Legislature(2003 - 2004)

04/25/2003 03:32 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SB 143-COASTAL MANAGEMENT PROGRAMS                                                                           
CHAIR  OGAN announced  that  a  joint session  of  the House  and                                                               
Senate was scheduled  at 4:30 today so he would  give priority to                                                               
those who signed up to testify.   He noted that he did not intend                                                               
to pass SB  143 out of committee  today but hoped to  do so early                                                               
next week.                                                                                                                      
MS.  JUDY BRADY,  Executive Director  of the  Alaska Oil  and Gas                                                               
Association  (AOGA),  thanked  both the  Administration  and  the                                                               
Legislature  for their  commitment to  reform the  Alaska Coastal                                                               
Management Program. AOGA shares that commitment. She gave the                                                                   
following testimony:                                                                                                            
     At the last Senate  Resources hearing, three very basic                                                                    
     questions were asked. What are  the problems with ACMP?                                                                    
     How  serious  are  these  problems?  Are  they  serious                                                                    
     enough to  warrant the  time, effort  and uncertainties                                                                    
     associated with changing a complex program?                                                                                
     We've been  asking ourselves these questions  for quite                                                                    
     awhile  and in  the ten  years  that I've  been in  the                                                                    
     association,  we  have  been  through  four  regulatory                                                                    
     processes where we tried to  - where the attempt was to                                                                    
     change things  in the ACMP that  people believed needed                                                                    
     changing. That's  about seven  years out of  a ten-year                                                                    
     career.  At the  end  of the  last three-year  process,                                                                    
     which was last year, we  looked at the issues that were                                                                    
     still on the table and we asked ourselves:                                                                                 
        · Is it a  problem that it is still  not possible to                                                                    
          develop  a reliable  time  line  for the  existing                                                                    
          ACMP permit process?                                                                                                  
        · Is it a  problem that it's not  possible for state                                                                    
          agencies to tell  a company how long  it will take                                                                    
          to get a permit for  a proposed project because of                                                                    
        · Is it  a problem  that the  ACMP standards  are so                                                                    
          vague that  a company  has virtually  no certainty                                                                    
          as to  whether a proposed  project is going  to be                                                                    
          in  or   out  of  a  lengthy   consistency  review                                                                    
          project? We  had three companies in  that position                                                                    
          last year.                                                                                                            
        · Is  it  a  problem  that  ACMP  does  not  require                                                                    
          scheduled discipline and, in  practice, has been a                                                                    
          major source of delay?                                                                                                
        · Is  it a  problem  that every  major  oil and  gas                                                                    
          development  project on  the  North  Slope and  in                                                                    
          Cook  Inlet has  been, at  some time,  in schedule                                                                    
          limbo  because of  ACMP and  two  years ago  every                                                                    
          single project on the North Slope was in limbo?                                                                       
        · Is  it  a problem  that  there  are numerous  AG's                                                                    
          opinions, many  of them  contradictory, attempting                                                                    
          to interpret the ACMP?                                                                                                
        · Is  it  a  problem   that  third  party  lawsuits,                                                                    
          administrative actions  and petitions  arising out                                                                    
          of multiple interpretations of ACMP have steadily                                                                     
        · Is it a problem that every oil and gas company                                                                        
          investing  in Alaska  with experienced  permitting                                                                    
          staff consider the ACMP  the single most confusing                                                                    
          and uncertain  regulatory program in the  state or                                                                    
          in any  other oil  and gas development  state they                                                                    
          have experienced?                                                                                                     
     I  don't  know  how  any  of  you  would  answer  these                                                                    
     questions but I can tell  you how the management of our                                                                    
     17  companies  answered   these  questions.  Are  there                                                                    
     problems  with   the  ACMP  process?  Yes.   Are  these                                                                    
     problems  serious enough  to warrant  the time,  effort                                                                    
     and risk  of uncertainty to address?  Yes. The question                                                                    
     today is  does the  CS for SB  143 solve  these serious                                                                    
     problems  and our  answer is  yes and  no. I'll  do the                                                                    
     'nos' first.                                                                                                               
     AOGA's  members   had  preferred  a   completely  self-                                                                    
     implementing  coastal   program  that   was  originally                                                                    
     envisioned.  That is,  once a  project or  activity met                                                                    
     all  the   requirements  for  state   permits,  federal                                                                    
     permits, local  ordinances, then it  became consistent.                                                                    
     It was automatically consistent.  We believe this was a                                                                    
     choice the state could make  under the federal program.                                                                    
     We  believe  it  still  had  a  role  for  the  coastal                                                                    
     districts  so they  could  maintain  their funding  and                                                                    
     their studies and  we believed it would  work in Alaska                                                                    
     because  we have  the most  comprehensive environmental                                                                    
     laws in  the country -  in the  United States -  and we                                                                    
     should be  able to rely  on our laws  for environmental                                                                    
     protection   for   coastal   resources   or   resources                                                                    
     everywhere, inland or coastal.                                                                                             
