Legislature(2011 - 2012)HOUSE FINANCE 519
04/15/2011 09:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB106 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 58 | TELECONFERENCED | |
| += | SB 108 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 106 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 15, 2011
9:02 p.m.
9:02:56 PM
CONTINUATION OF RECESSED MEETING FROM 4/15/11 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 9:02 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Mike Hawker; Representative Beth Kertulla;
Representative Eric Feige; Representative Bob Herron;
Representative Paul Seaton; Representative Kyle Johansen;
Representative Mike Chenault; John J. Burns, Attorney
General, Department of Law; Larry Hartig, Commissioner,
Department of Environmental Conservation; Joe Balash,
Deputy Commissioner, Department of Natural Resources; Mike
Satre, Executive Director, Council of Alaska Producers;
Representative Bob Herron; Representative Eric Feige.
SUMMARY
HB 106 COASTAL MANAGEMENT PROGRAM
CSHB 106(FIN) was REPORTED out of Committee with
a "do pass" recommendation and with two new
fiscal notes by the Department of Environmental
Conservation and one new fiscal impact note by
the Department of Natural Resources.
HOUSE BILL NO. 106
"An Act extending the termination date of the Alaska
coastal management program and relating to the
extension; relating to the review of activities of the
Alaska coastal management program; providing for an
effective date by amending the effective date of sec.
22, ch. 31, SLA 2005; and providing for an effective
date."
9:03:20 PM
Vice-chair Fairclough MOVED Work Draft CSHB 106(FIN), (27-
GH1965\T, 4/15/11) as a working document before the
committee.
Co-Chair Stoltze OBJECTED.
JOHN J. BURNS, ATTORNEY GENERAL, DEPARTMENT OF LAW, spoke
to the CS. He declared that the bill represented a finely
structured balance between local communities, industry and
economic opportunity. He described changes that addressed
concerns articulated earlier with the House Resources
version. He elaborated that the bill provided objective
standards, predictability, and ensured local input but
denied local veto power over projects. Within the
parameters coastal districts were provided meaningful input
and opportunity to create enforceable policies that ensure
development was compatible with local concerns. He stressed
that the enforceable policies must meet very specific
criteria to safeguard that the policies were consistent
with the interests of the whole state. He claimed that the
CS encouraged and facilitated meaningful dialogue between
industry and costal districts. He identified the Alaska
Coastal Policy Board. The board's composition and
procedures were designed to build understanding and
agreement.
9:07:23 PM
Mr. Burns provided an overview of the bill. He explained
that the CS created the Alaska Coastal Policy Board that
consisted of nine members. He described the composition of
the board appointed by the governor:
· Five public members, one appointed at-large from the
resource development, extraction industry or Native
regional corporations. Four appointed members from
various geographic areas.
· Commissioners from Department of Transportation and
Public Facilities(DOT), Department of Fish and Game
(DFG), Department of Environmental Conservation (DEC),
and one deputy commissioner from Department of Natural
Resources (DNR).
Mr. Burns divulged that the commissioner of DNR was
empowered to reconsider Alaska Coastal Management Program
(ACMP) decisions; therefore the deputy commissioner was
chosen to sit on the board. He detailed that the public
members serve staggered three year terms.
Mr. Burns discussed the function of the board. He read Page
4, Line 12,
(f) Three public members and three designated members
of the board constitute a quorum. However, action may
be taken only upon the affirmative vote of at least
two-thirds of the full membership of the board.
Mr. Burns explained that the super majority [two-thirds]
voting requirement was crafted to ensure full dialogue and
build consensus. He added that the board's function was to
serve as a forum to foster agreement.
Mr. Burns read Page 4, Lines 25-31:
(j) The board shall
(1) make recommendations to the department
relating to the approval or modification of a
district coastal management plan under AS
46.40.060(b);
(2) provide a forum for the discussion of issues
related to this chapter, AS 46.40, and the
coastal uses and resources of the state; and
(3) annually solicit from state and federal
agencies information as to whether they
implemented any new statutes or regulations
affecting coastal uses or resources
9:11:16 PM
Mr. Burns described the passage as a "clean up" provision.
The provision prescribed a yearly review of costal plans to
allow affected state agencies to modify or add regulations.
He noted that the section supported "clawback provisions"
in the bill. The agency was not obligated to act at the
time a costal plan was implemented. Acceptance or
acquiescence by an agency would not preclude development of
a regulation in the future.
Mr. Burns noted that the powers of DNR detailed on Page 5,
Line 15 of the bill remained consistent with existing
statures. He remarked that the duties of the department
outlined on Pages 5-6 of the CS reflected existing statute
except that the department was obligated to provide
information and board minutes to costal districts and
resource service areas.
