Legislature(1993 - 1994)
04/27/1994 02:00 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
April 27, 1994
2:00 p.m.
MEMBERS PRESENT
Representative Brian Porter, Chairman
Representative Jeannette James, Vice-Chair
Representative Gail Phillips
Representative Pete Kott
Representative Joe Green
Representative Cliff Davidson
Representative Jim Nordlund
MEMBERS ABSENT
None
OTHER LEGISLATORS PRESENT
Senator Suzanne Little
COMMITTEE CALENDAR
SB 308: "An Act modifying administrative procedures and
decisions by state agencies that relate to uses
and dispositions of state land, property, and
resources, Bill Status: Hearing to be continued
until April 28, 2 p.m.and to the interests within
them; and modifying administrative procedures and
decisions by state agencies that relate to uses
and activities involving land, property, and
resources, and to the interests within them, that
are subject to the coastal management program when
the use or activity is to be authorized or
developed in phases; and providing for an
effective date."
PASSED OUT OF COMMITTEE WITH LETTER OF INTENT
WITNESS REGISTER
MARY ANN LUNDQUIST, Assistant Attorney General
Civil Division
Department of Law
1031 W. 4th, Suite 200
Anchorage, AK 99501-1994
Telephone: 269-5254
POSITION STATEMENT: Introduced SB 308
JAMES EASON, Director
Division of Oil and Gas
Department of Natural Resources
PO Box 107034
Anchorage, AK 99510-0734
Telephone: 762-2547
POSITION STATEMENT: Testified in support of SB 308
PETER VAN TUYN
Trustees for Alaska
A Non-Profit, Public Interest, Environmental Law Firm
725 Christensen Drive, Suite 4
Anchorage, AK 99501
Telephone: 276-4244
POSITION STATEMENT: Testified in opposition to SB 308
NANCY WAINWRIGHT
Address Unavailable
POSITION STATEMENT: Presented testimony on SB 308 from Jon
Isaacs, Consultant, Jon Isaacs and
Associates
THEO MATHEWS
United Cook Inlet Drift Association
P.O. Box 389
Kenai, AK 99611-0389
Telephone: 283-3600
POSITION STATEMENT: Testified in opposition to SB 308
WALT FURNACE
Alaska Support Industry Alliance
4220 B St., Suite 200
Anchorage, AK 99521
Telephone: 337-5811 h. 563-2226 w.
POSITION STATEMENT: Testified in support of SB 308
LINDA FREED
Community Development Director
Kodiak Island Borough Assembly
710 Mill Bay Road
Kodiak, AK 99615-6340
POSITION STATEMENT: Testified in regard to SB 308
PAUL FUHS, Commissioner
Alaska Department of Commerce and Economic Development
PO Box 110800
Juneau, AK 99811-0800
Telephone: 465-2500
POSITION STATEMENT: Testified in support of SB 308
BRAD PENN
Alaska Oil and Gas Association
121 W. Fireweed, Suite 207
Anchorage, AK 99503
Telephone: 272-1481
POSITION STATEMENT: Testified in support of SB 308
SENATOR SUZANNE LITTLE
Alaska State Legislature
State Capitol, Room 7
Juneau, AK 99801-1182
Telephone: 465-2828
POSITION STATEMENT: Testified in regard to SB 308
JOHN OSCAR, President
Native Village of Tununak
Tununak IRA Council
Department of Natural Resources
PO Box 107
Tununak, AK 99681
Telephone: 652-6527
POSITION STATEMENT: Testified in opposition to SB 308
ELIZABETH KERTTULA, Assistant Attorney General
Civil Division
Department of Law
PO Box 110300
Juneau, AK 99811-0300
Phone: 465-3600
POSITION STATEMENT: Testified regarding SB 308
PREVIOUS ACTION
BILL: SB 308
SHORT TITLE: ADMIN ACTION RE LAND/RESOURCES/PROPERTY
SPONSOR(S): RESOURCES
JRN-DATE JRN-PG ACTION
02/14/94 2828 (S) READ THE FIRST TIME/REFERRAL(S)
02/14/94 2828 (S) RES, FIN
02/14/94 (S) RES AT 3:30 PM BUTROVICH RM 205
02/22/94 (S) RES AT 12:00 PM BUTRVICH RM 205
02/22/94 (S) MINUTE(RES)
02/22/94 (S) RES AT 3:00 PM BUTROVICH RM 205
02/23/94 2937 (S) RES RPT CS 3DP 1NR 1DNP NEW
TITLE
02/23/94 2937 (S) ZERO FN TO SB & CS PUBLISHED
02/23/94 2937 (S) (DNR, F&G, GOV, DEC)
02/24/94 (S) FIN AT 09:00 AM SENATE FIN 518
02/24/94 (S) MINUTE(FIN)
02/28/94 (S) FIN AT 09:00 AM SENATE FIN 518
02/28/94 (S) MINUTE(FIN)
03/02/94 (S) FIN AT 08:00 AM SENATE FIN 518
03/22/94 (S) FIN AT 09:00 AM SENATE FIN 518
03/22/94 (S) FIN AT 10:00 AM SENATE FIN 518
03/24/94 (S) FIN AT 1:00 PM BUTROVICH RM 205
03/25/94 (S) FIN AT 8:00 AM BUTROVICH RM 205
04/08/94 (S) FIN AT 08:30 AM SENATE FIN 518
04/11/94 (S) FIN AT 09:00 AM SENATE FIN 518
04/12/94 3582 (S) FIN RPT CS 4DP 1NR 1DNP
NEW TITLE
04/12/94 3582 (S) FN TO CS PUBLISHED (DNR)
04/12/94 3582 (S) PREVIOUS ZERO FNS APPLY (GOV,
DEC, F&G)
04/13/94 (S) RLS AT 04:10 PM FAHRENKAMP
ROOM 203
04/14/94 3666 (S) RULES RPT 2CAL 2NR 4/14/94
04/14/94 3668 (S) READ THE SECOND TIME
04/14/94 3668 (S) FIN CS ADOPTED UNAN CONSENT
04/14/94 3669 (S) ADVANCE TO 3RD RDG FAILED
Y8 N8 E1 A3
04/14/94 3669 (S) THIRD READING 4/15 CALENDAR
04/15/94 3722 (S) READ THE THIRD TIME
CSSB 308(FIN)
04/15/94 3722 (S) MOTION TO RETURN TO 2ND FOR
AM 1
04/15/94 3722 (S) RETURN TO 2ND FOR AM 1
WITHDRAWN
04/15/94 3722 (S) MOTION TO RETURN TO 2ND FOR
AM 2
04/15/94 3723 (S) RETURN TO 2ND FOR AM 2 FLD
Y10 N9 E1
04/15/94 3723 (S) RETURN TO SECOND FOR AM 3
UNAN CONSENT
04/15/94 3724 (S) AM NO 3 MOVED BY LITTLE
04/15/94 3724 (S) AM NO 3 FAILED Y8 N11
04/15/94 3724 (S) AUTOMATICALLY IN THIRD READING
04/15/94 3725 (S) FLD TO ADOPT LETTER OF INTENT
Y7 N12 E1
04/15/94 3726 (S) PASSED Y13 N6 E1
04/15/94 3726 (S) EFFECTIVE DATE PASSED Y15 N4 E1
04/15/94 3726 (S) Little NOTICE OF
RECONSIDERATION
04/18/94 3759 (S) RECON TAKEN UP/IN THIRD READING
04/18/94 3759 (S) HELD ON RECON TO 4/21 OR
LATER CALENDAR
04/21/94 3850 (S) ZERO FN TO FIN CS PUBLISHED
(DNR)
04/21/94 3849 (S) RETURN TO SECOND FOR AM 4
UNAN CONSENT
04/21/94 3850 (S) AM NO 4 MOVED BY PEARCE
04/21/94 3853 (S) AM NO 4 ADOPTED UNAN CONSENT
04/21/94 3853 (S) AUTOMATICALLY IN THIRD READING
04/21/94 3853 (S) MOTION TO ADOPT LITTLE LETTER
OF INTENT
04/21/94 3853 (S) AM TO LETTER OF INTENT ADPTD
Y11 N8 E1
04/21/94 3854 (S) ADPTD NO 2 LETTER OF INTENT
Y15 N4 E1
04/21/94 3855 (S) PASSED ON RECONSIDERATION
Y12 N7 E1
04/21/94 3855 (S) EFFECTIVE DATE PASSED Y16 N3 E1
04/21/94 3859 (S) TRANSMITTED TO (H)
04/25/94 3703 (H) READ THE FIRST TIME/REFERRAL(S)
04/25/94 3704 (H) JUDICIARY
04/27/94 (H) JUD AT 02:00 PM CAPITOL 120
ACTION NARRATIVE
TAPE 94-63, SIDE A
Number 000
The House Judiciary Standing Committee was called to order
at 3:45 p.m. on April 27, 1994. A quorum was present.
CHAIRMAN BRIAN PORTER stated that SB 308 would be the only
bill heard in the day's meeting. He said there would be
someone from the Department of Law present to walk the
committee through the bill.
SB 308 - ADMIN ACTION RE LAND/RESOURCES/PROPERTY
Number 031
MARY ANN LUNDQUIST, Assistant Attorney General, Department
of Law, gave a background history of the origins of the
legislation. She said she sees two reasons for the
legislation. Currently there is no guidance in the best
interest finding statute with regard to what must be in the
best interest finding, other than that it has to state the
basis on which the director's determination is based; that a
disposal is in the best interest of the state. This bill at
least gives some sideboards to the best interest finding.
MS. LUNDQUIST said further, there has been a long line of
Alaska Supreme Court cases that have consistently overturned
Superior Court decisions with regard to best interest
findings and coastal consistency determinations. One of
those cases is Camden Bay 1, which is sale 50. And in
there, the focus was on transportation issues. Department
of Natural Resources (DNR) did not discuss transportation if
ANWAR remained unavailable for onshore support facilities,
even though at the time the best interest finding was made,
it was uncertain as to where, when, and if a development
would ever be made, and what technology would be available
for transportation of oil to the onshore facilities. Camden
Bay 2 was the sale 50 after remand, and it was an
overturning on the coastal consistency determination,
because of a failure on DNR's part to identify known
geophysical hazards. This is in spite of the fact that the
federal passage with regard to geophysical hazards was less
comprehensive than the passage that DNR had put in their
best interest finding, and they had cited to the only known
survey with regard to geophysical hazards. Demarkation
Point, sale 55, had the transportation issue come up again.
It is the same transportation issue that had been in Camden
Bay 1 and the Porcupine caribou herd. The court ruled that
DNR should have looked at the Porcupine caribou herd, which
is an onshore herd, even though it was an offshore
development. Goodnews Bay, with regard to offshore
prospecting permits, the court redefined the scope of DNR's
best interest finding and said that they were required to
issue a best interest finding for offshore prospecting
permits, and at that time they had to examine the possible
future effects of any mining that might occur if workable
deposits were ever discovered. The administrative
procedures in the legislation arise primarily from sales 57
and 75a. They were cases brought by Trustees for Alaska, in
which Trustees for Alaska had participated little, if any,
in the administrative process. Those cases were settled
after motion to dismiss for lack of standing was filed by
the state. The final impetus was sale 78 in the Lower Cook
Inlet, an oil and gas lease sale, and it was the first time
in Alaska state history that an oil and gas lease sale was
stayed. The basis of the stay was that DNR had not
adequately discussed the habitat standard under the ACMP,
the Alaska Coastal Management Program. DNR had, in fact,
discussed the habitat standard and referred to the
discussion in its conclusive consistency determination, and
the Superior Court itself had raised the argument, not the
appellant, and therefore the preliminary best interest
finding where the analysis was, was not before the Superior
Court. And the Alaska Supreme Court declined a petition for
review in sale 78.
MS. LUNDQUIST then gave an overview of the sections of the
bill, skipping over the ones she felt were minor,
housekeeping points.
Under Section one, there is a statement of legislative
intent, with regard to best interest findings, and ACMP
conclusive consistency determinations covered under the
bill.
Under current law, the best interest finding has to be made
before a disposal lease sale of land, resources, or property
is made. Currently, it is in the director's discretion.
The director is responsible, with the consent of the
commissioner, to make the best interest finding, but other
than to have the basis upon which the best interest finding
is made, stated in the best interest finding, there are no
requirements. Section two is intended to set up some
sideboards so the director is required to discuss the known
information, and information it finds as material. Section
two, under (c), page 4, line 9, is recognition that phased
determinations, phased projects are appropriate under
certain circumstances, and (c) provides that when certain
protections are met, phasing is allowed. Page five, 5(A)
and 5(B) is an expansion of the public notice requirements
from the current 21 days to 180 days and 90 days before the
sale; it is the time limit when public comment can be given.
That is an expansion for oil and gas lease sales. The 21
days currently in the statute with regard to all best
interest finding is retained.
Section three is the "G" list that is often cited to. It
ensures that for an oil and gas lease sale, the Section G
list will still be addressed as well as items known to the
director, and material, and are therefore within the scope
of review determined under Section one of the bill. Section
4, under (h), page 8, line 29 is a statement that the
director is not required to speculate about future effects
which he or she can only guess, about which there is no
current information. Section (i) sets out the
administrative appeal procedure. The test for a person who
may bring an administrative appeal or written request for
reconsideration was a test adopted by the Supreme Court,
with regard to appeals under the APA, and even under one of
the most current cases on best interest findings in the
Alaska Supreme Court, `Trustees For Alaska', the court has
stated that in order to bring an appeal to the Superior
Court, the appellant must have participated in the
administrative proceedings either by submitting written
comment, or by bringing in a written request for
reconsideration. The appeal procedures ensure that
administrative remedies will be exhausted, and the agency,
the court itself, and the legislature have previously
recognized, as having expertise to deal with these complex
issues and matters of fundamental policy, and are given the
opportunity to address and resolve the issues before a
Superior Court appeal is brought.
Section seven, page 11: Expansion of the type of notice
that must be given for best interest findings.
Section eight deals with consistency determinations under
the ACMP, and it is a specific recognition that phasing is
appropriate under certain circumstances, and when certain
protections are met. On page 12, lines 19 - 27 is an
adoption of the federal language with regard to phasing
under the federal regulations, and it is intended that
during a phase consistency review, the state agency will
review the reasonably foreseeable significant effects of the
use or activity for which the consistency determination is
sought. This provision does not impact the ability of the
agency to request from an applicant, additional information
that is related to the reasonably foreseeable effects of the
consistency determination. Ms. Lundquist said if there were
specific questions with regard to any sections, she would be
glad to answer them.
Number 290
REPRESENTATIVE JOE GREEN: "Mr. Chairman, is it your
intention to have the testifiers go through and then ask the
questions?"
CHAIRMAN PORTER replied that yes, that there were nine
people to testify, and he suggested that questions be saved
until individual testimony had been complete.
REPRESENTATIVE CLIFF DAVIDSON discussed with Chairman Porter
about whether or not that is the best way to facilitate the
meeting.
CHAIRMAN PORTER stated that he would like to get through the
meeting and move the bill, if possible.
REPRESENTATIVE DAVIDSON expressed the hope that at least one
additional day could be spent on the bill. He noted that he
had received a letter from constituents regarding work to be
done on the legislation, particularly concerning the phasing
aspect of the bill. Chairman Porter agreed that
Representative Davidson might pose a question to Ms.
Lundquist.
Number 338
REPRESENTATIVE DAVIDSON asked Mary Lundquist a question
regarding Section eight. He asked if she was saying this was
basically the adoption of federal language. He asked if it
results in the same kind of phasing pattern or consistency
with the federal law.