     However,  under the  CS, coastal  districts  are to  be                                                                    
     given   direct   legislative   authority   to   propose                                                                    
     enforceable policies that will  have the full effect of                                                                    
     state  law for  matters  of local  concern. There  will                                                                    
     continue  to be  consistency reviews.  Under the  self-                                                                    
     implementing   program,  there   would  no   longer  be                                                                    
     consistency  reviews. For  a  permitted community  this                                                                    
     means that in addition  to meeting the local ordinance,                                                                    
     state laws  and federal  laws, which  take over  a year                                                                    
     and involve multiple  opportunities for public comments                                                                    
     and public  hearings, we're still  going to have  to go                                                                    
     through a consistency review.                                                                                              
     The CS marks the first  time an Alaska statute directly                                                                    
     uses  the term  'enforceable  policy'  and gives  those                                                                    
     enforceable  policies the  same standing  as state  and                                                                    
     federal   law  without   benefit  of   the  legislative                                                                    
     process. This  is a significant  grant of  authority to                                                                    
     local coastal  districts. The oil  and gas  industry is                                                                    
     already subject  to a  wide array  of local,  state and                                                                    
     federal  laws,   each  with  its  own   review,  public                                                                    
     comment,  and  stipulation   requirements  and  we  are                                                                    
     necessarily  wary of  the state  formally adopting  yet                                                                    
     another layer  of requirements. It is  puzzling to hear                                                                    
     that  coastal  districts believe  the  Administration's                                                                    
     proposal  is  a taking  of  local  authority. In  sharp                                                                    
     contrast  to that  view, it  is our  belief that  it is                                                                    
     instead  a  significant  grant   of  power  to  coastal                                                                    
     This summarizes our  primary concern and disappointment                                                                    
     with the CS. However,  while continuing to be concerned                                                                    
     about  these  two issues,  we  recognize  that this  CS                                                                    
     contains  solutions   to  some  of  the   most  serious                                                                    
     problems  plaguing the  coastal management  program and                                                                    
     we  do  recognize  the state's  interest  in  the  role                                                                    
     coastal districts  have with the ACMP  - mainly because                                                                    
     Marty Rutherford's  just been beating us  over the head                                                                    
     with it so we see that that's an important thing.                                                                          
     Here's  why  we  are  going  to  support  this  CS.  It                                                                    
     establishes  a   timeline  to  complete   the  required                                                                    
     consistency  review.  It's  a 90-day  timeline  with  a                                                                    
     possible  subsequent review  of 45  days and  that adds                                                                    
     about five months. It could  add as much as five months                                                                    
     or more to a permitting  process but that's better than                                                                    
     an  open-ended  loop.  We  do  note  that  the  current                                                                    
     timeline  is supposed  to  be  50 days  so  this is  an                                                                    
     additional  30-60-90 days.  It eliminates  inconsistent                                                                    
     and duplicative  application of  state and  federal law                                                                    
     by local districts.                                                                                                        
     Last year  the legislature  passed SB 308,  stating the                                                                    
     legislature's    decision    that   coastal    district                                                                    
     enforceable policies could not  duplicate state law and                                                                    
     regulation.  Local  districts  had a  year  to  rewrite                                                                    
     their  policies  to  avoid this  duplication.  This  CS                                                                    
     reiterates  that  decision  and  further  directs  that                                                                    
     local  enforceable  policies  cannot  duplicate  either                                                                    
     state or federal laws or  regulations so right now many                                                                    
     of the  coastal districts are  or should be  working on                                                                    
     their  enforceable policies  so they  do not  duplicate                                                                    
     state law. [Indisc.]                                                                                                       
     It establishes  a clear line  as to where  ACMP applies                                                                    
     and  where it  does not.  If  a project  is inside  the                                                                    
     coastal  zone, the  ACMP applies.  If it's  outside, it                                                                    
     does not. Right  now we're being told  by ACMP managers                                                                    
     on occasion  they don't know  if a project's in  or out                                                                    
     so  we should  go ahead  and do  the coastal  review so                                                                    
     they  don't get  sued and  we  don't get  sued. Well  a                                                                    
     coastal review takes  up to a year.  It recognizes that                                                                    
     DEC  air,   land  and  water  permits   are  inherently                                                                    
     consistent.  This  was  actually   the  intent  of  the                                                                    
     original ACMP  statute and it  was in the first  set of                                                                    
     regulations - it was just never implemented.                                                                               
     The DEC  air, land and water  permits are comprehensive                                                                    
     and   technically   complex  permits   with   statutory                                                                    
     timelines    and    public   comment    periods.    The                                                                    
     Administration's current  proposal recognizes  that DEC                                                                    
     statutes   and   regulations    are   on   their   face                                                                    
     sufficiently    comprehensive   to    protect   coastal                                                                    
     resources  and  do   not  need  additional  consistency                                                                    
     review.  The  new  CS also  requires  state  and  local                                                                    
     enforceable     standards     be    clear,     precise,                                                                    
     understandable    and    not   open    to    subjective                                                                    
     interpretation and we believe  that's fair. It replaces                                                                    
     the  coastal  policy  council with  the  Department  of                                                                    