Mr. Burns turned attention to the development of district
costal management plans. He read Page 6, line 26- 28:
The plan must meet the [STATEWIDE STANDARDS AND]
district plan criteria adopted under AS 46.40.040, may
not be inconsistent with the standards adopted under AS
46.40.040, and must include [criteria listed]
Mr. Burns read further on Page 7, Line 13-24:
(b) In developing enforceable policies in its coastal
management plan under
(a) of this section, a coastal resource district shall
meet the requirements of AS46.40.070 and ensure that
the enforceable policies
(1) are clear and concise as to the activities and
persons affected by the policies;
(2) use prescriptive or performance-based
standards that are written in precise and
enforceable language;
(3) address a coastal use or resource of concern
to the residents of the coastal resource district
as demonstrated by local knowledge or supported by
scientific evidence; and
(4) employ the least restrictive means to achieve
the objective of the enforceable policy
Mr. Burns identified the definition of "least restrictive"
found on Page 7, Line 28. He read the factors considered for
a least restrictive determination beginning on Page 7 line
31:
(1) alternative methods of achieving the objective of
the policy;
(2) local knowledge or scientific evidence supporting
each alternative method;
(3) how the alternative methods may affect other
existing or potential uses;
(4) the economic effects of alternative methods;
(5) the technological feasibility of the alternative
methods; and
(6) any other relevant factors.
Mr. Burns indicated that the provisions call for a
meaningful evaluation of the enforceable policy. The
assessment must weigh the consequences.
9:15:35 PM
Mr. Burns defined the "DEC carve-out." He read the phrase
from Page 8, Line 9 of the CS:" Notwithstanding any other
provision of law." The provision reflected the "DEC carve-
out"; the ACMP cannot develop or recommend regulations that
were in the scope of DEC. He felt that the carve-out was
necessary to achieve a balanced regulatory environment.
Mr. Burns directed attention to the process of the
evaluation of a coastal plan. He read Page 9, Lines 5-9:
(b) If the department finds that a district coastal
management plan is not approvable or is approvable only
in part under (a) of this section, the department shall
explain in writing the basis for its decision. The
coastal resource district that submitted the plan may
request that the department submit the plan or portions
of the plan to the board for review.
Mr. Burns continued to read Page 9, Lines 19-23:
(c) After the board has reviewed the district coastal
management plan and submitted recommendations under (b)
of this section [IF, AFTER MEDIATION, THE DIFFERENCES
HAVE NOT BEEN RESOLVED], the department shall enter
findings and, by order, may [REQUIRE]
(1) approve the plan or portions of the plan;
Mr. Burns judged that if the board's recommendation was
contrary to the department's determination the provision
permitted an opportunity for meaningful participation
between the ACMP and the department.
Mr. Burns referred to the requirements for department
review and approval. He declared that Section 15 was the
core of the bill related to implementation. The section
depicted the level of checks and balances established in
the CS. He read Page 10, Lines 16-30:
Sec. 46.40.070. Requirements for department review and
approval. (a) The department shall approve a district
coastal management plan submitted for review and
approval if, as determined by the department, the
(1) district coastal management plan meets the
requirements of this chapter and the district
plan criteria adopted by the department; and
(2) enforceable policies of the district coastal
management plan
(A) do not duplicate, restate, incorporate
by reference, rephrase, or adopt state or
federal statutes or regulations;
(B) are not preempted by or in conflict with
state or federal statutes or regulations;
(C) employ the least restrictive means to
achieve the objective of the enforceable
policies;
(D) do not arbitrarily or unreasonably
restrict uses of state concern; and
(E) meet the requirements of (b) and (c) of
this section.
9:19:11 PM
Mr. Burns discussed the legal definition of "uses of state
concern" as it related to the CS. He focused on (D) (line
28) of the CS. He read, "not arbitrarily obstruct uses of
state concern." He cited the statute that defined the "uses
of state concern" AS 46.40.210.12. He paraphrased the
statute as follows, "uses of national interest including
the use of resources for the citing of ports and major
facilities that contribute to meeting energy needs,
construction and maintenance of navigational facilities and
systems, resource development of federal land and national
defense and related security facilities that are dependent
upon coastal location. Uses of more than local concern
including those land and water that confer significant
environmental, social, cultural or economic benefits or
burdens beyond the single coastal resource district"
Mr. Burns emphasized that the statute prohibited a coastal
district to arbitrarily or unreasonably restrict use if the
economic impact was felt elsewhere in the state. He
believed the law delineated significant restrictions on
limiting use through enforceable policies. The statute
shaped the criteria that ACMP regulation or enforceable
policies were measured against.