MS. LUNDQUIST said she thought the intent was for this
provision to be consistent with the federal law, as it
stands right now.
REPRESENTATIVE DAVIDSON noted that Ms. Lundquist
specifically mentioned `the intent.' He asked if it does,
in fact, become consistent with federal law.
Number 355
MS. LUNDQUIST said she felt this provision to be consistent
with federal law. She said that the federal program, in the
very least, requires that you look at the reasonably
foreseeable significant effects, and she thought that would
be accomplished by this bill. The phasing language itself,
was adopted from the federal regulations, and it is not the
intent to curtail or shorten the examination of the factors,
facts, or issues during a coastal consistency determination.
The intent, and the way the bill works is to ensure that
when a consistency determination is phased, you have the
most recent information; you actually have facts before you,
before the consistency determination is made. Ms. Lundquist
said she thought there are certain circumstances where
phasing might be appropriate, and maybe there are
circumstances where it will not meet the conditions for
phasing, and it would not be appropriate to phase it.
Number 373
REPRESENTATIVE DAVIDSON said he understood that in the
phasing aspect of federal law, any time a new item or a new
piece of information comes up in any phase, you can go back
and forth within that phasing concept and deal with that
specific. It was his understanding that that is not, in
fact, how this phasing provision would work, if this were to
become state law.
Number 382
MS. LUNDQUIST said it was her understanding, under federal
law, that a consistency determination, once it is made, is
not re-evaluated on a consistent basis. If a fact comes up
later on down the pike once the consistency determination is
made, the consistency determination is made.
Number 400
REPRESENTATIVE DAVIDSON asked if this applied to new
information, as well.
Number 405
MS. LUNDQUIST believed there may be confusion with regard to
information that comes up in a later phase. When a project
is phased, and there will be multiple consistency
determinations; there will be a consistency determination
made at each phase of the project. In phase one, you will
not be examining the facts at phase three. At phase two,
you will know more facts than you knew at phase one. So as
time progresses, and you go through the phases, you will be
examining the facts that are known and available to you; and
the reasonably foreseeable significant effects.
Number 410
REPRESENTATIVE JIM NORDLUND asked about the bill attempting
to set up some guidance, some sideboards for making
determinations. He asked if that is what she meant by
phasing, if she considered these projects in discrete
phases, to be the sideboards.
MS. LUNDQUIST stated that when she referred to the
sideboards, she was referring to "in the best interest
finding" section, Section two, page 3, lines 17-21,
specifically. The phasing is included in those sideboards,
but the sideboards really are, that the director can only be
responsible for known information and is not required to
speculate, and the director makes the determination of
whether something is material or not.
REPRESENTATIVE NORDLUND said one of his concerns about this
bill is, the method used for determining what is `material.'
Who gets to decide? It says the director is given the
authority to decide what is material, and yet there is no
guidance in this legislation as to what is material - none
at all, as far as he could tell. As he understood existing
law, we do have some guidance with oil and gas leasing, in
terms of those kinds of considerations the director has to
make, but with the other kinds of leasing included under
this bill, whether it be coal, or other kinds of mining,
there are no similar kinds of what he would consider
sideboards in terms of deciding what is being decided.
MS. LUNDQUIST suggested that perhaps Director Eason might be
able to address that comment specifically; and she had a
couple of comments on it, also. The word "material" is
currently used in statute with regard to what is referred to
as the "G" list, which is on page seven, lines 21 and
flooding down on page eight, through line 21, "Material to
the following matter" and on page three, when a
determination is made that something is "material," the
items to be discussed are those known to the director, and
items specifically brought up by the public, where the
public comes and says, "This is an issue, and I think you
should consider this." The director would make a
determination whether or not he thought it was material.
That determination would be in the best interest finding,
and it would be a point for appeal to the Superior Court or
after the appeal, and the administrative remedies were
exhausted.
CHAIRMAN PORTER said the fact that he did not consider it,
if it was brought up, is an appealable point though.
MS. LUNDQUIST confirmed that it is an appealable point.
Number 465
REPRESENTATIVE JAMES asked if it were true that if anyone,
including the public, brought up any considerations, they
must be responded to in writing.
Number 470
MS. LUNDQUIST confirmed that Representative James was
correct. All written comments from the public have to be
responded to. If a fact or issue brought up in a public
comment is determined not to be material, that determination
specifically, must be in the best interest finding itself.
Number 480
REPRESENTATIVE KOTT asked for clarification of page 9, line
15. What constitutes an individual having standing, and how
specific does one have to be in dealing with standing? What
is "meaningful participation"? How specific does one have
to be upon appeal? In other words, if you complained of
possible pollution earlier, could you then have standing
later on, in asserting that hydrocarbon pollution is the
issue we are dealing with on appeal? Do you have to be very
specific during the initial process in order to have
standing later on?
Number 498
MS. LUNDQUIST stated that the public would have to be
sufficiently specific, that there would not be a broad gap
between what their public comment was or whatever was in the
request for reconsideration repeal, that there was some
logical connection between the two, and that it was not a
dream between the two. And meaningfully participated is
defined as submitting written comments and presenting oral
testimony, on page 9, lines 17-20. The test, of
"meaningful participated" to be affected by the decision and
factually agreed by it, was adopted from Alaska Supreme
Court cases.
Number 515
REPRESENTATIVE DAVIDSON remarked he knew we were dealing
with both Title 46 and Title 38, and he wanted to understand
if Ms. Lundquist's expertise is in both of these titles, or
does she concentrate, in her task, in one specific area or
the other?
MS. LUNDQUIST responded by saying that she has primarily
dealt in Title 38, but has also dealt quite extensively in
Title 46.
CHAIRMAN PORTER asked Ms. Lundquist to stay at the meeting
in case other questions should arise. He then read the
witness list and announced the first witness, Mr. Jim Eason.
Number 539
JIM EASON, Director of the Alaska Division of Oil and Gas,
Department of Natural Resources noted that for over two
months they had been in the process leading towards the bill
being heard. Judging from the comments submitted for the
record, he believed the committee would be hearing a great
deal of comment saying the process has moved fast, it has
been inconclusive, and resolution has not been reached. He
urged the committee to keep in mind that while the House
has, after the first two hearings on oil and gas, not had
much activity with this bill. On the Senate side there has
been two very long hearings in Senate Resources, transferred
to Senate Finance, and then delegation to a subcommittee
which lead to about five weeks of intermittent work, some
very long days with a group open to anyone who wanted to
participate in the conference in the attempt to draft
amendments that would reach compromise and be answerable to
many of the issues and concerns that have been raised by the
public. Mr. Eason observed that it is seldom you get
everything you want on a bill; sometimes you do; sometimes
there is unanimity, and it is always pleasant when you can
do that.
MR. EASON said he would be available for any questions on
the process, and on the bill. "I believe, and I hope, that
you will hear some testimony that is at least cautiously
supportive of the effort we've made, because we did start
under very adverse circumstances, with a decision that
literally puts at risk every disposal that the state may
undertake, to an injunction. We didn't choose the timing
for that. We didn't expect it to happen, but it happened in
the middle of the session, with a lot of controversial
issues before you, and before us, and so we were thrown,
literally, into the brier patch with a very controversial
bill, with a very short time to try to create a solution
that would be answerable to public concerns, but at the same
time, provide the safeguards and sideboards that we need to
assure that you make policy, and that the court does not."
MR. EASON said he believed that ultimately, the
predictability that will be brought to the process by the
legislature defining its goal and its concerns in this
legislation, will be productive for everyone. It will set
the ground rules more clearly for the court, but also for
the agency. It will also set the ground rules for those who
want to litigate, as well as those from the public at large,
so that they understand that they have an opportunity to
participate fully. That also brings an obligation to
participate fully or meaningfully in the process so that you
define what your concerns are with enough specificity that
the DNR can try to resolve them. He cautioned, "But it is
important to acknowledge, and I will today, that we won't
always do everything everyone wants us to do when we prepare
a lease sale. We simply can't. Otherwise we wouldn't have
lease sales, because the process simply is not one that
pleases everyone in every case. But we have made, not only
in our lease sale efforts, but, I believe, quite honestly,
in this legislation, a good faith attempt to listen
carefully to every concern and to move directly to correct
things that we knew and believe were wrong, and to increase
the public process, and public opportunities to participate
in this legislation."
MR. EASON noted there were four or five issues that some
people who participated in this process wished on that day
to see amended and accomplished. Mr. Eason wished the
committee to understand that in the course of the process
more than 40 amendments had been made, some of them very
substantive; some of them very expansive of the ability to
participate, and for the DNR's obligation to listen and
respond in writing, and to have a better record for appeals,
for all other purposes, and that effort had been made. But
there remained four or five issues which he believed should
not be resolved by further amendment, if possible, because
this might put at risk the protections intended by this
process. Ones that assure the legislature is not brought
back into this kind of battle every year, and one that
assures the courts are not invited to make new law
concerning disposals. Mr. Eason expressed the belief that
it was important that this legislation balance interest,
that it provides for full public input, full agency
response, and full legislative participation by setting the
guidelines. That has been their attempt. He said that had
been their attempt and he hope it would be seen as
successful.
Number 610
REPRESENTATIVE DAVIDSON: "As a former chairman, I know that
I always cringe when I am told that the `other body' has
done our work. We are a separate body. And frankly, I
don't give a damn what they do on the other side. So it
always grates me when we say, `Well, in the other body, they
did this, they did that.' But as a matter of fact, we know
that not everyone was given the full opportunity to
participate in that other body. As far as the briar patch
is concerned, Mr. Eason, you are quite a capable rabbit, I
know that.
"The other problem is that it seems that every time we go
through the system and a party prevails, we are back the
following legislative year trying to overturn the court
decision. I have some misgiving as to why can't we get
right one of these times. Maybe this is the time. But if
I'm getting letters from my constituency back home, and I
represent that great area of the state where 70 percent of
our people live and make their livelihoods, of course,
there's a great deal of interest when certain local
traditions or power or abilities to respond to what the
state is doing in that area, as far as disposal or
developing resources -- There's going to be a certain amount
of concern at that local level. And that's what I would
like for us as a committee to respond to. What is it that
our local constituency, that is, our local planning
commissions, our coastal zone management people are doing to
ensure that they are players in the process? And that's
what I'd like to find out.
"As regards all agencies, it's my understanding that the
Department of Governmental Coordination, or the Division of
Governmental Coordination, was in fact not a part of this
process in the Senate. You can say yes or no to that Mr.
Eason, but it seems to me when everybody's interest is
involved here, we have to take the time that is necessary,
whether that's one year, two years, or a dozen years, to
ensure that we all have a say as to these important
decisions on what happens in our local areas. Thank you
very much for that digression that you allowed, Mr.
Chairman."
Number 660
REPRESENTATIVE NORDLUND said he has been looking at this
bill and talking to a number of people, and frankly, he was
trying to understand it. It is not the kind of bill you
normally hear in the Judiciary Committee. Normally, this
would go to the Resources Committee. Concerning the phasing
proposal, he asked for a concrete example of the kind of
project that would be phased, and what the phases would be.
Number 665
MR. EASON explained that oil and gas leasing is a concrete
example of a phasing disposal. For a number of years, we
have proceeded with oil and gas leasing as a phased decision
making process. We issue best interest findings, based upon
the reasonable expectations that all the comments received
from the public and from agencies, and concerns expressed,
plus the review of the factors set out in the statutes, with
an attempt to rationalize how those things may affect the
area, or how they may be affected by a lease in the area
under consideration. And there are certain things we can
reasonably accept, but we do not know for certain will
happen, but it is reasonable to assume there will be some
exploration. And if there is exploration, it is reasonable
to assume there are things you are absolutely going to
require every time. For example, you will require
consistency with DEC's solid waste and other disposal
provisions. You will, if there are special critical habitat
areas involved, the Department of Fish and Game will notify
you in advance. It will be part of the finding of what will
and what will not be allowed in those areas, within the
sale. If there are critical habitats that for one reason or
another Fish and Game insists not be exposed to surface
entry, those things will be identified. A finding will be
done and a consistency determination made based upon some
expectation. But what will not be done, at that point, is
speculate about where a discovery may ultimately occur, how
large it is, and how you might get to it with a pipeline, or
otherwise with marine transportation, because it is simply,
we believe, a very poor use of resources to speculate on
multiple alternative developments that are far removed in
time, if ever they are going to occur. And my
interpretation of your guidance in this bill will allow us
and will show the court that it is appropriate, best
interest finding-wise, for an oil and gas leasing sale, to
do things we have done.
MR. EASON stated this bill requires additional findings, and
additional rationalization of materiality and non-
materiality, and lots of public dialogue that currently is
not required by statute. But ultimately, it recognizes the
decision will be to lease with the safeguards we know are
going to be necessary regardless of what happens, with a
further understanding that things happening in the future
will have to go through further permit reviews, so they can
be conditioned as appropriate at that time, to make sure
they are in conformance with the coastal zone management
act, and that they continue to protect the state's interest.
Number 700
REPRESENTATIVE NORDLUND asked if the phases then would be to
first issue the lease and then, say it is to an oil company,
and they come to you and they say, "We are interested in
exploration." Then the next phase would be permit for the
exploration, and the next phase would be a permit for
production. He asked if that is the kind of thing Mr. Eason
was talking about.
Number 705
MR. EASON replied generally that would be the pattern, and
it is really important to understand because there has been
some confusion early on. One of the concerns was that DNR
controls the process after leasing, and it is the fox and
the hen house concern; once we have made a best interest
find to lease, then we are just going to routinely approve
these other phases. And, in fact, DNR's control to the
extent it has any -- First of all, it has none,
unilaterally, even at a lease sale, because the consistency
determination that issued is agreed upon by the Division of
Governmental Coordination, Fish and Game, DEC and DNR. All
agencies have to agree with a consistency determination or
it cannot be issued. It gets elevated and resolved at some
higher level. But even though that control by DNR is
limited, it is the last time there is any control at all of
that process, because all the future events, drilling, the
building of production facilities, the laying of pipelines,
all of those possible things come under multiple permit
scenarios, which require that the Division of Governmental
Coordination to coordinate all that and render the
consistency determinations. They take our opinion, but it
is only one of many.
Number 725
REPRESENTATIVE NORDLUND asked about the Camden Bay case. It
seemed to him that it is reasonable that you would have to
confront the transportation issue, at the very outset. It
was a lease that was being developed offshore, and there was
going to be a need to somehow transport materials and oil
from offshore to onshore. So how does this bill help you
with that?
Number 730
MR. EASON said this bill would signal to the court that the
level of analysis is what you reasonably can assume, or
reasonably expect. That it does not extend to having to
speculate that a discovery will be made 25 miles east of
some point, and then try to determine all the alternatives
you might have -- buried pipelines, suspended pipelines,
offshore loading of tankers, offshore loading of ice-
breaking tankers, all those things that may, farther than
anybody can conceivably think, be possible at some point in
the future; do not have to be argued, essentially, in the
record as to which one is better. But the protection you
have built into the law today, and would have continually
under this bill, is that all those issues do not get
disregarded, they get considered when there is enough
information to know the discovery has happened and to make a
factual analysis based on where it is, how large it is, and
what all the alternatives are at that time under then
existing law and technology.
Number 740
REPRESENTATIVE NORDLUND referred to a line in the bill that
says "reasonably foreseeable significant impacts." Under
the language in this bill, does that mean you would be
looking at impacts beyond just present impacts, but also
future impacts that are reasonably foreseeable, they could
be cumulative?
Number 747
MR. EASON said Representative Nordlund was correct. That is
required today under the "G" list, for oil and gas lease
sales, and we would still do that.