     Natural  Resources,  a  line agency  that  is  directly                                                                    
     accountable   to    the   legislature   and    to   the                                                                    
     Administration and is charged  with balancing local and                                                                    
     statewide interests.                                                                                                       
     And, finally, the proposed legislation  lays out a work                                                                    
     plan that  will involve public participation  by all of                                                                    
     the stakeholders over the next  two years. We were very                                                                    
     concerned at first that this  was going to move so fast                                                                    
     that  people would  not be  able to  sit down  and talk                                                                    
     about how this was going to  go forward.  DNR now has a                                                                    
     year, from  the time  this legislation passes,  to come                                                                    
     up  with new  state  standards that  will  be a  public                                                                    
     process  and  to  have new  direction  to  the  coastal                                                                    
     districts about  how to come  up with their  plan. That                                                                    
     will  be  a public  process.  Then  the districts  have                                                                    
     another year to come up  with theirs so we believe that                                                                    
     the two years,  with all of the experience  we have had                                                                    
     with  coastal zone  since 1980  will be  sufficient for                                                                    
     all of the public stakeholders  to be involved and move                                                                    
     forward with a good program.                                                                                               
     Because  the  significant   improvements  outweigh  our                                                                    
     concerns,  the  Alaska  Oil   and  Gas  Association  in                                                                    
     general supports  the Administration's proposal  and we                                                                    
     support this  bill going forward.  I would, just  for a                                                                    
     second,  like  to  say it's  worth  reflecting  on  the                                                                    
     concept  of coastal  district enforceable  policies. As                                                                    
     Alaskans,  we  have  always  prided  ourselves  on  the                                                                    
     comprehensiveness of  our state environmental  laws and                                                                    
     regulations.  Legislators  represent both  their  local                                                                    
     areas  and  the  statewide   concern  since  we've  had                                                                    
     statehood. The  real expectation  should be  that there                                                                    
     will be  no need  for many,  if any,  local enforceable                                                                    
     policies.  A  perfect  environmental  report  card  for                                                                    
     Alaska  and  a  compliment   to  all  past  legislators                                                                    
     representing  the coastal  districts would  be if  each                                                                    
     coastal   district  can   conclude  that   their  local                                                                    
     concerns  are protected  under existing  state law  and                                                                    
     federal law.  Each new  enforceable standard  should be                                                                    
     viewed  as  a  heads  up to  the  legislature  that  an                                                                    
     important  environmental concern  is not  now protected                                                                    
     by state statutes.                                                                                                         
     Thank you for your time.  We urge that this legislation                                                                    
     be passed this  session so work on  the state standards                                                                    
     and  the   local  district  plans  can   begin  and  be                                                                    
     concluded  within  the  next   three  years.  I  cannot                                                                    
     overemphasize how  important fixing this program  is to                                                                    
     the companies  that do  business here  and I  thank you                                                                    
     very much for your consideration.                                                                                          
SENATOR ELTON  pointed out  the Juneau  Assembly worked  with the                                                               
U.S. Corps  of Engineers over  a long period  of time to  come up                                                               
with a flexible local policy  rather than a rigid federal policy.                                                               
The Juneau  Assembly policy designated four  different categories                                                               
of  wetlands that  enabled Juneau  to accomplish  development and                                                               
expand the  tax base  in an  environmentally sensitive  way. That                                                               
policy  sped  up  development. He  expressed  concern  that  this                                                               
legislation  will  preclude  the  use  of  a  similar,  flexible,                                                               
innovative process  to speed development.  He asked Ms.  Brady if                                                               
she agrees.                                                                                                                     
MS. BRADY said she discussed that  matter with Peter Freer of the                                                               
City  and   Borough  of  Juneau   an  hour  ago.  She   said  her                                                               
understanding is the issue is  about situations in which both the                                                               
local  district  and the  state  have  identical regulations  but                                                               
interpret them  differently for  the same  project. She  said she                                                               
believes what Senator Elton is  referring to is a situation where                                                               
there has  been a delegation  of authority to the  local district                                                               
from  the  U.S.   Corps  of  Engineers  and   that  is  different                                                               
altogether.  She   said  she  would   check  to  make   sure  her                                                               
understanding is correct.                                                                                                       
CHAIR OGAN announced that all members were in attendance.                                                                       
SENATOR  ELTON said  he believes  there is  confusion surrounding                                                               
the definition  of an enforceable  policy and asked Ms.  Brady to                                                               
provide AOGA's interpretation.                                                                                                  
MS.  BRADY   said  she   believes  everyone   is  coming   to  an                                                               
understanding  of  that  term  right  now.  AOGA  understands  an                                                               
enforceable policy  to have the  same effect  as a state  law. It                                                               
will bind  a private developer  on state  or federal land,  on or                                                               
offshore. In that  sense, it has the same power  and authority as                                                               
a  state or  federal law.  A proposal  for an  enforceable policy                                                               
must be made to and approved  by DNR. Whether a project meets the                                                               
consistency  determination  will  depend   upon  it  meeting  the                                                               
requirements  in the  enforceable policy.  An enforceable  policy                                                               
must be  very specific  about what must  be protected.  It cannot                                                               