Mr. Burns continued with Section 15. He read Pages 10-11,
Lines 31-9:
(b) The enforceable policies in a district coastal
management plan submitted for review under this
section must meet the requirements of (a) of this
section and may establish new standards or
requirements that are within the authority of a state
or federal agency unless
(1) a state agency specifically objects to the
proposed new standards or requirements on the
grounds that the proposed standards or
requirements
(A) are based on scientific evidence or
local knowledge relied upon by the coastal
resource district to satisfy the
requirements of AS 46.40.030 but that
conflicts with the agency's interpretation
of the scientific evidence within the
agency's area of expertise;
Mr. Burns stated that the law's intent was to avoid
competing scientific data challenges. He expounded that if
ACMP interpreted scientific data differently than a state
agency the state will endorse the agency data provided the
disputed data was in the agencies area of expertise.
9:23:12 PM
Mr. Burns turned to Subsection (B) on page 11, Line 10. He
read as follows:
(B) conflict with the agency's allocation of existing
or planned agency resources to meet state policies and
objectives; or
(C) conflict with agency priorities or objectives, or
other state policies;
Mr. Burns informed that the following provision represented
another "DEC carve-out." He read Page 11, Lines 14-16:
(2) the proposed new standards or requirements address
discharges, emissions, contaminants, conditions,
risks, or other matters that fall within the authority
of the Department of Environmental Conservation
Mr. Burns restated that the coastal districts were
prohibited from adopting policies within DEC's regulatory
control.
Mr. Burns identified paragraph (c) as a significant
provision that related to protecting existing rights. He
read Page 11, Lines 18-23:
(c) An approval of a district coastal management plan
with enforceable policies may not affect a person's
rights or authorizations under an unexpired permit,
lease, or other valid existing right to explore or
develop natural resources that predates the date that
the enforceable policy becomes final. An enforceable
policy becomes final when its adoption is no longer
subject to further review through either a judicial or
administrative process.
Mr. Burns stressed that the provision ensured stability and
predictability in the permitting process. New regulations
will not pertain to existing permits or authorizations
until they expire. Renewal would subject permits to updated
standards.
Mr. Burns commented on the definition of "specifically
objects" found on Page 11, Lines 24-25. He read:
(d) In this section, "specifically objects" means
that, during a review of a 25 district coastal
management plan under AS 46.40.050 or 46.40.060
Mr. Burns indicated that a timeframe for review was
carefully considered. The administration concluded that in
order to file an objection an unconstrained review process
was necessary. He continued to read Page 11, Lines 26-30:
implementing regulations, a written objection to the
enforceable policy that establishes the new standards
or requirements is filed with the department by
(1) the commissioner or the commissioner's
designee of a state agency;or
(2) the attorney general of the state
Mr. Burns characterized Page 11-12, Line 31-3 as a
"clawback provision." He read the provision:
(e) Notwithstanding any other provision of this
chapter, an enforceable policy that establishes
requirements within the authority of a state or
federal agency shall be superseded upon the enactment
of a law or adoption of a regulation that is
inconsistent with the enforceable policy.
9:27:29 PM
Mr. Burns elaborated that the provision protected a state
agency's right to object to an enforceable policy at any
point in the future. A new regulation adopted in lieu of the
existing enforceable policy will immediately supersede the
conflicting policy. The agency would inform the board of the
new regulation during the board's yearly review process. The
board would require the local district to resubmit a plan.
Mr. Burns directed attention to Section 16 of the CS. He
communicated that the section related to the consistency
review process for a proposed project. He read Page 12,
Lines 5-10 and Lines 18-29:
(d) In preparing a consistency review and
determination for a proposed project, the reviewing
entity shall
(1) request consistency review comments for the
proposed project from state resource agencies,
affected coastal resource districts, and other
interested parties as determined by regulation
adopted by the department;
(2) prepare proposed consistency determinations;
(B) may occur only if requested by
(i) the project applicant;
(ii) a state resource agency; or
(iii) an affected coastal resource district; and
(C) shall be completed with the issuance of a written
order
signed by at least two of the commissioners of the
resource agencies or their deputies [BY THE
DEPARTMENT] within 60 [45] days after the initial
request for an elevated [SUBSEQUENT] review under this
paragraph; if a written order is not issued in
accordance with this subparagraph, the proposed
consistency determination under (2) of this subsection
is the final consistency determination and
certification; and
(4) render the final consistency determination
and certification
9:31:27 PM
Mr. Burns delineated that a petitioner [defined in statute
above] may request an elevated review. The resource
commissioners of DNR, DOT, and DFG or their deputies will
review the consistency determination and submit a written
order within 60 days. In the event the commissioners fail
to submit written orders within the timeframe the reviewers
would adopt the consistency determination.