CHAIRMAN PORTER introduced Peter Van Tuyn, from Trustees for
Alaska.
Number 752
PETER VAN TUYN, Representing Trustees for Alaska, a
nonprofit, public interest environmental law firm has been
dealing with natural resources issues in Alaska for the last
twenty years. "We have got several serious concerns with SB
308. Mostly, they stem from the fact that the bill
significantly alters the best interest finding requirement
and the requirement that activities in Alaska's coastal zone
be consistent with social, cultural, and environmental
safeguards. These alterations substantially limit
meaningful public participation in government decision
making. The alterations also steer the decision making
process toward the result that the administration, the
current administration supports, whether it be pro or anti-
development. We do not feel this bill is anti-development,
or pro-development, per se. The amount of discretion it
gives to DNR, to state agencies can go either way. It
depends on the whim or the policy decision made by that
current administration. How does Senate Bill 308 do this?
Under the proposed legislation, a state agency making a
decision regarding a public land disposal, or an ACM
consistency review has total discretion to limit the review
of such actions to issues he or she considers material or to
issues which he or she assert relate to a later phase of a
particular proposal. SB 308 gives the state agency the
authority to conduct a piecemeal review of such an action.
Let's take an oil and gas lease sale as an example. SB 308,
as we have heard, permits DNR to declare that a lease sale
is broken up into many different phases.
"Representative Nordlund mentioned exploration as one phase,
production as another phase. DNR could simply declare that
a lease sale as the first phase is merely a paper
transaction. I pass you a lease, as an oil company; you
pass me some money. That is the entire phase. Under this
bill, issues raised by the public regarding later phases,
whether it is the exploration or production phase, can
simply be declared immaterial, or if it is a phased project,
DNR can say that they are immaterial and disregard them.
Because none of the costs of the later phases are factored
into the equation. Again, the best interest equation is
basically a cost benefit analysis - in loose terms, it is
not purely economic; social, cultural, and environmental
concerns are factored in as well, as are economic. In that
equation, in that balance, phasing the situation allows any
state agency, it allows the current administration, to take
the costs of those later phases and zero them out. Just
say, `This is merely phase one, this is a paper transaction
of a lease sale.' In itself, it has no impact on the
environment, unless you get a paper cut from the document.
But yet, the benefits are huge. They are quite high. The
benefits are royalties from production, and that best
interest equation and the phasing in this bill does not
require the state agencies to disregard the benefits down
the road, it just allows them to disregard the costs.
Moreover, and perhaps what is most disturbing about SB 308,
is that it does limit the opportunity for meaningful public
participation in the government decision making process, not
only through DNR's authority to disregard concerns about
later stages, but because it changes standing doctrine in
Alaska, in a very significant way.
"Who is affected by a lease sale? If a lease sale is a
transfer of paper, I'm concerned about the impact of
development operations, and possibly an oil spill on the
beaches where I fish, the paper transaction itself, does not
authorize that -- `That is a different phase, it is later
down the road. We will look at it later.' How am I
affected by that lease sale? I am not is the only answer I
can come up with. In SB 308, you are only allowed to appeal
the decision if you are affected by it. It is not defined
in the bill, but if we look to federal law for a definition,
a reasonable thing to do under the standards of the courts,
then we get the conclusion that you have to have an injury
in fact. And if my injury only comes from the oil washing
up on my beach where I fish at the development stage, and
that stage is not being considered at the lease sale stage,
I have no standing to argue that later in discussion. I
have no injury.
"Additionally, we have heard here today, as well, that SB
308 intends that phasing be in line with the federal
language. I believe that the language that I heard was that
the phasing in this bill is not intended to curtail or
shorten any evaluation that is being taken place. Under the
federal phasing under the Coastal Zone Management Act, the
phasing is used to allow ongoing review of a project, mostly
long-term projects that can be broken down into various
phases. Known information is not disregarded in that phase.
But if we look to the statute in SB 308, and I'll
specifically point the Chairman to Section 8 on page 13, at
line one, this talks about the DNR's discretion to `limit
the consistency review.' I think the difference between
curtail, shorten and limit - I'm not sure what it is, but if
I look to where the court is going to look, where the agency
who is implementing this is going to look, I see the word
`limit.' It comes up again on line 10: DNR shall when the
consistency review...is `limited' under this section,
conducted for the particular phase, and so forth. And that
is not in line with the federal intent. Again, the federal
intent is to broaden the view, so that you can get a
comprehensive look at an ongoing project that is long-term
in nature.
"At best this bill raises many complicated issues. The
issues impact, as I heard Representative Davidson say, 70-75
percent of the population in Alaska, because that is the
number that lives in the coastal zone. True, there have
been various meetings to work through this bill, and try and
come to consensus on various issues, but for various
reasons, no need to get into them, they have all failed and
if we can take a look at what, in the past, has been the
position of the administration in dealing with issues which
affect the coastal zone, we need look no further back than
the beginning of this session with SB 238. Coastal Policy
Council, petitions for review, issues that deal with the
coastal zone in Alaska. And those issues were again, I
believe, brought to the floor as a result of the Camden Bay
Demarkation Point appeal to the Coastal Policy Council, and
there was some concern that that process needed some fixing.
So what did the administration do? The administration went
to the coastal districts and said, `Please, sit down at the
table, let's work this out together. Let's come to some
sort of consensus on the issues.' And they did so, and it
breezed through here earlier this year. At the least,
that's what needs to be done here. The coastal districts
need to have a chance to sit down with all the interested
parties, including the administration, and work through
this. And if the problems are real and the solutions are
there, they will come, along with the administration and any
other interested party, back to this body in the next
session.
"Finally, I have two points. I abhor getting into the
details of the litigation absent any questions, but just to
give you an idea of the difference of opinion that has come
about because of litigation over the years, I heard, again,
the state discussing the Demarkation Point sales as one
example, pointing out how unreasonable it was for the court
to require that the DNR analyze the impact of the
Demarkation Point sale on the Porcupine caribou herd, which,
I think the language was, is onshore of the Arctic National
Wildlife Refuge. Regardless of whether or not it's onshore,
and that's certainly debatable, we do have clear evidence
that the caribou are in the water. This is the coast of the
National Wildlife Refuge. These caribou are standing in
either the Camden Bay lease sale or the Demarkation Point
lease sale. Their feet are wet. And under the terms of
those lease sales an oil platform could be put - (text lost
to tape turn over.)
TAPE 94-63, SIDE B
Number 000
MR. VAN TUYN: (text lost) " - come through the Alaska court
system. The point is the court decided the way it did for a
reason. We will deal with that. If there is a problem with
that, focus on what the court said, not what should have
been argued in front of them, or what they did wrong in the
analysis. That is all I have to say, I appreciate your
time. I will stay around for questions, if there are any."
REPRESENTATIVE DAVIDSON said he has heard not only
individual property owners are affected by the changes that
would result if this were to pass, but even many businesses
would be adversely affected. He asked Mr. Van Tuyn to
expand on some of the areas where smaller businesses would
have cause for concern with the changes brought about by
this bill.
MR. VAN TUYN: "I think that could happen in two ways.
Number one is, in the bill, and this is probably a point
that's been raised before, there is a provision that
requires that economic - it's on page nine, it's in Section
four of the bill - that talks about DNR's ability to say
that the economic feasibility of ultimate development need
not be considered to the extent it involves speculation.
And I think that the term `economic feasibility' really
needs to be defined, and it should be clarified, that that
includes not only economic benefits, but detriments as well.
This could, in other words, blindside a coastal community
that, given a comprehensive analysis of economic feasibility
up front, could maybe identify some of the problems that
could arise. Well, oil could potentially have an impact on
the fishing revenue of this particular area, so be prepared.
That's an issue that's going to come up later on. Under
this speculation standard, here, that you don't have to look
at that economic feasibility, DNR can call it speculation,
they'll get a lot of deference on that, and it could
blindside that small business when down the road it gets
dropped there, and they're out of business, and they're not
allowed to go back in that area. That is one way it does
it.
"The second manner in which I believe that it affects all
business...is that in an administration that has a slightly
different policy stance on these things, the amount of
discretion can also work to expand the scope of analysis.
You can define what's material to the ends of the universe,
so that every little nit-picky thing will be factored in,
and something like the (indiscernible) situation in Point
McKenzie near Anchorage, could get papered to death, and I
think that's some of the concerns, certainly that I've
heard, form the coastal district."
Number 068
REPRESENTATIVE JAMES: "My question is regarding
speculation. Many, many times when we have any kind of an
economic activity, whether it be a lease sale, or whether it
be a production further along on whatever stage you're in,
and making up the decision as to what the effect of that
application is going to be to the area, and so forth, there
is a lot of speculation, and some of the speculation that I
can anticipate is, you have to decide all the things that
might just happen. And one of the things that I see that is
in this bill, is to prevent, so that we don't get into the
speculation where the speculation of something that might
happen, will totally destroy the ability to even go forward,
just because that might happen. And so phasing does make
sense to me. The only thing that I'm concerned about is
that in the second or third phase or whatever the phases
are, that the decision to go or no-go, is still a decision:
It's not a go, go, go, but it's a go or no-go. And I
believe the protection is in there. But wouldn't you think
that it would be smarter for all of us to just deal with
what we know as opposed to what we speculate might happen?
Because we could get in a totally different direction (than)
what we'll ever get if we can just get to one step at a
time."
MR. VAN TUYN completely agreed with her that we can only
analyze what we know about the impacts of an activity, so
the only thing we need to do up front, and this is what the
federal phasing discussion focuses around as well, is what
we know about those impacts, but impacts are only half of
the equation. The other half of the equation is the
activity that is the actor here, that is going to have that
impact. That is where we believe some speculation is
warranted, and the speculation is simple. It is this, and
this alone: That in an oil and gas lease sale, in a
situation where the state is disposing of land for oil and
gas development, it is perfectly reasonable to assume, to
speculate, if you will, that oil and gas development will
occur, and that in a mining situation, it is perfectly
reasonable to assume, to speculate that mining will occur.
You do not have to know exactly where. You have a broad
area of fishing ground three miles wide and twelve miles
long. And it is extensively fished with 400 drift net boats
trailing 900 foot nets, and about 600 set nets from the
shore extending out a mile and a half; and it is reasonable
to assume if someone is going to buy an oil tract in that
area for oil and gas development, that it may occur, and
that is a speculation, I will grant you that, but what we do
not speculate is what the impacts are going to be if it does
occur. Those impacts are based on common knowledge, based
on the experience of the captains working in this particular
fishery, and that experience told us in the sale 78
situation the fishing activity would have to stop. And so
it is a two sided coin. We have the impacts, which, no
speculation, phasing in the federal government would say, no
speculation on impacts, but when we get down to later phases
at the exploration and development stage and our pool of
knowledge is so much broader, and, again with no
speculation, we take the known facts and we apply it to
those activities and see what the impacts are. Speculation
does occur though, on the activity, and I think that is
reasonable given the purpose for which the disposal was
provided in the first place.
Number 155
REPRESENTATIVE GREEN asked Mr. Van Tuyn if he was aware of
how many platforms are in Cook Inlet.
Number 165
MR. VAN TUYN replied that he thought there were 21, or 19.
REPRESENTATIVE GREEN said he thought there were more like 15
or 16, and asked Mr. Van Tuyn if he was familiar with how
close they may be to shore.
Number 187
MR. VAN TUYN said he was roughly familiar.
REPRESENTATIVE GREEN asked if the platforms were within the
set net areas.
MR. VAN TUYN stated that he was not an expert on this, but
as far as he knew, he did not believe that any of the
existing platforms in Cook Inlet are in active set net
areas.
REPRESENTATIVE GREEN said because of environmental
restriction, and in an economic sense, they are not there;
because they can reach that from shore and that is a less
expensive operation. And so, for that area of concern,
along the fishing areas, set netting and so on, there will
not be platforms at the shoreline, just as was indicated on
the caribou, that there might be a platform right there; it
would not happen there, because they would reach that from a
shore site, simply because it is a lot less expensive. And
finally, are you aware of the cooperation that has existed
in the central caribou herd, and the field operations, where
the number of caribou, since that operation has been in
effect has increased six-fold?
MR. VAN TUYN answered that the question of whether or not
offshore tracts can be accessed from onshore directional
drilling, is exactly the point. In the sale 78 litigation.
If that is true, and, in fact, is what the oil companies
would like to see, let's require it in the lease sale, let's
make sure that those costs are factored into the oil
company's decision on how much they want to bid for a
particular area, and as the technology would demonstrate in
most areas, albeit not all, the directional drilling
techniques can get to three miles out, if they are on shore.
Number 240
REPRESENTATIVE NORDLUND noted that it depends on the depth.
Number 243
MR. VAN TUYN agreed that yes, some geological factors are
involved, as well. But where it is possible, let us require
it at the lease sale, so the oil companies know what the
costs are up front. And the public, especially the fishing
public knows that their livelihood is not going to be
jeopardized, because they cannot move their operations.
Those fish are coming through that particular area - Fish
and Game, and it's expert opinions so that's the place for
fishing. As far as your second question, dealing with the
Central Arctic caribou herd, and the interaction of that
herd with the industry; the type of information that an
attorney will rely upon in bringing a lawsuit, is something
that can stand up in court. Scientific text is relied upon
to tell what the impacts are on caribou. Certainly your
experience and the oil companies' experience in dealing with
the Central Arctic herd is highly relevant to the impact on
the Porcupine caribou herd. It certainly is. So let us
examine it. That is all we ask. Let us examine it. Let us
talk about it. Let us put it in the final finding. Let us
not say that the oil and gas development is not going to
have an impact, or whether it is relevant. Whether or not
it has an effect is irrelevant. That was the Demarkation
Point sale. As of one point of clarification, the
Demarkation Point and Camden Bay lease sales were offshore
of ANWR, so they could not have been accessed from land,
which is one of the bigger issues there, because the refuge
is off limits to oil development at this time.
Number 245
REPRESENTATIVE NORDLUND asked Mr. Van Tuyn if he was the
attorney on the Camden Bay case.
MR. VAN TUYN said he was not, that he has been attorney of
record only in some cleanup duties in the second Camden Bay
case.
Number 252
REPRESENTATIVE NORDLUND said that was a trustees lawsuit,
and asked Mr. Van Tuyn if he was familiar with it at all, to
which Mr. Van Tuyn replied that he was. Representative
Nordlund continued, "The question I asked Mr. Eason about
the issue of the transportation - I'm still trying to figure
out what the best policy call on something like that is. I
think he makes the point that, certainly, there probably is
going to be some transportation but it's very difficult to
know the siting of those particular - where, you know,
wherever the discovery is made. And who knows what the
impact is going to be, given that, and how the oil is going
to get transported, and what not. I just wondered if you
had a comment on that and could shed some light, perhaps, on
what the courts - "
MR. VAN TUYN said that similar to the Porcupine caribou herd
in the Demarkation Point case, in the Camden Bay case the
court said you have to look at the important factors, and
those factors are not defined, at that time they were not
defined, DNR came to you and asked you to help define what
those important factors might be after that case. What is
an important factor? Let us look at a particular area.
Camden Bay is offshore of the Arctic National Wildlife
Refuge, it is east of existing transportation facilities,
and the technology that will need to be used to get oil from
any development, again, not saying that development is going
to be right here, but just saying it is reasonable to assume
some development in this area will occur. Examine the
methods you could use to bring this offshore oil on shore to
transportation facilities when you cannot use the adjacent
land mass. Tell us what your first cut is of the relative
risks of each of those methods. So it is not a question of
saying what site it is and how long it is going to be and so
forth. It is a question, though of examining current
scientific and technological engineering methods of
transportation; examining their relative risks, and then
making the call as to whether or not it is still in the best
interest of the state to proceed with this.
