and need to be fixed so that an applicant with a beneficial project knows what to expect when submitting an application. He sat on the Governor's DNR transition team and listened to large corporations and local companies express frustration over the current review process. The transition team recommended streamlining that process. He then described an experience his company encountered as follows. Anchorage Fueling and Service Company, a consortium of 22 major airlines, hired his company to replace a small, aging pipeline routed through residential streets in Anchorage. That pipeline delivered most of the jet fuel to the Ted Stevens International Airport. His company was hired to design and build a larger pipeline to reliably meet increasing demand. His company submitted its permit application to the state, the U.S. Corps of Engineers and the Municipality of Anchorage (MOA), after preliminary discussion with each entity revealed the soundness of the project and, in particular, the routing of the pipeline. The project quickly became a target for environmental concerns since the routing took the new pipeline through portions of the Anchorage coastal mud flats. Throughout the next 1 1/2 years, his company spent an additional $1.5 million securing the permit, due to delays in the Coastal Zone Management process. The project was originally estimated to cost $6 million. MR. STINSON said in fact, there was no process. DGC did not know how to handle the application and how to coordinate with other agencies and the public. He ended up hiring many consultants to invent a process for permit review and coordination. DGC had no clear timetable or time limitations for permit review. Phasing of the project was not allowed. All agency permits had to be completed before a consistency determination could be issued. There was no scope of review to which anyone could work with. He said this project was not a resource extraction project; it was an infrastructure improvement project for the airport. He said had the State of Alaska owned the old pipeline, a permit would have been issued in an expeditious way, allowing the airport to meet its growing demand for fuel. The airlines that experienced this permitting nightmare could not understand why the state was not supportive of this beneficial project and talked about taking their business elsewhere. He encouraged members to move the bill from committee. MR. CHUCK DEGNAN, testifying from Unalakleet, told members the Bering Straits Coastal Resource Service Area was very concerned about the original bill that eliminated coastal resource service areas. Its other concern is the sunset provision for making new plans. The rural areas have clean air, water and land because of very little development. However, the development that does occur takes a long time because it is planned so that projects flow. Very few have been delayed. MR. DAN BEVINGTON, Coastal District Coordinator for the Kenai Peninsula Borough, said he recognizes that writing legislation to streamline permitting is a challenging task, and thanked members and the Governor for attempting it. He said the Kenai Peninsula Borough has supported its own, similar program for more than two decades. During that time, the Borough has passed over 34 ordinances and 7 resolutions that directly support the coastal resource management program. MR. BEVINGTON said the legislation asserts that local governments should exert their own coastal management control through planning and zoning powers. That seems to add a level of complexity when the Borough does not need to assert any more permitting powers through its participation in the program. The Borough appreciates the fact that the current working draft addresses that and allows the Borough that opportunity. However, the Kenai Peninsula Borough remains concerned about the loss of similar policies under the provision that DEC will have the exclusive determination of consistency of the program under its authorities. It is also concerned about the summary discharge of the Alaska Coastal Policy Council without developing a similar representative body within DNR. The issue of promoting and balancing economic development with long-term community interests demands the meaningful involvement of communities across the state. MR. GARY CARLSON, Senior Vice President of Forest Oil and a member of AOGA, stated support for AOGA's position but added the following comments. The ACMP process has become a regulatory maze that is costly to the state and to industry. The program's ambiguities and uncertainties have provided a breeding ground for obstructionists and special interest litigants to delay responsible development. The bill will make substantial improvements to the process by establishing deadlines, eliminating duplication of state and federal law, establishing a bright line as to when the ACMP applies, and eliminating delays in consistency determinations. It also requires the ACMP standards to be clear, precise and not subject to multiple, subjective interpretations. This should improve the efficiency of the permitting process and reduce litigation exposure of the state and the industry. He stated support for the legislation. MS. LISA LOMBARGEN informed members the City of Valdez and the coastal district is very pleased with the Administration's efforts to listen to the concerns of the coastal district about participation and to provide a level playing field as the permits are being reviewed for consistency. MR. BOB SHAVELSON, Executive Director of Cook Inlet Keepers, told members he was speaking on behalf of over 500 members throughout Southcentral Alaska. He made the following points. Regarding Ms. Rutherford's comment that districts would retain their same authorities, Section 14 will clearly eliminate a vast extent of local district authorities. It will be virtually impossible for local districts to have policies that will meet the convoluted and legalistic language in Section 14. He suggested to the House Resources Committee that it request examples of what acceptable local enforceable policies will look like. He also suggested the ability to review a mark-up of the Kenai Peninsula Borough coastal management enforceable policies and which ones would be retained under this legislation. He does not believe many of those policies, if any, will remain intact. Although SB 143 has a zero fiscal note, it has taken the State of Alaska over 15 years to approve all of the coastal management programs. SB 143 will create a considerable financial burden on local districts. It is an unfunded mandate that will require these districts to rewrite the plans they spent many years and dollars to develop. Regarding the timeline, MR. SHAVELSON said it does not include time for the environmental impact statement process under the National Environmental Policy Act. This is an extensive policy change, along with the elimination of the Coastal Policy Council. This will require an extensive, time consuming environmental impact statement for the entire state coastal program. He said SB 143 will add complexity and confusion because as local district authorities are removed, it will encourage the adoption of local ordinances. Therefore, one-stop permitting will no longer be available so industry will have to get state permits and local approvals. TAPE 03-32, SIDE A SENATOR BEN STEVENS asked Mr. Shavelson to repeat the terminology he used to describe the Kenai Borough's policy requirements that the state would not adopt under this program. MR. SHAVELSON said he was referring to Section 14 of the pending legislation, which includes some very restrictive and legalistic jargon that will make it difficult for local districts to adopt local enforceable policies. VICE-CHAIR WAGONER asked Mr. Shavelson if Cook Inlet Keeper has 500 members or whether they are members of other organizations that Cook Inlet Keeper represents. MR. SHAVELSON said they are members of Cook Inlet Keeper. MS. DANA OLSON, testifying from the Mat-Su Valley, told members that HB 257 relies on issues of right-of-way. VICE-CHAIR WAGONER interrupted to ask Ms. Olson to restrict her testimony to the bill before the committee. MS. OLSON clarified that she is speaking about the rights-of-way in the coastal area. She told members she is concerned when the land use plans do not have the rights-of-way included, and the legislature is passing other bills that affect the coastal zone, because she does not have the means to have adequate notice. She noted that an enforceable policy is defined by the federal act and it does not include zoning and planning. It says that judicial decisions are enforceable policies, as well as constitutional provisions. Therefore, zoning not based on the constitutional or judicial standards would not be enforceable policies of the local district. She said the Clean Water Act does not limit the scope of which local concern is on non-source point pollution. She noted the 1990 amendment to the Coastal Zone Management Act said the act had to consider the zone as a whole. Considering only local enforceable policies would violate that. VICE-CHAIR WAGONER announced that he would hold the bill in committee and it would be heard again on Friday, at which time the committee would take public testimony. He then adjourned the meeting.