cover  the same  area  as one  covered by  state  law. The  local                                                               
district will  have to successfully  argue that state  or federal                                                               
law does not already protect a matter of local concern.                                                                         
SENATOR ELTON asked if that argument  would be made to DNR rather                                                               
than a coastal policy council.                                                                                                  
MS. BRADY said that is her understanding.                                                                                       
CHAIR  OGAN  thanked  Ms.  Brady  and  asked  Ms.  Gilbertson  to                                                               
MS.  SARA  GILBERTSON, Policy  and  Program  Coordinator for  the                                                               
Alaska  Municipal  League (AML),  said  all  AML members  support                                                               
permit streamlining  and economic development in  Alaska. The AML                                                               
sees  companies like  BP investing  in Russia  and wants  that to                                                               
occur  in  Alaska,  but  feels  it  is  necessary  to  create  an                                                               
appropriate  balance between  local government  participation and                                                               
authority  and economic  development.  The AML  has been  working                                                               
with the  Administration on SB  143 since it was  introduced. The                                                               
Administration  extended  some  of  the timelines  at  the  AML's                                                               
request.  Although   the  AML  believes   the  CS  is   a  marked                                                               
improvement  over  the  original  bill,  AML  continues  to  have                                                               
MS. GILBERTSON  explained that AML's first  concern is separating                                                               
DEC from  the consistency  review process.  Under this  move, the                                                               
issuance of  a DEC  permit will equal  consistency with  the ACMP                                                               
program.   Despite  AOGA's   statement  about   local  government                                                               
participation,  the  AML  believes  the CS  will  diminish  local                                                               
government involvement  in the process. The  AML's second concern                                                               
with SB  143 is funding.  Communities will have to  rewrite their                                                               
local enforceable policies  to meet criteria laid  out in Section                                                               
14. That section contains three  benchmarks: the policies must be                                                               
clear, concise,  and non-duplicative. It will  take communities a                                                               
lot of time and effort  to rewrite their policies. Some districts                                                               
must hold  hearings in 8 to  10 villages. The AML  would like the                                                               
legislature to provide  some funds to help with  this process. In                                                               
addition, the  local match has  been increased.  Many communities                                                               
have said  they understand that  changes need  to be made  but if                                                               
this legislation  passes, they  will be  paying more  and getting                                                               
less. Some  communities feel the  criteria in Section 14  are too                                                               
restrictive  and   will  be  difficult  to   meet,  leaving  some                                                               
communities without local enforceable policies.                                                                                 
MS. GILBERTSON said the AML's  last and most important concern is                                                               
language in Section  22 that says if a consistency  review is not                                                               
completed  within 90  days,  the activity  subject  to review  is                                                               
presumed  consistent.  The AML  sees  that  provision as  a  huge                                                               
loophole  that will  allow  industry to  stall  the process.  She                                                               
pointed  out  a problem  could  arise  when more  information  is                                                               
requested by a community. In  that circumstance, the clock on the                                                               
consistency review can  stop but the 90-day clock  does not stop.                                                               
She discussed this matter with  Administration officials who said                                                               
their  intent  is  that  if  a community  does  not  receive  the                                                               
necessary  information or  an  appropriate  response, the  review                                                               
should be  terminated. She expects the  Administration to testify                                                               
about  its  intent  today.  She   questioned  the  outcome  if  a                                                               
community sued over that language in  court and said the fact is,                                                               
the language in Section 22 is very  clear so even if a judge went                                                               
to the  legislative record  to find  the legislative  intent, the                                                               
judge  might  hear  the  Administration's   intent  but  not  the                                                               
Legislature's intent.                                                                                                           
CHAIR  OGAN noted  that he  spent 25  years in  a private  sector                                                               
contracting business  and found the  job always takes  the amount                                                               
of time  given, no matter  how much time that  is. He said  if he                                                               
did not  finish a  job, he  paid a penalty,  so he  finished many                                                               
jobs at  the 11th hour. He  said industry wants a  linear process                                                               
and  has  expressed  frustration   that  the  coastal  management                                                               
process is an open book with  many delaying tactics. He asked Ms.                                                               
Gilbertson  to  clarify  her   statement  that  applicants  might                                                               
intentionally drag the process to the very end.                                                                                 
MS. GILBERTSON said  she understands the need for  a timeline and                                                               
believes it is  reasonable to require the process  to be finished                                                               
in 90  days. However,  communities are faced  with the  fact that                                                               
the  clock will  not stop  even though  they encounter  a problem                                                               
during   that  time.   If  the   process   is  intentionally   or                                                               
unintentionally  stalled,  AML  is concerned  the  activity  will                                                               
automatically be deemed consistent after 90 days.                                                                               
CHAIR  OGAN asked  what would  happen if  the community  says the                                                               
activity is not consistent.                                                                                                     
MS. GILBERTSON said a community's  comments would count, insomuch                                                               
as it  has a local  enforceable policy and  a seat at  the table,                                                               
but a problem  could arise if a community has  questions and asks                                                               
for more information  from the applicant. Nothing is  built in to                                                               
the 90-day timeline to allow that clock to stop.                                                                                
4:00 p.m.                                                                                                                     
SENATOR  BEN STEVENS  asserted that  Section 22  requires that  a                                                               
position  be taken  in  90 days;  otherwise the  time  to take  a                                                               
position runs out.  He asked Ms. Gilbertson if the  AML is asking                                                               