MR. VAN TUYN further stated, so again, you have to focus on
what is an important factor, and that is going to be
different wherever you are. In Cook Inlet, it turns out
that the court felt that fishing was an important factor.
Mr. Van Tuyn thought that was reasonable; would not be if it
were in the north of ANWR.
Number 289
REPRESENTATIVE NORDLUND stated that Mr. Van Tuyn said that
under the provisions of this bill the department can look at
the long term negative and positive aspects of a project,
but not the negative; the costs. You can look at the
benefits and not the cost, and he asked for a comment from
either Mr. Eason, or the Department of Law.
Number 294
CHAIRMAN PORTER welcomed the next person to present
testimony. MR. JON ISAACS in Anchorage was scheduled but
not present as he was due at a city council meeting. His
testimony was presented by Ms. NANCY WAINWRIGHT from
Anchorage.
Number 305
NANCY WAINWRIGHT of the office of Jon Isaacs and Associates,
Consultants, read JOHN ISAACS' testimony via teleconference
from Anchorage.
"Thank you for the opportunity to testify today; in my
testimony, I am speaking for myself and not representing
anyone else's opinions.
"As a member of an informal coastal district working group,
I have been participating in the review of Senate Bill 308
with representatives of the Department of Natural Resources
and Mr. David Rogers, who has been representing your
committee. Over the last two months, I have participated in
several Senate Finance Committee meetings and work group
discussions to develop a bill that addresses the concerns of
the Department of Natural Resources without creating
significant problems for the coastal districts and other
municipalities.
"I appreciate the efforts of Mr. Rogers and others and they
have attempted to address many of the issues brought before
them. On the afternoon of April 15, a small group of
individuals worked on the significant outstanding issues
identified by the informal coastal district working group.
I should mention that this group does not represent or speak
for all coastal districts, many of whom have other valid
concerns regarding this legislation. In this meeting, we
came to consensus on many of the major issues, with a few
exceptions. The issues where there are still some
differences regarding language or resolution include:
(1) use of `may address only' vs. shall address
reasonably foreseeable significant effects related
to the use in Section 2 (A) of the bill. DNR's
verbal intent is that, at a minimum, reasonably
foreseeable significant effects related to the use
will be addressed. The appropriate language needs
to be used;
(2) standing to request appeal or reconsideration
of a best interest finding; I understand that DNR
is looking into what language may be more
appropriate;
(3) in Section 8, page 13, line 22, the concept of
material to the consistency determination has not
been previously used or defined; I would prefer
the term relevant be used in its place or that
material be defined;
(4) Finally, I understand that some municipalities
are still concerned about the lack of guidance
regarding other best interest findings besides oil
and gas, mining, timber, and commercial
recreation; while language in the bill requires
addressing reasonably foreseeable significant
effects related to the use, and the basis of
phasing can be appealed, I strong suggest that DNR
continue to consider other solutions.
"While this bill is not perfect, many of the major concerns
have been addressed. Resolution of the outstanding issues
would improve this bill further. Thank you."
CHAIRMAN PORTER invited Theo Mathews of the United Cook
Inlet Drift Association to deliver his testimony via
teleconference from Kenai.
Number 385
(TAPE IS DAMAGED AND SOUND QUALITY IS POOR)
THEO MATHEWS, Cook Inlet commercial salmon permit holder,
spoke representing Cook Inlet commercial fishing
organizations in general, and United Cook Inlet Drift
Association in particular, where he serves as an
administrative assistant. He was also representing United
Fishermen of Alaska, a statewide organization comprised of
21 regional associations (indiscernible) from Ketchikan to
the Bering Sea. "I should probably also note in my
introduction that UCIDA was a plaintiff in the
(indiscernible) lease sale 78 in the Cook Inlet, and we have
major disagreements with the characterizations presented by
the Department of Law in that process." Mr. Mathews said he
had submitted some brief written comments to the committee
and hoped the committee had received these and past
testimony as well. CHAIRMAN PORTER responded that these had
been received. Mr. Mathews noted that he hadn't been
notified that he would be testifying until that morning.
(Discussion amongst committee members concerning
availability of written testimony.)
MR. MATHEWS stated, "I also would like to stress that even
though this has been a long and arduous process in the
Senate, as Representative Davidson mentioned we are now in
the House, and this is a major public policy issue, major
issues that have not been resolved, in our opinion. We
would hope that there would be time for some statewide
public comment as the House deliberates this major issue.
(Indiscernible) the UCIDA and UFA both oppose the version of
308 sent from the Senate, in the letter I sent to Chairman
Porter last evening, I did note that our major concerns have
not been resolved about this legislation.
"The first major concern that has not been resolved is the
ability of the Department of Natural Resources (DNR)
director to phase best interest and consistency findings
that allow the initial disposal of the state's resources; a
disposal which grants the property rights (indiscernible) to
be treated at the director's discretion as a paper
transaction. This concept of a paper transaction at the
initial disposal stage is irresponsible and perverts the
public process.
"The second major issue that was identified early on that
has not been addressed by any version of this legislation,
is the inclusion of non-oil and gas disposal under this
legislation.
"Finally, I should note that at the last minute in the
Senate, without knowledge of any of the working members, in
Section 4, was added to this bill which drastically limits
the ability of the public to request reconsideration and
file appeals.
"I've been trying to think of some analogy to represent
where we are in this situation and how it evolved. The best
one I could come up with is the idea of buying a new car.
If you go into the lot, and you get in, and your car won't
start, and you find out the engine is kaput, you have a
fundamental problem. If the dealer says, okay, I'll take it
back, give it to my experts, they'll fix it in the shop.
And then you come back and all you find is a new paint job,
new tires, but the engine won't run. You still have a
fundamental problem. Essentially, that is the situation
that commercial fishermen find themselves in with respect to
this bill.
"I will try to speed up here and run through the two major
issues that are occurring once again. The first concerns
this issue of all case disposals being included, and not
just oil and gas. This would include mining, timber and
(indiscernible) water rights. We have repeatedly pointed
out to DNR that these (indiscernible) of issues exist when
dealing with oil and gas disposals; that's the "G" list that
AG Lundquist mentioned. There are, however, no standards
set for non-oil and gas disposals. In the working group
jargon there are no sideboards for these disposals in this
legislation.
"Commercial fishing groups statewide have many different
varying concerns. But in all areas of the state we have
concerns for non-oil and gas disposal. There has been much
public comment on this issue, and I feel there is absolutely
no public understanding of how non-oil and gas disposal
would (indiscernible) under this legislation. We think at a
minimum these issues of non-oil and gas disposals should be
eliminated from the legislation.
"The second major concern we identified is the unprecedented
discretion - and I stress the word discretion - granted DNR
directors to establish the scope of administrative review
and to limit the review at his discretion to discrete
phases. This discretion, as has been previously noted, can
cut both ways. Depending on the inclinations of any given
administration, this legislation could be used either to
impede development or to promote development. As presently
worded, phasing permitted under this legislation would allow
DNR, at its discretion, to treat the initial disposal as a
paper transaction. This puts the public in jeopardy in four
very important ways.
"The first problem, it grants the property rights to the
lessee. This property right has been recognized by the
courts. And in fact I think we all concur with it. Once
you have granted a property right, you get into the issue of
takings. And we find that mining disposals, timber
disposals (indiscernible) noted in lease sale 78 that
essentially you have granted a property right and you cannot
unreasonably restrict the use of that right without
compensating the lessee. You (indiscernible) to say that
therefore once it's issued the lease, the state is under
tremendous pressure to let the lease go forward for the
exploration and extraction. So the first thing you've done
is, you've given a property right to a lessee. And, under
the paper transaction scenario, no comments, no concerns of
the public, even if (indiscernible) are relevant to the
decision to grant that property right.
"The second problem for the public with this legislation is
that once the property right has been granted the public
must follow individual tracts, individual sales, throughout
each phase and make comments and try and make those comments
relevant to that phase. It's a time-consuming nightmare.
"The third issue...for the public is that when your concern
finally does become relevant, the only option for the state
if it decides that your concern is important enough that
it's not in the state's best interest for the project to
proceed, the state has to buy back the (background noise and
conversation mar sound) that it gave in the first place.
"And finally, the issue of standing, and what DNR must
consider, in terms of speculation. DNR is free to speculate
about the benefits of the lease, but it is not required
under this legislation to look at the downsides.
"Thank you for your time and this opportunity to comment."
Number 525
CHAIRMAN PORTER welcomed Walt Furnace of The Alliance.
Number 530
WALT FURNACE, General Manager of the Alaska Support Industry
Alliance, testified in support of SB 308. The Alliance is a
business organization comprised of 300 companies and
individuals who provide support services to the resource
development industries throughout Alaska. A lot of our
emphasis is up on the North Slope and into Kenai. The
Alliance has had an opportunity to participate and review SB
308, and we are in support of this legislation. It
clarifies the authority of the Commissioner of the
Department of Natural Resources, and contracting for lease
of land under the State Oil and Gas Lease Program. The
Alliance has maintained a very strong presence in support of
this legislation and in the various lease sales held
recently in Alaska to include those in Cook Inlet, 148, 149,
85, 85a, and lease sale 78, of which I believe a lot of this
legislation is the result. We are concerned with the delays
caused by the courts and their various injunctions, in
particular, lease sales in the Kenai area, and we see Senate
Bill 308 as a vehicle to address many of those concerns.
MR. FURNACE continued, under the Constitution of the State
of Alaska, the legislature is empowered to develop the
resources of the state to the maximum benefit of the people
of the state. And over the years, the legislature has
passed various statutes, and regulations have been enacted
to carry out that, and part of that is the State Oil and Gas
Leasing Program. As a deliberative body, as a policy making
body, your responsibility is to look at those resources and
see how we can best develop those to that maximum extent. A
great deal of credit goes to members in the other body, and
particularly Mr. Eason, under the Division of Oil and Gas,
for being quite sensitive to the various concerns brought to
the table, concerning oil and gas leasing. They have done
an admirable job of taking these various testimonies,
merging those into this piece of legislation, with the hopes
that they have reached out, they have provided the various
avenues by reaching out, and putting those concerns in this
bill. Thousands of hours, no doubt have gone into this
effort. And for that, they should be commended. Those who
have voiced concern with this legislation remind me of a
time I went shoe shopping with my wife, and after several
hours of trying on various shoes, in various sizes and
various colors, and the store was about to close; she still
had not made a decision. It prompted me to say, `Honey, you
know, the store is closing. The time is late. You need to
address this issue. Let's pick a pair of shoes. Let's go
home.' Well this is a very important issue for you as
policy makers to look at. The time is late, this store is
closing within the next 14 days. I would press upon you the
importance of this legislation. The Oil and Gas Leasing
Program is very, very important to the future of the revenue
stream of the state of Alaska. Without leases, there is no
production, without production, there are no revenues, and
without revenues, you, ladies and gentlemen, are going to
have to scurry all over the place looking at the fishing
industry, or whatever, as additional tax base. We have a
golden cow in hand that produces 85 percent of that revenue
right now, but it needs leases; it needs the ability to
produce in order to do that. On behalf of The Alliance, we
see SB 308 as a vehicle to provide that base and with that
in mind, we would ask you to favorably look at this
legislation, and we would encourage you to act very speedily
towards the passage.
Number 600
REPRESENTATIVE PHILLIPS asked Mr. Furnace's opinion, had
this bill been in place for Lease Sale 78, on the affect it
would have had on public testimony and public participation
in that particular sale.
Number 606
MR. FURNACE answered when you consider the findings in this
bill, the phases of the bill that address specifically,
public testimony, and how that is to be conducted; when you
consider, also, that the courts have ruled that while the
Department of Natural Resources, the Division of Oil and Gas
have followed current statutory language to the `T', that
that is not enough and so in the findings of this bill, in
other sections of this bill, they have beefed up those
public avenues into the process -- had those been in place
at that time, I am of the opinion that Lease Sale 78 would
be a reality right now, and the companies could be looking
favorably toward those projects.
Number 618
REPRESENTATIVE PHILLIPS said that was one of the biggest
concerns expressed by the people in Kenai Peninsula on Lease
Sale 78; that there were not the protections for the public
comment period and the public discussion period, and this
bill corrects those problems.
Number 625
REPRESENTATIVE DAVIDSON said it was good to see Walt Furnace
again. They served many years ago together, but in regards
to some of Mr. Furnace's analogy, Representative Davidson
added that, without more fish, there is a lot fewer Alaskan
livelihoods, and he can appreciate the Golden Goose here,
but when we go back always blaming the courts; the courts
are not deliberately trying to shut down oil and gas
leasing, and that is, in fact, one reason to keep hammering
away in trying to understand this better. Article 8 of our
Constitution, Section 2 under "General Authority", it reads,
"The legislature shall provide for the utilization
development in conservation of all natural resources
belonging to the State, including land and waters, for the
maximum benefit of the people." And therein lies the
challenge to our judicial system.
REPRESENTATIVE DAVIDSON said it is not an easy task to weigh
and balance out these different difficult allocations of
resources, and so while certainly, we all want to move
forward with the development to the maximum extent possible,
at the same time, we do have conservation concerns; we do
have benefit distribution concerns, so when we rush to
conclusion such as this bill is attempting to do, because of
this letter I would like to pass out later, it did come to
the committee, but at a later point I would like to
emphasize that we have lots of local communities that have a
lot of livelihoods that are dependent upon fishing. They
have these concerns, so while, certainly we want to expedite
development of our resources, and maximize benefit, we
cannot just out of hand dismiss why the court has proceeded
as it has, and attempt to blame that separate branch of
government for not doing their job, because for the most
part we have difficulty understanding what that other branch
of government's job is.
Number 660
MR. FURNACE responded, saying it is the opinion of the
Alliance, that the court is single-handedly against oil and
gas development. The court, like our Alaska Constitution,
is sort of a living process and it is their responsibility
to interpret the scene of the day, the thoughts of the day.
Basically what the court has said to the state of Alaska is,
"While you have done what the legislature has set out for
you to do, it is not enough." And they have placed a road
map for considering these types of things; additional means
of public input, et cetera, et cetera. So Mr. Eason, with
the assistance of the other body, has simply taken those
ideas, taken the court documents, taken the public
testimony, taken the first working group, and brought all
these interests together under a piece of legislation, in
order to address it. One other thought that you talked
about is, fishing and oil development having coexisted quite
well in Southcentral Alaska to include the Kodiak and the
Kenai area.
MR. FURNACE said there is no question as to where the
largest amount of revenues generated by industry comes from.
That indeed comes from oil and gas development. When you
look at the per capita income of individuals, the greatest
per capita income is paid by the oil and gas industry. If
you look at the longevity of the various industries, while
fishing has a seasonal content to it, oil and gas provide
year-round stable employment. The Daily News some time ago,
came out with an article that said that the state of Alaska
pays somewhere in the neighborhood of $100,000,000 annually
to the development of our fishing industry in the state of
Alaska, of which the industry pays back in the form of taxes
and other fees, or whatever, about $40,000,000. Its
conclusion [was] that over a ten year period of time, that
the state has subsidized fishing development to the tune of
$600,000.
Number 690
REPRESENTATIVE DAVIDSON said Mr. Furnace was talking about
the Greg Medreff article that had since been dismissed. It
is based on very bad numbers. Representative Davidson said
he would be happy to provide Mr. Furnace with an update, not
only from the Department of Fish and Game but other
organizations, to refute those very remarks.