Mr. Burns concluded with the definition of "local
knowledge." He read Page 14, Lines 10-15:
(16) "local knowledge" means a body of knowledge or
information about the coastal environment or the human
use of that environment, including information passed
down through generations, if that information is
(A) derived from experience and observations;
(B) generally accepted by the local community; and
(C) not contradicted by scientific evidence
Mr. Burns emphasized the significant discussion of the
definition by all parties. He felt the provision reflected
the strong desire for balanced legislation.
Co-Chair Stoltze REMOVED his OBJECTION. There being NO
further OBJECTION, it was so ordered.
Representative Gara stated concerns about the composition
of the board. He felt that the governor controlled the
board. He proposed deleting the provision that the governor
may veto a list of proposed regional members. He read the
proposed language for deletion on Page 3,[Lines 2-3]
"the governor may reject a list submitted under this
subparagraph and request subsequent lists with
different names."
Mr. Burns explained that the administration engaged in
thoughtful deliberation while drafting the composition of
the board. The CS encompassed the governor's desire for
balance and ensured thorough dialogue. The local members
were chosen from a list submitted by each region. He was
confident that the list would contain a name satisfactory
to all parties.
9:39:26 PM
LARRY HARTIG, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, spoke in support of the composition of the
Alaska Coastal Policy Board. He exemplified the similar
structure of the Board of Forestry, which he was a member
for 13 years. He related the success of the Board of
Forestry. He argued that the diverse make-up of the
proposed board and the super majority requirement would
foster consensus and build consistency. A diverse board
needed one person to evaluate the membership from a
holistic view and choose appointees. He believed the
governor was the best suited for the task. Representative
Gara was uncomfortable with the provision allowing the
governor to reject local nominees until he finds one that
suits him.
Representative Doogan queried Section 15 related to agency
objection to new standards. He cited Page 11, Lines 10-13:
(B) conflict with the agency's allocation of existing
or planned agency resources to meet state policies and
objectives; or
(C) conflict with agency priorities or objectives, or
other state policies;
He interpreted that a state agency can specifically object
to the districts proposed new standards "just because it
wanted to." He surmised that it was the most expansive
construction possible. He asked why the section was written
so broadly. Mr. Burns replied that the subsection (B) met
the standard requirement in law that an agency
determination cannot be arbitrary or capricious. He
hypothesized a situation in which a coastal district listed
a species as endangered. The Department of Fish and Game
would have to focus its limited resources on management of
the particular species. The section allowed DFG to object
given their lack of adequate resources. They cannot object
simply because they want to. He pointed to subsection (C)
related to state policies. He informed that state
priorities and policies were not nebulous. The agency must
have a basis to object founded on sound policy.
9:45:24 PM
Commissioner Hartig furthered that a coastal district did
not have the authority to enforce policies. He explained
that it was requisite that a new project aligns with any
new district regulations. The agencies monitored and
enforced policies. The departments do not automatically
receive an appropriation for additional enforcement. An
agency cannot reallocate resources to regulate district
enforceable policies that were not as high a priority as
legislatively directed policies. The section was written
broadly to allow the agencies flexibility. Representative
Doogan appreciated the explanation but it did not answer
his question. He did not understand why the departments
needed such broad authority.
Mr. Burns reiterated that all department authority was
restrained by arbitrary and capricious standards. The
standards were refined by regulation. He contended that the
section reflected the administrations inability to respond
to a myriad of conceivable issues. The CS permitted
development of enforceable policies by coastal districts.
The concern was to provide a system of checks and balances.
The administration discerned that the arbitrary and
capricious standard provided a sufficient measure to
evaluate enforceable policies against.
9:50:32 PM
Representative Doogan noticed a lot of checks and no
balances.
Representative Guttenberg referred to the "clawback
provision" beginning on Page 11, Line 31. He discussed the
ability of an agency to revisit a regulation and always
retain the right to change it. He asked where the process
would stop. He wondered how that approach was consistent
for industry. Mr. Burns replied that the right of an agency
to exercise its authority was imperative. He viewed local
district policies as stop gap measures. The local district
was filling a void for an agency function. At a later date
the agency can review the policy and develop a broad-based
statewide policy. He reminded that the regulation does not
change retroactively. A permitted industry was grandfathered
into a regulatory process.
9:54:31 PM
Representative Guttenberg described problems that occurred
in normal agency operations with different interpretations
of regulation. He felt that the process in general lacked
adequate protection to ensure regulatory consistency.