for an unlimited time in which to declare a position.                                                                           
MS. GILBERTSON said  it is her understanding that  after 90 days,                                                               
regardless of  what happens  during those  90 days,  the activity                                                               
subject  to  review will  be  considered  to be  consistent.  She                                                               
repeated that AML members feel that is a problem.                                                                               
CHAIR  OGAN  said at  the  end  of  90  days, a  community  could                                                               
recommend  the activity  not be  approved  because all  necessary                                                               
information is not  available. He stated the  applicant should be                                                               
motivated  to  cooperate so  that  it  does  not get  a  negative                                                               
response from the community.                                                                                                    
MS.  GILBERTSON asked  that either  Bill Jeffers  or Randy  Bates                                                               
comment on how that would work.                                                                                                 
SENATOR  BEN   STEVENS  noted   subsection  (0)(2)   provides  an                                                               
exception that  says, "if the applicant  has requested additional                                                               
time to complete the review."                                                                                                   
MS. GILBERTSON said she is advocating for the communities.                                                                      
SENATOR  BEN STEVENS  stated that  Ms. Gilbertson  is making  the                                                               
assumption  that  the applicant  will  not  be working  with  the                                                               
MS. GILBERTSON  said in some  cases, the community  and applicant                                                               
have different interests.                                                                                                       
SENATOR BEN STEVENS said he  would take the position the language                                                               
will  force  the  community  to  work  in  cooperation  with  the                                                               
applicant and, if  a problem arises, the  applicant would request                                                               
an extension of  the deadline. He said it has  been the other way                                                               
around  in the  past. He  then noted  that Ms.  Gilbertson stated                                                               
earlier  that  the  CS  diminishes  local  involvement  and  that                                                               
communities feel  they will pay more  and get less. He  asked her                                                               
to clarify what the communities will get less of.                                                                               
MS.  GILBERTSON  said   she  was  referring  to   the  fact  that                                                               
communities were notified  this week of an increase  in the local                                                               
match  amount. Her  point  was that  some  communities are  upset                                                               
about  this bill.  They understand  they  will not  have as  many                                                               
local enforceable  policies as they  currently have  because they                                                               
will have to  meet a set of criteria that  is outlined in Section                                                               
14. They will not have the  same role they had in DEC permitting.                                                               
In those  two instances, local  government participation  will be                                                               
somewhat diminished.  Some AML members  are questioning  why they                                                               
will be paying more and not getting as much as they did.                                                                        
SENATOR BEN STEVENS said under  the present scenario the state is                                                               
paying the local  governments to put on  more onerous regulations                                                               
than the  state has  already imposed. The  state already  pays to                                                               
impose state  and federal regulations, and  local communities are                                                               
asking  the   state  to  pay   for  them  to   impose  additional                                                               
regulations. He  said he believes that  is a waste of  money from                                                               
the state's standpoint.                                                                                                         
MS. GILBERTSON  stated it is  a fact that local  participation in                                                               
the Coastal Zone  Management Program as it  currently exists will                                                               
be  diminished if  this bill  passes. The  local communities  are                                                               
only  saying that  they are  being asked  to rewrite  these local                                                               
enforceable  policies and  will need  help. She  noted this  is a                                                               
federal, state and local partnership  and everyone contributes to                                                               
the  "pot." This  week,  local communities  found  out the  local                                                               
match  increased.  The  match  increase  was  unrelated  but,  in                                                               
conjunction with this  bill, some communities feel  they would be                                                               
paying more yet will have less involvement.                                                                                     
SENATOR BEN STEVENS  asked Ms. Gilbertson if  she is representing                                                               
all municipal governments.                                                                                                      
MS.  GILBERTSON  said the  AML  represents  140 communities.  The                                                               
communities she has  been in contact with  about this legislation                                                               
are coastal service areas.                                                                                                      
CHAIR  OGAN   said  he  recognizes  local   involvement  will  be                                                               
diminished but he  does not believe that will be  a bad thing. He                                                               
said the  state has an  interest in protecting  subsurface rights                                                               
and has  allowed local  communities to  become regulators  of oil                                                               
and gas.  He believes this bill  reflects a shift in  policy that                                                               
allows local  communities to have a  say but not to  regulate and                                                               
harm the state's ability to access subsurface rights.                                                                           
SENATOR  BEN STEVENS  said he  does not  see this  legislation as                                                               
diminishing  local  participation  because the  bill  allows  two                                                               
years for  the process, including public  participation. However,                                                               
after that  time during  which everyone  comes to  agreement, the                                                               
policies  cannot  be  changed.  He   said  he  and  industry  are                                                               
frustrated that the  process changes and there  is no consistency                                                               
review. He  said he  strongly disagrees  that local  control will                                                               
not play a part.                                                                                                                
MS. GILBERTSON  said her  point about  Section 14  was that  if a                                                               
community has  100 local  enforceable policies,  it will  have to                                                               
make sure those  policies meet the criteria if  this bill passes.                                                               
If  only  five  of  those   policies  meet  the  criteria,  local                                                               
participation  will be  diminished because  the state  is telling                                                               
communities  how  those  local  enforceable  policies  should  be                                                               
SENATOR  BEN STEVENS  said maybe  95 of  those local  enforceable                                                               