Number 698
MR. FURNACE stated that the point was that, again when we
look at the giant scheme of financing services in government
of the state of Alaska, that is provided through oil and gas
development, and he did not think you could find anyone who
disputes the importance of fishing in Alaska, but the fact
is, the Golden Goose is oil and gas development. This bill
addresses that, and hopefully, with your strong support, we
will maintain that.
Number 705
REPRESENTATIVE GREEN said that for 30 years, there have been
platforms in Cook Inlet, and for 30 years, we have been
catching a lot of salmon. While our fish happen to be
migratory, this is not uncommon, that where platforms exist,
fishing is superb because the platforms act as an artificial
reef and protect small fish, so the concerns expressed that
fishing will go down the tubes because of possible oil
development, is just not well founded.
Number 715
LINDA FREED, Community Development Director for Kodiak
Island Borough, testified via teleconference. She also
offered her testimony as Acting Mayor of Kodiak Island
Borough. The Kodiak Island Borough has only recently taken
a formal position on SB 308.
MS. FREED read a copy of a letter she wrote to Senator Drue
Pearce dated April 15.
MS. FREED said that she noted in that letter that the Kodiak
Island Borough appreciated Senator Pearce's efforts on the
Senate side to improve SB 308. They also appreciate the
efforts of David Rogers, Jim Eason, and other legislative
and administrative officials as we have worked to create
acceptable language for this bill. Mr. Eason in a testimony
has noted there have been substantial changes to this bill
since it was introduced. The Kodiak Island Borough agrees
with that position, and for the most part we agree that
these changes have been very positive. Kodiak Island
Borough originally objected to including the phasing and the
concept of this bill. As it became evident to us that the
Senate intended to include phasing language in this bill, we
worked hard to make that language acceptable. Any concerns
regarding the phasing issue, and Title 38 amendments
contained in SB 308 are briefly identified in a letter to
Senator Pearce. Ms. Freed expanded briefly on some of those
points. Her letter to Senator Pearce was provided to the
committee.
(Background noise makes testimony difficult to hear.)
MS. FREED stated: "It is important to note that the last
time I was involved in a wide-ranging discussion of these
issues, four attorneys along with a few others were also
present, and, for the record, I am not an attorney.... While
a handful of attorneys were present, they could not agree on
the meaning and the implications of specific words and
phrases contained in the bill. And if the intent in this
legislation is to limit litigation or to reduce litigation
in the scope of the state interests and (indiscernible),
until this language is clear, I don't believe we will
actually see that goal. This is a concern that we have
particularly raised.... That if a group of seemingly very
knowledgeable people who have spent a great deal of time
working on this bill can't agree on what the phrase, for
example, `may address only' means, how is the average
citizen who is trying to comment on a state's proposal
supposed to know what the phrase means? And more
importantly, what will a court of law say about the
interpretation of that phrase?" Ms. Freed discussed this
issue further, offering an additional example concerning the
meaning of `economic feasibility,' illustrating the
confusion she perceived to be inherent in the language of
the legislation. (Tape is damaged and further testimony at
this point is difficult to hear.)
Number 775
CHAIRMAN PORTER introduced Commissioner Paul Fuhs,
Department of Commerce and Economic Development.
Number 780
PAUL FUHS, Commissioner, Department of Commerce and Economic
Development, who has also sat on the Coastal Policy Council
for the last three years, a group that oversees coastal
consistency determinations on a statewide basis, testified
in support of SB 308. He has also worked extensively with
all of the groups during the writing, drafting and
redrafting of this legislation.
COMMISSIONER FUHS stated, "I consider this one of the most
important economic development bills before the legislature.
The guts of this thing is a common sense way to look at
phasing. When you look at projects, some of them do come in
phases, and part of the problem that we've got is that --
You know, Representative Davidson raised the issue of the
courts. If you talk to the courts, they're saying, `This
language is so vague that this is the only way that we can
rule. You're not giving us any clear directions on this.
If we don't take into account every potential speculative
use, then we've got to throw the lease out.' That's what's
happening. And a lot of attention has been paid to oil and
gas, but not so much to the other resources. And that's
what I wanted to speak to a little bit. The (indiscernible)
project was raised, and I think that that's a good example,
because what's needed there, for a tideland lease is, you
need a dock, and you need the area where this steel refinery
is going to go in, and you really don't need anything else.
Well, you could speculate that sometime down the road, well,
maybe you'd build a railroad into there, or maybe some day
coal would go across it, or maybe logs, or you've had other
types of development. Well, when that time comes, then you
apply for those permits. Now, this language is very clear
in here.... You can phase the project only if the uses to be
authorized are part of that discrete phase and that the
department's approval is required before the next phase of
the project may proceed. So you've got to come back for
those permits, and there is full opportunity for the public
to comment at that time. In fact, this is a very much
expanded opportunity for the public to comment, and those
issues came out of Lease Sale 78, and this language came
primarily out of Senator Little's bill, who had to expand
the notification period. And also, with some other people,
comments in the Senate, the time for appeal...has been
expanded in the bill, so I think the public's right is
protected in this...." Commissioner Fuhs expanded on these
points and provided examples from the oil and the seafood
industries in support of his position.
Addressing the question of an absence of standards for other
resources, COMMISSIONER FUHS said we know enough about oil
and gas that you can lay out those standards. We looked a
little bit at this, and we know that those other resources
have a broad range of potential uses, and there is no way
you can come down and lay down every single standard for
every other resource. It would just be impossible to do
that. The other thing, as far as giving more discretion to
the director, and any concerns that another administration
would have that would be less pro development; that is not a
very realistic concern, yet if they do not want to do it, if
you had an anti-development governor or administration, they
just would not put the leases out. They have ultimate
control. It is a false argument to say that this bill could
give a future administration more control over development.
(end of tape.)
TAPE 94-64, SIDE A
Number 000
COMMISSIONER FUHS' testimony continued with a discussion of
speculation about foreseeable or not foreseeable results.
He reiterated that he believed the public would have
sufficient participation and that he believed that this was
a good bill; as far as improving it, you can always improve
things, but this bill is a good balance of protection of the
rights of the public to participate and for economic
development for Alaska. If you went into the phasing issue,
you would destroy the whole reason this bill is necessary.
We have done our very best to work with fishing groups,
making substantial changes at their request.
Number 044
REPRESENTATIVE NORDLUND understood that the Coastal Policy
Council did not endorse this bill, that they in fact had
wished that they had been the entity to bring the bill
forward and to work through all the problems.
Representative Nordlund referred to a letter from coastal
districts addressing perceived problems in the bill and
noted that he felt the districts did not feel adequately
consulted on the issues.
Number 051
COMMISSIONER FUHS said that the issue was raised for quite a
while in front of the Coastal Policy Council, and he did
make a full report to them at the last meeting, and they did
not say they did not endorse it, but they did not endorse it
either. They just did not take a position on it. At that
time the council was asked if there were any additional
issues they wanted brought up. Some were raised and dealt
with. There is not a piece of legislation anywhere that is
going to please everybody. This bill provides a good
balance.
Number 100
BRAD PENN, Alaska Oil and Gas Association (AOGA) via
teleconference in Anchorage, said AOGA supports a full
analysis of all issues and concerns for the best interest
finding process for each lease sale. The association feels
that the current statutes were designed to do just that.
However, AOGA is concerned by the uncertainty that has been
created by recent rulings of the courts interpreting the
current law. AOGA supports certainty in the process, so
that DNR's scope of review can be defined during the
administrative review process, and not by the courts. The
only question is how to define the scope of review.
MR. PENN said that AOGA believes that the scope of review
for the best interest findings for oil and gas lease sales
should cover three items: (1) The director should determine
those issues to be addressed; (2) public comments should be
considered in determining what the scope of the review
should be; and (3) the legislature has determined that those
items listed in AS 38.05.035(g) should be part of the scope
of review. If the director, the public and the legislature
do not consider an issue to be of sufficient concern, then
the courts should not be allowed to decide if it should have
been covered in the best interest finding or consistency
determination. AOGA believes that the intent of this bill
is directed at providing certainty in the scope of review.
AOGA supports SB 308.
Number 142
REPRESENTATIVE JAMES, addressing Mr. Eason, said she would
like to confirm with him her interpretation of some
experiences with the court in some of these lease sales.
She requested an outline of the things which needed to be
considered in determining best interest findings of the
state. Representative James said she believes our courts
make these findings because our laws are insufficient to
define what exactly is meant by best findings in the
interest of the state.
Number 188
MR. EASON said that was precisely his view.
Number 195
REPRESENTATIVE JAMES asked what is "material" in the
phasing. If someone from the public, say during the first
phase of this lease sale proposal, came up with a concern
they thought was material and the department did not figure
it was material, and then the department would be required
to respond to that person in writing, because they had a
concern, would it be possible, and if the department then
determined that their concern was not material, at this
phase, would that person then have the right to go to court
and say they thought it was material and that they were
responded to incorrectly?
Number 198
MR. EASON said that was precisely the recourse they would
have. They would first have to exhaust the administrative
remedies by appealing the director's decision. If they did
not like the result, then they would have to appeal to the
commissioner, and failing happiness there, they would have
to pursue that issue in court.
Number 232
REPRESENTATIVE JAMES said that the public's opinions have
not been aced out in this procedure.
Number 250
MR. EASON responded by saying that from his perspective one
of the most unfortunate parts of the debate about the bill
and what the bill is intended to do is that (a perception
existed that) the bill was intended to foreclose
opportunities; he honestly believed that from the beginning
the intent of the bill had been that it be better, and much
more refined in the public interest, and that whatever
comments are received, are addressed and he hoped the
language of the bill reflected this.
MR. EASON commented, the standards will be standards the
court will apply and use in defense of an appellant's right,
if they are misused by a director. But if it sits in
statute, then all of those issues and concerns will be
addressed, and they will be addressed in writing; and any
decision that a fact or issue is not material will be
explained as to why it is not material.
MR. EASON said if it is material to a later phase or a later
permitting decision, that will also be rationalized in the
best interest finding decision. There is a more complete
dialogue, rather than having the public say something, and
then having a giant echo, and no response. This will
require that those comments be addressed, and in my view, it
contains a continuing dialogue which is important to, I
hope, increase public confidence in the programs that this
legislation will cover, but also to establish a more
complete record for the courts, that have to review lawsuits
that may arise under this bill.
Number 266
REPRESENTATIVE JAMES expressed one more concern. She has
had some experience in local planning authorities, where it
is stated that in order to be able to appeal in court, you
have to have been a participant at some earlier stage in
this planning process. There was some concern, also, that
someone asked, "How do you get standing to appeal in court?"
If a person from the public had a concern and the concern
was determined by the department to have not been material,
and they could have this administrative appeal, and if it
was not material, that still would not necessarily preclude
them from being a party in a subsequent suit, because they
had been a participant earlier on in the process. Would
that be a correct assumption?
Number 280
MR. EASON said that assumption would be correct if you were
talking about an appeal later on that issue. They would be
foreclosed from raising new issues they had not raised
during the administrative process sometime. It is a
balance. We are trying to provide more time and more
opportunity earlier for the public to understand what we are
trying to do, and what we think is the right way to do it.
But we are also trying to strike the balance that by doing
that, we pull them out, we pull their comments out, and we
make them more concrete, so an agency can try to understand
them and address them. So it is a two way street, but
presuming that you have participated and you have made your
concerns known, under this bill you would be fully eligible
to take those concerns to the Superior Court, if the
department is unable to resolve them as you think they
should be resolved.
REPRESENTATIVE JAMES stated, "It would appear to me that
being given the ground rules in the beginning of this public
process, knowing full well that in order to be a participant
or to be able to be in appeal at some later time, that the
citizens in the public process, are going to thoroughly
examine any concern...that they may think that they might
have, so that in fact they will then protect their position
of being able to appeal at some later time - in which case,
the results of that would be, then, that more things are
brought up in the beginning than might be if they thought
there was some other chance to not have to do that. Is that
correct?"
MR. EASON: "I agree with you completely."
Number 283
REPRESENTATIVE DAVIDSON said Mr. Eason indicated they would
be precluded from bringing up a new issue. But if in fact,
the issue is new, because new information is brought up in a
later phase, why would they be denied an opportunity to
present that, even though at an earlier phase that
information should have been, but was not known to be
available.
Number 290
MR. EASON said they would not be precluded from appealing,
commenting on, participating in, or appealing a decision
related to the permitting of a subsequent phase. This would
in no way affect those rights.
Number 296
REPRESENTATIVE DAVIDSON said he was talking about a part of
the phase where a new piece of information came up. For
example, let us say there was a very rich archeological site
that came up at the very late stage, say, of production, say
one or two phases past the time that we should have known
that it was there. We are precluded then from going back to
that other phase with this new archeological find? Say, of
world class significance? And it's just too bad because we
should have known back then, but did not?
Number 313
MR. EASON commended Representative Davidson for his
hypothetical, saying it is a very difficult one to answer.
The difficulty with that hypothetical, though, is that there
would be two questions the court would ask if confronted
with this bill and that set of facts. The first one would
be, "Did somebody really know about this archeological site?
Were they the only people to know about it, and yet they
were quiet, with the hopes that nobody else would mention
it? And then, after the process had run, they would use
that to stop the sale?" In those circumstances, the court
is likely to appropriately say, "That is unfair." But if
it is the opposite, and in fact, the administrative process
has run, but there is something that happens of
extraordinary significance, then, Mr. Eason asserted, "I
believe personally, and I am not an attorney, but I believe,
at least with my experience in losing many cases with the
court, I think the court would probably be pretty receptive
to taking that information before it, regardless of what you
said or what I said."
Number 330
REPRESENTATIVE DAVIDSON asked Mr. Eason why he is losing so
many cases before the courts.
Number 332
MR. EASON said he was glad to be asked that. The simple
answer is that he is not sure on all of them, but something
Representative Davidson said earlier did strike a chord that
he thought important for everyone to understand. On a
couple of these, it is truly a mystery. On others, it is
arguably not a mystery. Some of the things that have been
said by the courts point out a problem that is not a problem
of my making and it is not a problem of your making. It is
a problem that we really have to come to grips with though.
In thinking in specific terms of the Goodnews Bay decision,
that was a decision that went before the Coastal Policy
Council. It was determined by all the agencies to be
consistent with the Alaska Coastal Management Program. Its
best interest finding was conducted under Title 38
provisions, as the Director of Mining understood them to
exist. It really was a long protracted process that
appeared to have extraordinary public support, including the
Coastal Policy Council, but a local community obviously did
not agree with that decision. The Superior Court confirmed
the decision. The Supreme Court again ruled 5 - 0 that it
was wrong, and that you had to consider all the possible
impacts of mining that may happen in the region, not just
offshore, but in the region of Goodnews Bay. And then, the
court went on to say that it felt that it was appropriate
that the state conduct investigations like the NEPA or EIS
investigations of the federal government. The problem is
that we cannot do the job that we think you want us to do.
We are not funded to do that, because it is about
$1,000,000,000 that the federal government has spent doing
those analyses in Alaska; compared to whatever we have spent
over all the years that his division has existed. The
quality of the analysis is open to debate. Good, well-
intentioned people can argue about the validity and the
importance of the information derived from those studies.
But the fact remains that in every case, they really do not
reflect what actually happened after they were done;
especially the ones dealing with OCS leasing. This leads to
the question of what we would gain. Some folks have said we
gain better insurance; there is no litigation. We looked at
that. About 50 percent of the federal sales have been
challenged, and a considerable number of them more than we
have lost, have been successfully challenged under federal,
NEPA, or NEI standards. So, the court is telling us, they
want us to do that. We are telling you, that is what the
court says, and that is what they are going to hold us to
even though the law says something much less than that. The
options are, we can do nothing further, and we may not be
able to do anything further if you were to give us
$1,000,000,000. It is open to question.