Commissioner Hartig reported that agencies subscribed to
comprehensive processes set up in statute on how to adopt
regulations. The process was very public. Coastal district
enforceable policies were not subject to the same thorough
public process. The agency as the regulatory enforcer was
entitled to submit the regulation to the same process and
possibly supersede the coastal districts policy. He pointed
out that agency oversight was never surrendered when the
district enforceable policy was in place; the policy acted
as a stop gap. He opined that the thorough vetting of an
agency regulation made the state process more predictable.
Representative Joule inquired about "designated areas". He
related that CSHB 106 (RES) contained a provision that
prohibited DNR from requiring that coastal districts must
designate areas in order to apply enforceable policies. The
CS removed the provision. He asked if DNR remained
committed to terminating the designated area requirement.
JOE BALASH, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, affirmed the department's commitment to abolish
the requirement from the body of regulations that govern
the ACMP.
9:59:35 PM
MIKE SATRE, EXECUTIVE DIRECTOR, COUNCIL OF ALASKA
PRODUCERS, spoke in support of the legislation. He
announced that the council represented large metal mines
and large development projects in the state. The council
thought that the CS achieved the fine balance between
protection of important coastal areas and resource
development. The regulatory process remained science-based
and predictable for industry while allowing meaningful
local input based on provable plans with clear enforceable
policies.
10:02:38 PM
Representative Joule read into the record the comments of
Edward S. Itta, Mayor of the North Slope Borough (copy on
file):
Thank you, Mister Chairman. I appreciate this opportunity
to address the committee on the latest version of HB 106.
First of all, I want to thank the Governor and his staff
for the enormous effort and time they have devoted to
finding a way forward on this bill, a way forward that
works for all the parties involved. I particularly want to
thank Attorney General Burns, Commissioner Hartig for their
commitment to the process we've been going through.
I also want to thank a few of the legislators who have
contributed their input and participated in finding a
solution. In particular, I'd like to recognize the work
that Representative Feige, Representative Seaton, and
Representative Herron did in the House Resources Committee
and their persistence in reaching a solution that they
could bring to this committee. I also want to recognize the
efforts of Reggie Joule, my representative in bringing this
matter to the committee's attention.
Earlier this year, I appeared before you with Attorney
General Burns, Commissioner Sullivan and Rex Rock, by
fellow whaler and President of Arctic Slope Regional
Corporation. We all spoke about the concerns and challenges
that we share as Alaskans, as well as the belief that we
are in this together I believe that is the spirit that has
brought us back here today. We recognize that the best
solutions come from working side by side and that this
process helps us to understand each other better and pave
the way for a more effective process in the future.
Sure, we have different perspectives on some issues, but
our goals are much more closely aligned than we often allow
ourselves to believe. We all stand together in our desire
for a strong economic foundation that allows communities to
thrive; and we all see the inherent value in preserving the
qualities of Alaskan life that make this state unique.
I do have concerns with this bill. But this bill echoes
these two pursuits. It helps bring local communities to the
table, whereas for the past few years they have felt like
they were pushed to the back of the room as big projects
were planned for their communities. HBI06 gives them a way
to discuss their deepest concerns as development moves
forward.
I'm very pleased to see that this bill reconstitutes a
coastal policy board and we understand that designated
areas have been eliminated. It also establishes clearer
mechanisms for the State and the districts to engage in the
process leading to approved policies.
Again, I want to thank Governor Parnell for committing his
administration to the task of finding a solution to this,
and I support moving the measure that is embodied in the
Finance CS of this bill from the committee.
Thank you, Mister Chairman.
10:05:55 PM
Representative Edgmon thanked Co-chair Stoltze's committee
leadership on behalf of the legislation.
REPRESENTATIVE BOB HERRON, spoke in support of the CS. He
appreciated the hard work done by the administration and
their effort to work with his constituents. He hoped that
the effort provided his constituents true participation in
the ACMP process.
10:09:33 PM
REPRESENTATIVE ERIC FEIGE, commented on the process of
drafting the CS. He felt that the CS was created in the
spirit of compromise and stood as a worthy example of the
legislative process.
Vice-chair Fairclough highlighted the fiscal notes. She
identified three new fiscal notes with fiscal impact: one
fiscal note from DNR and two fiscal notes from DFG.
Vice-chair Fairclough MOVED to report CSHB 106(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 106(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with two new fiscal notes by the
Department of Environmental Conservation and one new fiscal
impact note by the Department of Natural Resources.
10:14:14 PM
ADJOURNMENT
The meeting was adjourned at 10:14 PM.
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