policies are encompassed in federal or state requirements.                                                                      
SENATOR  ELTON  commented  that  he  finds  Section  14  and  the                                                               
definition  of "local  enforceable  policy" to  be confusing  and                                                               
asked if local governments are as confused as he is.                                                                            
MS. GILBERTSON said they are  somewhat confused. It is unclear to                                                               
them how  to scientifically demonstrate that  a local enforceable                                                               
policy is  of local concern and  they are concerned about  how to                                                               
pay  for a  scientist  to  do that.  She  said  she believes  the                                                               
Administration will  expand upon that language  as it promulgates                                                               
SENATOR SEEKINS  referred to a  chart of the current  process and                                                               
said  its  circular  action  is  a good  reason  for  the  90-day                                                               
MS. GILBERTSON  said she understands everyone's  frustration with                                                               
the fact that there is no  timeline, however, the problem is that                                                               
after   90  days,   the   activity   will  automatically   become                                                               
SENATOR  SEEKINS  said  unless  AML  can  say  what  timeline  is                                                               
appropriate, he plans to support  the 90 day provision because it                                                               
will spur a decision within a time certain.                                                                                     
CHAIR OGAN  noted that Senator  Seekins was referring to  a chart                                                               
provided by AOGA about the ACMP regulatory process.                                                                             
SENATOR LINCOLN stated she does not  want to rely on a chart that                                                               
DNR did not submit and that others have not seen or agreed with.                                                                
CHAIR  OGAN  thanked  Ms.   Gilbertson  and  took  teleconference                                                               
MR.  ALAN  JOSEPH,  Association  of  Village  Council  Presidents                                                               
(AVCP)  in Bethel,  asked how  communities that  are governed  by                                                               
tribal councils will be provided for in the legislation.                                                                        
MR. PAT  GAVIN, former director  of the Division  of Governmental                                                               
Coordination,  stated  the  program  has  never  included  tribal                                                               
governments as  a recognized  part of  the program.  He clarified                                                               
that  the  coastal resource  service  area  that encompasses  the                                                               
Yukon  Kuskokwim  area  is  intended  to speak  for  all  of  the                                                               
residents of the area, not just the municipalities.                                                                             
MR. JOSEPH said communities that  are run by tribal councils will                                                               
continue to voice opinions on projects.                                                                                         
TAPE 03-33, SIDE B                                                                                                              
MR. WILBER NAPAYONAK,  Secretary of the Koyuk  City Council, said                                                               
right now  rural areas do  not have revenue  generating resources                                                               
available  to draw  from for  the  increase to  the local  match.                                                               
Rural communities  are struggling to  survive. The City  of Koyuk                                                               
is  struggling  to secure  funds  to  operate and  maintain  city                                                               
business.  He pointed  out that  all local  concerns are  derived                                                               
from  residents of  the  community.  He said  the  elders of  the                                                               
community address local  concerns and he does not  see any reason                                                               
to spend  a lot of  money on a [scientist]  from out of  town who                                                               
does not  know the country. His  third concern is that  DEC is an                                                               
essential part of  the consistency review process.  To remove DEC                                                               
will leave rural communities vulnerable.  He said taking away the                                                               
community voice will hurt. He stated opposition to SB 143.                                                                      
4:25 p.m.                                                                                                                     
MS.  KATHLEEN  WASSERMAN, Mayor  of  the  City of  Pelican,  told                                                               
members  most of  the coastal  communities  in the  state are  in                                                               
economic  decline  due to  problems  encountered  by the  fishing                                                               
industry.  The City  of Pelican  will find  it very  difficult to                                                               
rewrite its  policies due  to the increased  local match.  She is                                                               
especially concerned  with the  90-day timeline.  She understands                                                               
the concerns  of industry but, from  the communities' standpoint,                                                               
she  has   seen  many  instances   where  there  is   no  working                                                               
relationship between  the applicant and community.  She feels the                                                               
90-day  clock could  be dangerous  to  a community  that feels  a                                                               
project does  not fit its  planning policies. She  also expressed                                                               
concern that it  will be quite difficult for the  City of Pelican                                                               
to  pay for  a scientific  review. She  noted that  as Ms.  Brady                                                               
said, companies  need better  ways to operate  in the  state, but                                                               
those companies also depend on  healthy communities that are able                                                               
to plan effectively.                                                                                                            
CHAIR OGAN asked Ms. Wasserman if she prefers the original bill.                                                                
MS. WASSERMAN said the public  comment process that has been used                                                               
for  the last  few years  has worked  very well.  What she  finds                                                               
bothersome is  that an application  is automatically found  to be                                                               
consistent  after  90  days  when the  community  may  have  some                                                               
problems with the  project. She said either the  community or the                                                               
applicant could delay it, so there  are risks on either side. She                                                               
noted  as a  community  representative, she  will  weigh in  more                                                               
heavily on the side of the communities.                                                                                         
MR. HAROLD  HEINZE told  members he  is representing  himself but                                                               
wanted to share  his experiences in the ACMP process  as a former                                                               
commissioner  of   DNR.  He  reminded   members  that   ACMP  was                                                               
established in the 1970s to  solve a federal problem other states                                                               
were experiencing.  At that  time, Alaska  took advantage  of the                                                               
available federal  funds to undergo  a local planning  process in                                                               
the 1980s.  When he became involved  in the process in  the early                                                               
1990s, the program  was up and running. His exposure  to ACMP was                                                               
very disappointing and  he sees the changes  before the committee                                                               