Number 380
REPRESENTATIVE DAVIDSON said that brings us into federal
law, and asked if that brings us into compliance with
federal law -all sections of the bill?
Number 384
MR. EASON said there is no attempt, here, to bring us into
compliance with federal law under Title 38, the State's
disposal statutes. The legislature has not said we should
have a comparable process to federal law there, but, as we
said earlier, with Mary Lundquist's testimony, we believe
this brings us in compliance, we will be in compliance with
federal law in dealing with the Title 46 issues, which is
something required, since the state is a participant in that
program. The federal government does not have a say,
directly, over how we administer the best interest findings
under Title 38, because the legislature has chosen not to
require that.
REPRESENTATIVE DAVIDSON said we see from Ms. Freed's
testimony that locally impacted populations and areas are
not satisfied with the haste with which we are moving
forward on this bill. Secondly, they would lose their
ability to respond, and protect their own interest, vis-a-
vis the state coming down on them with these decisions.
Wouldn't federal law then seek to provide protection for
those local communities where state law refused to do so?
Number 411
MR. EASON answered that there are, depending upon the
circumstances, the project and various authorities, of
federal and state, and local agencies, a number of
safeguards that are designed to ensure that neither the
state, nor the federal government can run over each other or
run over the public. That is not the intent of government.
Sometimes people feel that is the process of government, and
unfortunately, that tension is always there.
MR. EASON said in the case of a decision on permitting in
the coastal zone for a development project, obviously, if it
is in the coastal zone, it is going to require a Corps of
Engineers permit and an Environmental Protection Agency
permit, as well as a consistency determination. He believes
that regardless of what amendments are made in respect to
this bill, to current state law, the existing protections
are not only there, but they are numerous, to assure that
the local public and the state and the federal agencies all
have a say in what happens.
Number 435
REPRESENTATIVE DAVIDSON said he would like to hear a little
bit more on the Goodnews Bay issue, because it helps put
some things into perspective. He asked if Mr. Oscar, whom
he understood to be a litigant in that case, could address
the issue from his perspective as to where that litigation
went as a result of lack of state law.
Number 440
CHAIRMAN PORTER replied, "To show you that there are very,
very few absolutes, I will accede to that request for that
one additional person to testify, and I will also accede to
a request that we've had from Senator Little to address us
as relates to her involvement in this as was mentioned by a
previous witness. And, after that is concluded, you win, we
will continue until 2:00 tomorrow for the purpose of - no
more testimony, but - considering your amendments, I will
ask the agency people, if they can, to be here at 2:00
tomorrow to help us with the amendment proposals and
hopefully at the conclusion of that, we can address the
bill."
Number 455
REPRESENTATIVE DAVIDSON: "Mr. Chairman, I don't win
anything, but your able stewardship of the public process
wins. Thank you."
Number 460
REPRESENTATIVE NORDLUND asked if Chairman Porter would
consider sending this bill to a subcommittee. That is not
to delay the bill, but there are a series of amendments that
could be better addressed in a subcommittee format where we
can have people from the department here as well as folks on
the other side of the issue, and maybe we can hammer through
and come to an agreement on a lot of those amendments. We
would not have to take up the committee's time; we could
bring it back as soon as possible.
Number 470
CHAIRMAN PORTER felt there was a degree of urgency because
of the lateness in the session, and that, with the other
committees being shut down, the time was available for the
committee to review the bill, so that in the normal
judiciary fashion the committee should be able to work on
the amendments with whomever they needed to work.
Number 476
REPRESENTATIVE NORDLUND requested that, with that mind,
would it be okay while going through the amendments to have
the people at the table, from pro and con, to help the
committee understand.
CHAIRMAN PORTER reserved the right to limit discussion if it
seemed to be getting repetitive, but other than that, that
would be fine.
Number 484
SENATOR SUZANNE LITTLE noted that she had a concern, as it
had been said that part of her bill was placed in this bill,
and she acknowledged that to be true. She said that it was,
however, only a small part of her bill, and basically, the
portions of her bill that were placed in this bill were
pretty much codifying existing policy and existing
operations in the Department of Natural Resources, as far as
noticing those.
SENATOR LITTLE'S bill was not a response to the Ombudsman's
report regarding Lease Sale 78. Many, many complaints from
her district came to the Ombudsman regarding that lease
sale, and that report was in response to those complaints.
The Ombudsman's report said the public notice portion of
current regulations just are not fair, and so Senator Little
wrote a bill taking just a few of the Ombudsman's
recommendations, and those few recommendations in her bill
had been pared down to basically what is in existing policy
today, with the exception that additional advertisement was
being added to the public notice. Senator Little had
included seven consecutive days of public notice publication
in her bill, and this bill allows for one day notification
separated by a week; in other words, one notification for
two weeks.
SENATOR LITTLE commented on the characterization in the
Senate, that everyone who was interested in this bill was
able to participate with the working group that was a part
of drafting some recommended changes for the bill. Senator
Little wanted to let the committee know that she was a very
interested person in this bill and she was not invited to
participate. Also, it had been characterized that fishing
interests had participated to a great extent in some of the
changes made in the bill, and to Senator Little's knowledge,
that was not factual. She stated that it is misleading to
say that including portions of her bill makes it okay for
the public's ability to know and comment, since other parts
of SB 308 are so negative in that respect.
SENATOR LITTLE said she still had two remaining concerns
with the bill which were a great debate on the Senate floor.
The first concern was phasing. She was very concerned that
it is not consistent with the Federal Coastal Management
Program. The Federal Coastal Management Program basically
says that if you know information, at any phase, you will
consider it. This bill, Senator Little stated, says you
will look through this knot-hole, looking at the specific
discrete phase, and consider only information pertaining to
that discrete phase and not the other available information.
Senator Little was concerned by this and had requested an
opinion about whether or not the legislation would be
consistent with the federal program.
SENATOR LITTLE's other remaining concern was that there was
no list of issues that the department has to consider for
non-oil and gas development. The "G" list that had been
referred to, she said, has been a good list of things to be
considered for oil and gas development, but a lot of coastal
communities are concerned that such a similar list should be
created for non-oil and gas development.
SENATOR LITTLE concluded, "If our intent is to get the drill
bit in the ground more quickly, I don't think the bill gets
us there." She believed the bill would bring a lot more
litigation, a lot more court time, a lot more expense, and
might even put the state in the position of buying back
leases in the second, third, fourth phase of the project.
Senator Little reiterated that she had strong concerns about
the bill, and trusted the remaining problems could be
resolved.
Number 567
REPRESENTATIVE PHILLIPS said she thought Senator Little had
brought up a good point, and asked for a very specific
statement from the Department of Law or DNR on "...whether
or not our legislation must come into compliance with
federal legislation; whether or not we are in contention, et
cetera, et cetera." She wished for a specific statement on
whether or not the legislation needed to be in compliance
and whether or not there was a mandate to be in compliance.
She requested that these questions be answered when the
hearing was continued on the following day.
Number 577
JOHN J. OSCAR, President, Native Village of Tununak,
testified on behalf of the Native Village of Tununak. Mr.
Oscar presented critical analysis and recommendations
concerning SB 308. He noted that he had travelled a little
over 1,088 miles to see to it that his village was properly
represented. Mr. Oscar said he was also the co-chair for
his coastal management district, for which he had been the
coordinator. Mr. Oscar provided a written statement for
committee members' review.
MR. OSCAR began with a rebuttal of Mr. Eason's assertion
that there was a lot of support for the bill "out there."
Mr. Oscar said that was not true; 56 villages did not
support the Goodnews Bay offshore prospecting permits as
prepared. He said that AVCP (Alaska Village Council
Presidents) has passed a resolution to oppose the bill and
was an appellant in that case. Mr. Oscar said that villages
had introduced habitat legislation three times, but did not
succeed, he believed, because of the strength of the ability
of the Department of Natural Resources to oppose any bill
which caused it concern.
MR. OSCAR noted that statehood had come into being without
the input of his people. He believed that the same thing
was occurring in this case. He stated, "We had presented to
the Department of Natural Resources about our concerns of
local knowledge, and the way it was prepared. We had
presented to them charts. It was clearly shown to the
Coastal Policy Council where the migration routes were of
sperm whales, where the haul-outs were for the walrus, and
sea lions; where the herring stay before they come up to my
island, in the Goodnews Bay Area, where the king salmon stay
just before they go up to the Yukon, and the Kuskokwim
Rivers...and where the smelt were, where the (indiscernible)
were, where the eel grass beds were, where the herring lay
their eggs.... But those were denied because they said,
`Speculative. Unscientifically based. Only of belief.'
"Is that the condition that we are going to be put under
with this process? The director's unlimited power to ignore
science and long-developed experience and traditional
knowledge as `speculative' and `immaterial' gives us some
grave concerns." Mr. Oscar asserted that the Department of
Natural Resources would dismiss such knowledge as
speculative, unscientifically based and only a belief no
matter how long observations had been made. "These terms,"
he said, "have been given the determining factor to control
and manage our resources, giving the agencies ultimate say
however unfit the decision may be."
MR. OSCAR said this was why he was so concerned when MR.
EASON pointed out that Goodnews Bay had a lot of support.
Mr. Oscar observed that the courts had said that the
Department of Natural Resources had done a poor job of doing
its homework in the beginning; if they had not done a poor
job of doing their homework, the matter would not have
reached the courts. Mr. Oscar said, "In fact, all the
tracts that were being proposed were not opposed by these
people. They were opposed by these migration routes where
the staging areas were; what would occur when the cumulative
impacts occurred, from the very beginning. DNR refused to
understand that and assess the situation."
MR. OSCAR foresaw a situation, where, at the "director's
discretion," should phasing be developed, the state would
assess only one phase and "may address only reasonably
foreseeable significant effects...," thus avoiding arguments
addressing impacts by the first phase of development. He
stated, "Depletion of fish and wildlife resources and their
habitat from cumulative effects caused by the first phase
give the director unfair judgment and discretion to reject
any argument and determine new resource information
immaterial and nonexistent. Moreover, it accelerates and
binds the process to continue with development, despite
imbalances, by rendering phasing."
MR. OSCAR continued, "We're quite concerned, and question
the validity of not requiring written findings before a
project is approved. Does this mean once a project is
approved the director may write (written findings) after the
decision is made? It says here, on page six, line seven,
that he is not required to write one before the approval."
Mr. Oscar was concerned that an across-the-board approach
could be taken concerning sales contracts, leases, permits,
mineral claims or licenses and characterized it as
inappropriate.
MR. OSCAR cautioned, "The director can `limit the scope of
an administrative review and finding...that pertain solely
to the discrete phase of a project' by using only what is
material only to his point of view and with broad
authority." He said that the amended language under Section
2 would limit, if not eliminate, public participation.
Again, Mr. Oscar, warned, "The director may only address
what he sees fits his agenda." He noted that phasing by the
federal government guarantees the method of assessing all
costs and effects of a proposed project by incorporating
public knowledge, known facts and findings provided to them
at the beginning.
"This bill causes us some grave concerns, because many times
my people have been left behind, even in the revenues of the
state." Mr. Oscar reiterated that his people were not
consulted when statehood came into being. He challenged the
constitutionality of the bill given the lack of public
knowledge concerning the complex legislation. Mr. Oscar
said that the people, the public, would be at a
disadvantage, would have no voice, vs. the advantage the
agencies and the agencies' lawyers and the agencies'
researchers would hold. "We will be displaced, and it is
very sad; the repeat of the state's ability to dominate our
people is not fair. And we are trusting the state of Alaska
to remind itself of its Constitution, that it should not
forget all the people that are concerned about an issue.
This process here is a radical change from present law under
the administrative process. The original intent of the
Coastal Management Program was to give the little guy a
voice. This bill takes that away. As written, the bill
restricts standing to appeal." Mr. Oscar went on to
delineate the ways in which public participation was
limited.
MR. OSCAR challenged the time provided for in the bill as
being inadequate for interested parties to assess the
director's findings and provide information, especially in a
rural setting, with only 20 days after the finding is
issued. He provided recommendations to address this
problem.
In conclusion, MR. OSCAR characterized the legislation as a
quick fix proposed by the DNR for the mistakes that it had
created. He predicted that it would increase litigation.
"We support well thought out, thoroughly planned
development. Let us not repeat mistakes by the 18th
century's lack of respect for the land, fish and wildlife
resources, and the blindsighted approach to haphazard
development. We do not wish to see the creation of a
bulldozing bureaucratic monster for lack of equitable
language. We recommend that a working group be developed to
come to a more appropriate consensus on these bills...."
Mr. Oscar noted that meetings had taken place between DNR
and some coastal districts which were not given enough
opportunity to settle differences. He recommended a
working group to develop policy similar to the process used
in developing SB 238. Finally, Mr. Oscar reiterated the
hope of the people he was representing, many of whom could
not afford the cost of coming in person to testify, that the
state "...listen to the little voice..." so often dominated
by the large agencies which are able to "...tailor language
which favors their interests. What about the little guy?
Please don't forget him. Thank you."
CHAIRMAN PORTER expressed that by his observation, the
Village of Tununak was well represented.
Number 771
COMMISSIONER FUHS offered clarification on the seafood
processing companies, and wanted to make it clear those were
some individual companies he had talked to, and the ESPA,
nor any other processors' organization has taken a position
on this bill. Somebody had a question about what he was
saying, so he wanted to clarify it.
Number 776
CHAIRMAN PORTER recessed the meeting until 2 o'clock the
following day and said he would request agency
representatives to be present to answer questions on the 10-
15 amendments to be discussed.
THE HOUSE JUDICIARY COMMITTEE RECESSED AT 6:10 p.m.
TAPE 94-65 SIDE A
Number 000
The House Judiciary Standing Committee was called back to
order at 4:15 p.m. on April 28, 1994. A quorum was present.
CHAIRMAN PORTER stated the Committee would continue to hear
CS for SB 308(FIN)am. He announced the witnesses who would
be available for questions.
Number 062
REPRESENTATIVE DAVIDSON referred to a letter which had been
passed out to the committee from the Department of Law which
talks about the intent of the bill which is that the state
still be in compliance. Representative Davidson asked, what
is the process that must be waited on to ensure the
maintenance of federal certification; and that we will not,
during the interim, or other times, lose any federal grants
or anything that would be affected by the bill before us.
Number 084
MS.LUNDQUIST explained that any changes that were made to
the coastal plan, the state plan would have to consent to
OCRM, and they would have to approve of the amendments and
support them for the plan to be federally certified.
Number 092
REPRESENTATIVE DAVIDSON asked if that meant when we pass
this law, we will not know until we receive word from the
feds that they passed the federal muster.
MS. LUNDQUIST told Representative Davidson that was correct.
Generally, it would not be prudent to (indiscernible)
legislation that is still in the formative process. OCRM
would have to have a certain amount of time to act in order
to determine whether they considered it consistent with the
federal plan. If it was not considered to be consistent,
there would be two results. One would be the state would
not have the ability to oversee federal projects, and the
other is that the state would be in danger of losing federal
grants.
Number 118
REPRESENTATIVE DAVIDSON said in view of a long list of
people and organizations in local governmental agencies who
still have concerns or outright opposition to this bill, he
would like to move a conceptual amendment that would delete
everything except the oil and gas applications, and thereby
save ourselves a lot of grief and ensure that other parts of
this bill, perhaps in a work group setting, we could work
out with these other groups as other work groups have worked
out in the past. Mr. Eason's shop is working hard to make
sure we expedite lease sales, but at the same time, we could
save ourselves a lot of wrong headed policy if we made this
bill apply to oil and gas, and standards already exist in
statute for such transactions.
REPRESENTATIVE DAVIDSON moved the Conceptual Amendment.
Number 156
REPRESENTATIVE PHILLIPS objected.
Number 160
CHAIRMAN PORTER asked Representative Davidson to consider
rescinding his motion for the moment. Chairman Porter
requested this for a technical reason, saying, "We have
amendments #1-23, and I don't want to renumber them all.
Could you do that at the end, rather than at the beginning?
And during that period of time, then, I have a letter here
from the Department of Natural Resources that commits them
to working on the regulations during the next year for the
G-list type criterion for the other resources."
Number 167
REPRESENTATIVE DAVIDSON stated he would certainly like to be
cooperative, but with this letter of commitment, there is
not a single name on it that we know will be here come next
January. In the past, commitments from departments to
perform in a way that we think they should because we have
made policy decisions -- the amendment cannot be withdrawn
just because of this letter of commitment.
CHAIRMAN PORTER clarified his request, saying he was not
asking Representative Davidson to withdraw his amendment
permanently, but just until the end of the testimony, and
then it could be brought up again.
Number 190
REPRESENTATIVE DAVIDSON stated that his hope in this
conceptual amendment was to save the committee from having
to go through a lot of these different amendments. He then
withdrew the amendment.
Number 197
REPRESENTATIVE NORDLUND said he was going to speak to the
fact that if the amendment had been offered, it might have
alleviated the committee needing to go through a lot of the
other amendments; it would make a lot of the amendments
moot. We would have to have the bill redrafted, and take
another look at it, because it would be so sweeping as to
change the bill, but if you want to do it that way, that is
fine; it just sort of makes more sense to do a bigger
approach first, and then if we do not achieve that, then to
go through the smaller amendments.
REPRESENTATIVE DAVIDSON asked if this means the amendment
was probably dead before we consider the advantages of such
an amendment?
CHAIRMAN PORTER said he had no idea, and that what he told
Representative Davidson is exactly what he meant - that he
did not want to try and renumber 23 amendments.
REPRESENTATIVE DAVIDSON offered to do this himself.
Number 318
REPRESENTATIVE NORDLUND said Representative Davidson and
himself would be alternating offering the amendments, and
they would not necessarily be in the order that we have them
in the stack.
CHAIRMAN PORTER said they could be referred to by the
numbers in the corners.
REPRESENTATIVE DAVIDSON offered Amendment #9.
CHAIRMAN PORTER clarified that it referred to page four,
lines 3-8.
REPRESENTATIVE DAVIDSON explained Amendment #9. One of the
problems with the bill is that it gives entirely too much
discretion to one or two individuals, and in the words the
"Director finds are material to..."; this makes it too easy
for an individual to pass easy up or down judgment on that
material, so by deleting that first part, it resolves that
problem, having the effect of spreading the power out to
more than just a director. The other one is on page four,
lines 22-31.
REPRESENTATIVE DAVIDSON asked, "Is there a pressing issue or
project, Mr. Chairman, that you know about, that wants for
us to rush this legislation through right now?"
REPRESENTATIVE PHILLIPS interjected that the amendment was
not before the committee.
REPRESENTATIVE DAVIDSON said he thought they were passed
out.
CHAIRMAN PORTER asked Representative Davidson to move the
amendment.
REPRESENTATIVE DAVIDSON moved Amendment #9.
Number 345
REPRESENTATIVE PHILLIPS objected.
Number 351
REPRESENTATIVE DAVIDSON reiterated that if we want to give
that kind of power to one or two people within the
bureaucracy, over the many different groups of people at the
level of local government, he does not believe our local
constituents will find that to be good public policy.
REPRESENTATIVE NORDLUND agreed that the bill gives too much
discretion to the Director of the Division of Oil and Gas to
determine what is material, what facts need to be determined
in order to decide whether or not to go ahead with a lease
sale or exploration or certain development. Representative
Nordlund referred to existing sideboards in law regarding
oil and gas sales and noted that the legislation does not
provide for those kinds of considerations for the other
kinds of land disposals. He requested the issue be
addressed by Mr. Van Tuyn and Mr. Eason.
CHAIRMAN PORTER agreed that Mr. Van Tuyn and Mr. Eason might
be called upon to provide succinct reflections on the
amendments but requested that the discussion not become a
"meritorious, redundant debate."
Number 357
REPRESENTATIVE JAMES asked if she could ask a brief question
of Representative Davidson, since she had another meeting to
attend. "You're saying that you find too much power in the
director to indicate what is material in the determination.
Who did you want to make that decision?"
Number 365
REPRESENTATIVE DAVIDSON explained that more clarification
and input was needed from the local experts, having more
persuasion on that director.
REPRESENTATIVE JAMES observed, "Somebody has to make that
decision. I don't know who you're suggesting would do it."
MR. VAN TUYN responded that to the extent that anyone needs
to make that call, the discretion would still remain with
DNR, and still remain solidly with DNR. Currently, the
sideboards on that are the current statutes, which require
that you look all the way to the end of the project. The
standard of review of the thing is that all important
factors be considered. That is the legal standard, and if a
factor is an important factor, it must be considered by the
director. `Important' is an objective standard. You take a
look at the community around you. You take a look at the
Porcupine caribou herd and see what uses it is used for.
You determine if that is important. Then you see whether
the director has applied it. What SB 308 does is allow the
director to define what is important, so you're taking the
objective standard away and inserting a subjective feeling
of one, of the current, administration."
Number 380
REPRESENTATIVE DAVIDSON referred to a conversation he had
had earlier in the day with Mr. John Oscar of the Native
Village of Tununak, who had appeared before the committee on
the previous day. Representative Davidson expressed that
investing this much authority in one or two individuals was
premature when standards were just now being established in
non-oil and gas areas. He stated, "I think that given the
fact that the local people are the ones who have to live
with the materials left to the discretion of one person
without the knowledge heretofore; of course, we have a
commitment, but what does that say? I think that it is
important that we allow for a little more input from the
local level, to ensure this to happen before that final
discretion by the..."
REPRESENTATIVE JAMES left for her other meeting, saying she
would return in half an hour.
Number 400
MR. VAN TUYN commented that in all cases except for oil and
gas, there are no sideboards, and the intent of Amendment #9
is to take away that sole discretion of the director with
respect to the best interest finding to be the only one who
can determine what the appropriate sideboard is.
Number 412
MR. EASON: "To the contrary. What the important factors
are, are not objective. That is the problem. People's
views of importance are very subjective, and every one of
these cases is based upon different views of important or
salient factors. The phrases that Peter used were very
important, to all the important factors to the end of the
project. That is precisely why we are here. Because the
court has told us that they believe we must know what all
those events are before we can properly condition them.
Your choice with this amendment is a very simple one. You
take the status quo and make it much worse. You assure that
there will be no development of any sort in the state of
Alaska, and it's a clear-cut, very simple amendment that
would accomplish that."
Number 425
REPRESENTATIVE DAVIDSON asked for clarification on Mr.
Eason's last comment.
Number 430
MR. EASON said the question is, to whom the discretion goes,
and how much discretion there is; the legislature has
already seen fit to delegate that extraordinary discretion
to the commissioner, who has delegated it through a series
of departmental delegations to directors. But obviously, it
is not unfettered discretion. We view this bill as a good
faith attempt to define more precisely, what that discretion
is, and how the public interacts with it. But ultimately,
as Representative James said, it is very important that we
recognize somebody has to exercise the discretion. It is
yours, under the Constitution, but you saw fit to delegate
it to the commissioner. You can take it back, and conduct
sales and disposals every year, or you could give it to one
of the local districts, or you could spread it, presumably,
if it is constitutionally permissible. We have a situation
now, where the discretion you have delegated is not being
recognized in any fashion, and I do not think it is an
improvement to disperse that discretion, or make it appear
to the courts they have been corrected, that they can
substitute their judgment. But to make it even more
complex, by suggesting that fishermen can also make those
decisions, or someone else, somewhere else in the state can
-- Someone, ultimately has to make the decisions, or they
simply won't get done in any sort of predictable and public
process.
Number 455
REPRESENTATIVE DAVIDSON asked how the individual with the
discretion would determine what is "material" without
statutory standards that have discussed maximum benefits for
all people, not just people who want to do a project.
Number 460
MR. EASON said that would be the entire intent of the
findings under the statute, that the rationalization of the
thought process a director goes through, including his
determinations of non-materiality, has to be defined in
writing. It has to be a living document that the public
will be able to read and understand, and have the ability to
challenge on its merits. And the court is very comfortable
with the term "material"; it will make a decision, if there
is a challenge as to whether or not the discretion has been
exercised properly in those determinations.
Number 470
CHAIRMAN PORTER interjected, recognizing within the
commitment in this letter there is no guarantee the
commissioner will be there, and for that matter there is no
guarantee we will be here. There are no guarantees in this
world at all, but assuming Commissioner Noah, or yourself,
or someone else recognizes this is a commitment and pursues
this; the process of developing the sideboards for G-list
considerations for the resources, is a public process. Is
it not under the Administrative Procedures Act?
MR. EASON responded that that was correct.
CHAIRMAN PORTER: "And has a multitude of opportunity for
public input and discussion?"
MR. EASON concurred.
CHAIRMAN PORTER asked if there were any other questions;
there being none, a roll call vote was taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James -
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #9 failed 4 - 2.
Number 500
REPRESENTATIVE NORDLUND offered and moved Amendment #1.
There was objection.
Number 515
REPRESENTATIVE NORDLUND explained Amendment #1 was in the
finding section of the bill. It is Finding #5. It states
that in delegating this discretion, what this would be to
the department, is an intent of the legislature to limit
public comment or public opportunity to meaningfully
participate in administrative review. Hopefully, this is a
matter of clarification, that whatever participation there
is, it is not just participation for the sake of showing up
in a room at a time when maybe the person is not able to
consider a relevant issue, but the participation is
meaningful. There are other sections in the bill relating
to meaningful participation - in the appeal process, for
instance, where a person is allowed to appeal a decision,
that they had meaningfully participated in considerations of
the issues previous to that, it's only fair that we also
make sure that it's reflected as meaningful participation
here in the finding section also.
REPRESENTATIVE DAVIDSON said to ask for consistency of
meaningful participation, or the kind of participation is
not asking for too much in determining how we want the
participation to be.
Number 530
REPRESENTATIVE KOTT had a problem with using the word
"meaningfully". It is a very slippery word, and offers
potential for an appeal to take place. If this issue was
ever brought before the court, the court would probably
imply this word anyway. He did not feel it was a necessary
word.
Number 539
REPRESENTATIVE NORDLUND asked Representative Kott if he
would be in favor of deleting the word "meaningfully" on
page nine, line 15, just to make it consistent. This is the
section that deals with appeal and the eligibility of the
person who is appealing, whether or not they participated in
the process. Let us say in the earlier time they
participated in the process, they showed up in the hearing
and signed the witness register, and walked out of the room,
and did not even listen. I guess you could say they
participated, but that is not meaningful participation. It
is difficult to define the term, but since it is in the bill
originally, it kind of begs the question, "What is
meaningful participation?"
Number 552
MS. LUNDQUIST addressed that question. She said
"meaningfully participated" is defined in the bill itself,
on page nine, lines 15-20. To "meaningfully participate" is
to submit written comment during the period when written
comment is being received, or present oral testimony at a
public hearing, and this is a test that has been adopted
from Alaska case law, with regard to standing, to appeal.
Number 562
CHAIRMAN PORTER confirmed this is as opposed to interjecting
a term that could be interpreted different ways in the
findings.
Number 566
MR. VAN TUYN commented that even with the language on page
nine, defining what is meaningful, and so forth, there is
really not a lot of opportunity here for meaningful
participation in the process, and therefore, the thought of
putting it in the legislative findings would merely
reiterate that the legislature finds meaningful
participation to be a goal that is worthy of the statute.
Leaving it out here, and yet leaving it in the standing
section, literally; and who can go forward with the bill, we
are creating almost a double standard where the legislature
is saying, it is not real important that we be the guardian
of your meaningful participation, that we give you the
process. You have to figure that out, you have to push your
way through it, and then you can appeal. That is the intent
behind it.
Number 580
CHAIRMAN PORTER said he viewed construction of statutes as a
way to clarify, not to muddle; so as to allow courts to make
specific interpretations as opposed to speculative
interpretations. "Meaningfully" is one of those terms, sans
the definition on page nine for how it is used there, that
is a litigation causer, not a litigation solver, so he would
not support the amendment.
There being no further discussion, a roll call vote was
taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James -
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #1 failed 4 - 2.
Number 600
REPRESENTATIVE DAVIDSON moved Amendment #10.
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE DAVIDSON said this amendment would accomplish
(indiscernible) of phasing. He addressed Mr. Eason,
asking, "When you are determining the benefits - for
simplification, let's say the monetary benefits - of a
project, is that not a lot easier than trying to determine
what costs that same development might accrue in terms of
later competition for a resource area? How do you balance
out the easy to assess monetary value benefits vs. the cost
of degradation to the environment, or the taking of a
resource from another person, say, oil vs. fish? How, as a
man with this great discretion now, do you determine what
the costs of a project are?"
Number 620
MR. EASON responded, "I think that the premise underlying
your question is wrong. In my mind, the determination of
the benefits is no easier or no more precise than the
determination of the cost. I think that in the case of the
disposals that I am responsible for, they are both highly
uncertain. As a point of evidence of that, we have had
lease sales in which there were no leases bid upon, so there
was nothing. There was some cost, there was the
administrative cost, and there were, in the case of this
particular sale, there was a litigation filed over it, which
subsequently was dismissed, so those are costs which were
hard to quantify or anticipate beforehand. There obviously
were no benefits because I don't think the public was well
served by the litigation, and in fact, the litigants had to
pay money to dismiss the case. So, I believe that they are
both equally uncertain, and that is really at the heart of
one of the major dilemmas that we are trying to address with
this legislation, because some litigants are asking that we
treat the determination of a decision to dispose as if it
were a tabulation of cost and credits and debits and, on top
of that, supposedly understandable tablet, you extrapolate
to the end of the project. My life would be so much
simpler, and so would yours, if that were a fact. But it
simply isn't. Every disposal is unique. In my case, I try
to approach the decision making by looking at the record and
reflecting the thought process in my response to the written
and public record. But there are none that can be reduced
to simple columns and rows."
Number 644
REPRESENTATIVE NORDLUND asked Mr. Eason to comment on an
assertion made in the previous day's testimony that under
the provisions of the bill he would be able to look at the
long-term benefits of a project, but would not be required
to look at the long-term costs.
Number 649
MR. EASON responded, "I have heard that several times, but I
don't see anything in the bill that suggests that we would
be able to look at the long-term benefits and not at the
costs. If we know either, there is nothing that I see that
would preclude you from considering them. If they are part
of the record, and they are reasonably foreseeable, I think
that whatever is in the record has to be rationalized. But
if you don't know them, or can't know them, whether they be
cost or benefits, there's simply no way to quantify them or
to balance them."
Number 656
MR. VAN TUYN said that that raised a point that perhaps this
was an opportunity to clarify. As he understood it, under
this bill, there is a phasing promotion that would allow DNR
to break a project up into discrete segments to do a
piecemeal review of each segment. Let us take the
exploration phase of oil and gas. What are the benefits to
be accrued from the state from exploration? They would come
from development. There is no money that passes to the
state, as in a lease sale. Literally, the paper transaction
where a certain amount of money is passed over in trade for
a piece of paper; that is a concrete benefit you can analyze
in that piecemeal review. You do not look beyond that.
That is what this bill allows. We can move to exploration
where things get fuzzier because no money changes hands.