to  be positive  in  terms of  getting back  to  a more  workable                                                               
program for Alaska.                                                                                                             
MR.  HEINZE recalled  two  decisions that  were  made during  his                                                               
tenure  as commissioner:  an oil  lease sale  on the  North Slope                                                               
east of  Barrow and  an offshore  mining project  in the  area of                                                               
Goodnews Bay. Those decisions were  made using two very different                                                               
approaches.  An extraordinarily  elaborate process  was used  for                                                               
the Goodnews Bay decision yet  nothing from that process improved                                                               
the  quality of  the decision.  The decision  on the  Prudhoe Bay                                                               
east lease  sale was  his to  make so  he did  not go  through an                                                               
elaborate process.  He traveled to  Barrow to talk to  the people                                                               
and solicit input. He believes that  led to a better decision. It                                                               
was not  subject to a lot  of other people making  decisions; one                                                               
person was accountable for the decision.                                                                                        
MR. HEINZE said  what he dislikes about the ACMP  program is that                                                               
it becomes very diffuse and litigious  and he is not sure it adds                                                               
anything  to  the  quality  at   all.  He  believes  this  is  an                                                               
appropriate time  to make  changes to that  program. He  said the                                                               
counterpoint  to some  of the  earlier discussion  is that  it is                                                               
true  that  a  number  of  coastal  communities  are  in  trouble                                                               
economically. But,  as a  commissioner, he  worried about  how to                                                               
use  state  resources  to  build  an  economic  base  to  benefit                                                               
communities. He  said communities that are  having trouble should                                                               
encourage the state to take that  kind of an attitude rather than                                                               
get bogged down  by considering the economic problem  to be local                                                               
only. He  said the changes  in this legislation reflect  a change                                                               
in attitude about using state resources to help.                                                                                
MR. PETER  FREER, a planner with  the City and Borough  of Juneau                                                               
(CBJ), informed members  he submitted a letter from  the CBJ that                                                               
addresses the CBJ's more global  concerns. He said he would focus                                                               
his testimony  on two elements  of the Juneau  coastal management                                                               
program, which the CBJ has come  to rely on as an important local                                                               
development   tool.  The   CBJ  hopes   that  program   will  not                                                               
inadvertently be jeopardized by this legislation.                                                                               
MR.  FREER said  the  Juneau Wetlands  Management  Plan has  been                                                               
incorporated  as  an element  of  the  Juneau coastal  management                                                               
plan.  This  wetlands plan  grew  out  of the  CBJ's  frustration                                                               
during  the 1980s  caused by  its inability  to obtain  U.S. Army                                                               
Corps of  Engineers 404 permits  for activities in  wetlands. The                                                               
Juneau  Wetlands  Management  Plan   was  developed  to  classify                                                               
wetlands in the  urban area into high and low  value wetlands. On                                                               
the low value  wetlands, the CBJ has general  permit authority to                                                               
issue permits  for construction and development  activities. That                                                               
greatly  simplified   development  within  the  borough   and  on                                                               
marginal wetlands  where the permit  process had  previously been                                                               
cumbersome. The  Juneau Wetlands Management Plan  also identifies                                                               
eight  special waterfront  development  districts. Those  special                                                               
districts  were adopted  as elements  of  the coastal  management                                                               
program.  In   those  areas,   coastal  marine,   industrial  and                                                               
commercial development  can take place. These  designated coastal                                                               
areas have been very important  in promoting economic development                                                               
and  in easing  the  development process.  The resource  agencies                                                               
approved  these  through  the  adoption  of  the  Juneau  Coastal                                                               
Management Program in the late 1980s.                                                                                           
MR. FREER  said he wanted  to bring the committee's  attention to                                                               
the important elements  of Juneau's coastal program  and the role                                                               
they play in the rational  development of Juneau's coastal areas.                                                               
They represent  important local authority and  local control that                                                               
the CBJ  wants to  retain. The  CBJ believes it  would be  a very                                                               
unhappy consequence  if its local authorities  were inadvertently                                                               
lost as a result of the revisions made in CSSB 143(RES).                                                                        
SENATOR  ELTON  commented  the  unhappy  circumstance  Mr.  Freer                                                               
referred  to  would  be  the  inability of  the  CBJ  to  promote                                                               
economic development in the coastal area.                                                                                       
MR. FREER  said the  CBJ believes  the approvals  it has  for the                                                               
development of  the waterfront districts  and the  general permit                                                               
authority it has  in low value wetlands  expedites and simplifies                                                               
the local  development process. Ceding these  authorities back to                                                               
the state and federal government would complicate development.                                                                  
CHAIR  OGAN asked  participants  to provide  brief testimony  and                                                               
said the committee would hear the bill again on Monday.                                                                         
MR. TOM OSCAR, a member of  the coastal resource area serving the                                                               
Yukon Kuskokwim  area, concurred with Mr.  Alan Joseph's comments                                                               
about the  tribal council communities.  In the 44  communities he                                                               
serves, 15 are traditional primary  governments. He would like to                                                               
see clarification  in the  bill as  to whether  those governments                                                               
are to be  included. The 44 villages will not  be able to rewrite                                                               
their programs in one year. That  process will be costly and time                                                               
consuming.  Third, the  villages are  in the  process of  mapping                                                               
customary use  areas to protect  resources. He sees  no guarantee                                                               
to protect  traditional hunting  and fishing  areas in  the bill.                                                               
[The remainder of Mr. Oscar's testimony was indiscernible.]                                                                     
CHAIR OGAN  said he would get  back to Mr. Oscar  with answers to                                                               
his questions.                                                                                                                  
MR. JEFF  COURIER, Lake  and Peninsula  Borough, told  members he                                                               
has not  heard a  lot of  support for  the proposed  changes from                                                               
people  representing communities.  He understands  a lot  of work                                                               
has been done on this bill, but  he still hears a lot of concern.                                                               
He urged members  to slow down and do this  right because changes                                                               
will cause  a lot of  problems for communities around  the state.                                                               
He said  the timing will not  work for the 17  communities in the                                                               
Lake &  Peninsula Borough. The  90-day clause is a  major concern                                                               
because if an applicant holds  up the process intentionally, that                                                               
will soon become the trend.                                                                                                     
MR. DOUG  MERTZ, representing the  Prince William  Sound Regional                                                               
Citizens Advisory  Council, told members  the Council is  made up                                                               
of  numerous entities,  including a  number of  local communities                                                               
affected by  the Exxon Valdez  oil spill. Those  communities know                                                               
what  it  is  like  to have  their  local  economies,  commercial                                                               
fishing  resources  and  subsistence  way of  life  disrupted  by                                                               
outside  events  out  of  their control.  Hence,  they  are  very                                                               
concerned about what  SB 143 will do to them  and their degree of                                                               
control  over their  local communities.  He said  the Council  is                                                               
hearing Administration  officials say local  enforceable policies                                                               
will  be able  to continue  pretty much  unchanged. However,  the                                                               
language of the bill gives  a completely different impression. He                                                               
said part  of the  problem may be  a matter of  how the  bill was                                                               
drafted but it  is very important that the  Legislature make sure                                                               
its policy call is stated  unequivocally and clearly in the bill.                                                               
He  cautioned that  the language  of the  bill excludes  from the                                                               
jurisdiction of  local enforceable  policies any number  of vital                                                               
matters  to local  communities  in  Sections 11,  14  and 21.  He                                                               
     Basically, if it comes within  the jurisdiction of [the                                                                    
     Department of]  Environmental Conservation,  they can't                                                                    
     do it.  If it  comes within  the Forest  Practices Act,                                                                    
     they can't do  it. If it's something  that's not unique                                                                    
     to that  particular coastal  resource area,  they can't                                                                    
     do  it. For  instance, if  the local  resource area  is                                                                    
     concerned about  the impact on  an eel grass  bed, what                                                                    
     the next resource area over  has the same concern about                                                                    
     eel  grass  beds, then,  by  definition,  it becomes  a                                                                    
     matter  of state  concern, not  local concern  and they                                                                    
     can't  have  a   local  enforceable  policy.  [Indisc.]                                                                    
     addressed by federal  or state law, even  if it doesn't                                                                    
      duplicate it, but it's addressed by them, the locals                                                                      
     can't do it.                                                                                                               
MR. MERTZ  said the  Legislature needs to  make the  basic policy                                                               
call  as  to  whether  it wants  local  enforceable  policies  to                                                               
continue  as they  are, whether  it wants  them to  continue with                                                               
some tweaking, or  whether it does not want local  entities to do                                                               
local  enforceable  policies.  If  it does  not  want  any  local                                                               
involvement, the current bill will  do that. However, if it wants                                                               
either of the  first two, a lot  of work needs to be  done on the                                                               
bill  because the  language does  not reflect  that intention  at                                                               
all. He noted this legislation  was drafted by the Administration                                                               
and  suggested  having  the  legislature's  drafters  review  the                                                               
CHAIR OGAN asked Mr. Mertz if  he could submit his suggestions in                                                               
MR. MERTZ agreed to do so.                                                                                                      
CHAIR OGAN asked Senate President Therriault to testify.                                                                        
SENATOR GENE THERRIAULT said he wanted  to respond to some of the                                                               
concerns  expressed in  earlier  testimony.  Regarding the  local                                                               
match,  nothing  in  the  bill  impacts  that;  the  decision  to                                                               
increase  the match  was a  separate  budgetary decision.  Either                                                               
state funds or a combination of  state and local funds must match                                                               
the federal funds. The state no  longer has the funds to continue                                                               
its level  of match. If  communities want to continue  to receive                                                               
federal funds,  the local governments  will have to pick  up more                                                               
of  the required  match. With  regard to  the 90-day  clock, that                                                               
language contains an  exception [on page 15, line  2] that refers                                                               
to  (d)(3). That  subsection provides  that  an affected  coastal                                                               
resource district  can request  a subsequent  review. He  said on                                                               
the  issue  of  the  expense   of  re-writing  local  enforceable                                                               
policies, the  legislature passed SB  308 last year. As  a result                                                               
of that  legislation, many of  the coastal resource  areas should                                                               
currently be  undergoing a review of  their enforceable policies.                                                               
However,  he   does  not  believe  the   outgoing  administration                                                               
impressed upon the  coastal resource areas the  enactment of that                                                               
legislation and  their need  to comply. The  timeline for  SB 308                                                               
was one year.  If those changes are not made,  the Coastal Policy                                                               
Council has  the authority to  delete those  enforceable policies                                                               
that  were just  references or  adoptions of  state statutes  and                                                               
CHAIR OGAN thanked all participants and adjourned the meeting at                                                                
4:55 p.m.                                                                                                                       

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