What is the benefit to the state from exploration? The
benefit of exploration is the potential for development.
But that, under this bill, if a project is phased, is not
fair game to be evaluated. If that is the case, your best
interest determination on cost and benefits is going to be
piecemeal all the way; and you cannot justify an
exploration, because the benefits are zeroed out. Mr. Van
Tuyn took that statement back and said the benefits accrue
to an oil company that employs people to do the exploration.
The costs of course are felt by the fishermen who are
impacted by the exploration itself, if it were to occur
within fishing season.
Number 690
MR. EASON said it is critical that the committee have the
opportunity to understand the fundamental dilemma that
brings us here. We are hearing a great deal about it today
in words that he hoped would encourage the committee to
understand why this legislation is needed. We do not and
will not break projects up under phasing of this bill. By
their nature, some projects are those that you do not know
enough about to make one conclusive consistency
determination. That is not his fault, or something that is
done. That is not something that he can change. Those
kinds of projects will speak for themselves. It will be up
to the public and the agencies and everyone else to judge
whether or not they agree with that, and to place that
within the public record and to debate it. But we will not,
under this legislation, artificially break up, or treat
things in a piecemeal fashion. They will be addressed, as
federal law now allows under those circumstances, with
common sense. We will recognize what they are, try to
understand all we can about them, try to quantify all we
can, and we will address them as best we can as human
beings.
"There are no benefits" is a serious mis-statement of the
benefits of exploration. Some of us would agree that people
who draw salary, who are employed, and are not on the
welfare rolls for the state, are a benefit to the state.
Those things do accrue from exploration, regardless of where
the development comes. And they are considered as part of
the findings, but we do not quantify them, because we do not
know that there will be any jobs. There may be no leases,
and we simply can't.
Number 716
MR. VAN TUYN said perhaps there is a problem with the
wording in the bill, because he agrees with everything Mr.
Eason just said about not having an artificial review of
this; but if you look at the language on page four at line
14, the operative word in the beginning of `C' is `limit'.
Line 14 says, "The only uses to be authorized by the
proposed disposal are part of that discrete phase." And
that discrete phase is whether it is the exploration of
lease transfer of paper or the development later on, to the
extent we can bring this language in line with what Mr.
Eason just said, a lot of the objections about the phasing
aspect of the bill would go away. It is pretty clear from
this language that the term "limit" and part of that
discrete phase, it does not do what he just said.
Number 725
REPRESENTATIVE NORDLUND commented on the concept of phasing.
The problem with it is that if you are not looking at the
long term possible costs, and you are trying to determine
what is in the best interest of the state, and you issue a
lease; when you get to the next phase, say the company is
starting exploration, and the company has started to invest
money, and basically ends up on the line for a great deal of
money, and you finally become aware of the fact that they
want to put a platform in a fishing area. At that point you
decide it is not in the best interest of the state to go
ahead with this project. The state is already on the line.
The court refers to this as momentum that has been built up,
and at that point, it may not be in the best interest of the
state any more to get out of the deal because you
potentially have to buy the lease back. If you had known
that up front, you probably would not have issued the lease
in the first place, because in the long term to consider all
of the consequences from all the phases is in the best
interest of the state. That is a fundamental problem with
the whole concept of phasing.
Number 750
MR. EASON addressed that subject. One of the prevalent
things, since the bill was first introduced is the specter
of having to buy back leases. Every lease we have issued
since 1978, carries a provision dealing with eventuality.
You may ultimately decide allowing a development is not in
the state's interest, and the state may not allow it to
happen. That is in the lease, and it sets out very explicit
provisions for what happens to reimburse the lessee if that
ever happens. We have never had to exercise that, even
though we have had treating projects in discrete phases some
extraordinarily controversial permit requests, which have
been denied. Two are very high profile. Niakuk, which
would be piece development, is either on production or will
be shortly. That development was first attempted to be
permitted six or seven years ago. It ran into tremendous
difficulties with the state and federal agencies over the
type of program they wanted, whether they wanted to use
offshore facilities in an area that Department of Fish and
Game, Corps of Engineers and others determined they should
not. Even though they had leases which arguably gave them
the right to do it, the permitting decision's where you
cannot do it. Your alternatives are to develop it from
shore where you cannot retrieve all the reserves, or do not
develop it, and we will buy all the leases. They are
developing the field. They are leaving oil in the ground.
The state will lose, and they will lose, but the state
agencies made the decision under the Coastal Zone Management
Act. But the trade offs to preserve the offshore area were
appropriate and we were a participant in that process. The
same thing at Lisburne, at Prudhoe Bay. The offshore
production that was needed to thoroughly produce those
reserves in Prudhoe Bay was denied because of conflicts with
surface occupancy. Prudhoe will leave millions of gallons
of oil in the ground as a result of that. That area was not
occupied by facilities, because the process worked. When
you knew there was a conflict, the agencies worked together
with the lessee to resolve them. But you have to know them,
and you have to get there before you understand what you can
do to approach them.
Number 783
REPRESENTATIVE NORDLUND commented that was a situation under
the current leasing system, not under the phase system.
What would happen under the new proposal, if you did get
into a situation where there might be recourse through the
courts for the oil industry to come back and say, "Look. You
led us down a primrose path, and we are not able to
produce."
Number 788
MR. EASON stated the provisions are, that the department,
both in the finding and in the consistency determination for
phasing, has to have the opportunity to further review the
project, and has to retain the authority to further
condition it, if necessary. In my view, this actually
reinforces and makes clear -- Not only do you have the lease
language, but you have the statutory language that puts the
lessee on notice that he proceeds under those phased
processes at his risk.
Number 795
MR. VAN TUYN said it has been recognized by this discussion,
this is really one of the central issues of SB 308; whether
or not to allow phasing. It is a difference of opinion.
All that is being asked here is to pull phasing out of this
bill, and then get working groups together during the
interim. It can work just the same way you have received a
commitment from DNR to work in the interim to bring
guidelines under the G-list for things other than oil and
gas. You have received a good faith commitment from
interested parties, be they coastal districts, boroughs,
interest groups. The administration seems to be the only
hold out in that equation. It is not an all or nothing
amendment. There is opportunity for people to get together
and reach consensus on this issue, and come back to you with
a package.
CHAIRMAN PORTER asked if there were further questions; there
being none, a roll call vote was taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James -
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #10 failed 4 - 2.
Number 821
REPRESENTATIVE DAVIDSON moved Amendment #20.
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE DAVIDSON explained the amendment. He said
this takes us back to phasing, Title 26. He referred to the
last paragraph of a letter from several different boroughs,
dated yesterday. It would delete this part of the bill and
allow for different local groups to be part of the process
to determine what they can do to protect their interest in
the process. He read the last two sentences of that
paragraph. "We request that the House Judiciary Committee
give us the opportunity to resolve these remaining issues so
that this legislation may be as broadly supported as our
past efforts. Without a consensus, the result will be a
bill which is divisive, and generates controversy in the
communities of Alaska." Representative Davidson said he
would like to avoid divisiveness and would like to allow
these people time to get involved in the issue of phasing.
Representative Davidson therefore urged his colleagues to
vote for Amendment #20.
Number 840
MR. EASON said the decision rendered by Judge Cranston in
Sale 78 suggests, that he is concerned that you can find
consistency unless you understand the future events, and
then compare them with litigating measures you have selected
for a sale. We believe that very short decision on that
particular point will render any disposal subject to similar
injunctions as long as that is the law, and as long as that
is belief of the law. Others will look to that decision.
The message is that without this opportunity to phase, and
again, it is important to remember we have intentionally
looked to the federal language to define the terms under
which you phase, and to provide the protections that would
assure you are going to have the opportunity to review
subsequent phases, and to further condition them. Without
that language, what you are looking at during the pendency
of a review by a committee of any sort, is no development.
Of course, we have several months before the legislature
convenes again. That would be a pretty drastic thing to be
facing.
Number 857
MR. VAN TUYN said if we assume there is no argument on Mr.
Eason's side, that without this bill, all development in
Alaska will stop; take a look at what would happen. Let's
take that assumption, and assume it is true: that without
this bill, all development in Alaska will stop. And let's
move forward from that platform and take a look at what
would happen if the phasing section were pulled out, we've
got all the development in Alaska stopped. We pull the
phasing out, we go to a working group, we negotiate among
the interested parties in the group, and we come back to
you, the legislature, in January, and fly through a bill
that addresses exactly the concerns DNR has, in consensus
with the people in the coastal districts and the boroughs.
How much development will actually be stopped? What
proposed developments are coming up? Of course, things were
started before this bill was passed, as Ms. Lundquist has
pointed out - (Tape side ends abruptly.)
TAPE 94-65, SIDE B
Number 000
MR. VAN TUYN: "What other project is there that could be
potentially impacted by this? If we assume somebody would
go to court and be successful in getting an injunction,
which has happened once in 80, 79, so far, lease sales. One
time, it has happened. The odds are not so great that for
the short amount of time the coastal districts and the
boroughs are asking to do a thorough analysis of this, that
the costs are that great. That is my only point.
Number 006
REPRESENTATIVE GREEN said he had been reluctant to get
involved, but believed there was a misconception about why
phasing is necessary and why it would be supportive of Mr.
Eason's statement that production would stop. Even if you
had a blue ribbon committee to work this thing over, when it
comes time to put up an area for lease sale, if past is
prologue, the judge is still going to say, "Did you consider
a certain amount of production, and a certain place that
this exploratory well will be drilled?" Having worked in
the industry, between the time an exploratory well is
approved by the management of a company, and the time it is
drilled, the location can change several times by miles.
This has happened before. So, it would be impossible at
phase one, or step one, for the department to take into
consideration all the possible ramifications, and that is
what the judge is asking. The only way it can be a
meaningful and a true response is to go a step at a time,
just like the company doing the work itself -- the one who
is going to pay the bills. They get a prospect, do some
subsurface geology, get approval to drill a well, change
their mind, put it on the shelf, get it back out again. It
is in a different place. All these things are subject to
various people looking at them. So for the department to
say, "We know this is the way it will be, and we will take
these sorts of things into consideration," very likely will
not be the thing that happens. In any of the lease sales in
Alaska, it has not worked out the way it was predicted,
either by the oil companies, or by the division. The reason
for phasing is if we are going to deal in facts, we have to
go a step at a time. If you walk down a dark hall, you do
not know what is next -- you take a step and realize it is
solid there, but you do not know the next step. When the
product you are looking at is two miles deep, you cannot
makes those kinds of assumptions and cover every possible
aspect of it.
MR. VAN TUYN said this process needs to be a workable one.
Everyone has different ideas of what that means. Is there a
down side to evaluating this over the interim? What
projects, as a practical matter are we moving ahead on that
this bill would apply to if it passes, that will stop? Sale
79 will not stop because this bill would apply to Sale 79,
according to Ms. Lundquist, if the final best interest
finding is not out by the time this bill comes out. What is
the next oil and gas lease sale? It is after the interim is
over. What is the next mining project? What is the next
timber? Mr. Van Tuyn had not heard of any big project that
is going forward that would be impacted by the lack of
phasing at this point, and therefore, the only point is,
there are a lot of people with expertise that need to be
heard on this issue. The best forum for that is a working
group where people can come to consensus. Not to have
something pushed down into the coastal districts.
CHAIRMAN PORTER asked if there were further questions on
Amendment #20. There being none, a roll call vote was taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James -
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #20 failed 4 - 2.
Number 095
REPRESENTATIVE NORDLUND moved Amendment #2.
Number 110
REPRESENTATIVE PHILLIPS objected.
Number 120
REPRESENTATIVE NORDLUND explained the amendment deals with
the part of the bill that says the director need not
speculate about future impacts. This amendment would delete
language having to do with that. It is not necessary. The
bill already states the director only address reasonably
foreseeable significant effects, and if they are that in
fact, I do not see the reason why there needs to be this
language about speculation.
Number 142
MR. EASON felt it very important that the bill reinforce for
the court the intent of the legislature, which hopefully
will indicate that speculation about future development
activities is not a very productive process, particularly if
you have made provision that any development activity
proposed, from the simplest, which means from an application
to drill an exploratory well, to the most complex: The
development of a multi-million barrel oil field; will
undergo multi-agency and public review on a very specific
basis. Facts are known and the locations define the size of
the potential conflicts with the surface resources and the
surface resource users. If all those things are known,
there is ample opportunity to make the best judgments, based
on fact, about how to condition and to proceed with
development. Speculation about that has lead and will lead,
or the attempt to force speculation about those attempts,
just makes fertile ground for additional litigation. We
think it is very important that the legislative intent
continue to reflect that.
Number 175
REPRESENTATIVE NORDLUND understood Mr. Eason's point that
the amendment does not deal with just the findings, it also
deals with other sections of the bill. It says the director
would not be required to speculate. Why is that necessary
when you only have to look at reasonably foreseeable
significant impacts?
Number 182
MR. EASON replied this bill reflects the cumulative impacts,
for want of a better word, of a number of lawsuits that, in
our view, went far afield, and were joined far afield by the
court on some pretty speculative things that have to be
considered and rationalized at the point you make a decision
to hold a lease sale. It is important that the legislature
has some agreement about the extent you want the decision
maker to speculate, because if you do not make a statement,
the court will, because it will be invited to.
Number 200
MR. VAN TUYN believed Representative James and himself had
discussed the day before what type of speculation really is
called for under the law as it currently exists. That needs
to be made clear and emphasize again the only speculation
the courts have required in the past for an oil and gas
lease sale, for example, is the speculation that when the
state leases public lands for one particular activity, oil
and gas development, you assume, you speculate oil and gas
development will occur. There has been no requirement that
you say it is going to occur at a particular latitude and
longitude. There is only the speculation such activity will
occur. The impacts of such development involve no
speculation, based on scientific, experiential and
traditional facts, as Mr. Oscar stated yesterday, and it is
based on common sense. And to the extent that Mr. Eason is
saying that speculation goes to those impacts, I
vociferously disagree that any court in the state of Alaska
has ever required such speculation and I encourage you to
read the opinions.
Number 230
CHAIRMAN PORTER asked if the impact of 1,000 barrel a day
oil well would be significantly different than 1,000,000
barrel a day oil well.
MR. VAN TUYN said absolutely. The speculation is on oil
development in a generic sense, not in a real specific
sense. If oil development occurs, the speculation is it
would be your average size oil spill.
Number 240
CHAIRMAN PORTER stated that was his point. There is not an
average size well. We have the biggest well in the world,
and a couple of the smaller ones.
Number 243
MR. VAN TUYN said there is a lot of history we rely upon to
make that speculation. What is the alternative to making
that speculation? The alternative is to literally put
blinders on, to say, "Yes, we are leasing this land for oil
and gas development; but no, we do not think it is going to
occur."
Number 247
MR. EASON brought forward a copy of a complaint regarding
this issue. There were two lawsuits filed last year which
were subsequently withdrawn. This is what we were
confronted with at the end of a multi-year project, after
the public process and the decision was rendered by writing
to us. We had a lawsuit that, instead of specifically
telling us what we had done wrong, or what we had not done
enough of; this is the sole content of the lawsuit: DNR
failed to adequately analyze the impacts of the sale on
repairing resources, failed to analyze the impacts of the
sale on archeological resources, and failed to analyze the
impacts of the sale on the Gates of the Arctic National Park
and Preserve. The next sale, Sale 75a, where we held a sale
the year before, there were no comments, whatsoever.
Private land, owned by the Arctic Slope Regional
Corporation, the sub-surface jointly owned by the state and
Arctic Slope, we had a few tracts that were not available
for leasing when we did the first sale, because there was a
contract dispute between the village of Nuiqsut and ASRC,
that was subsequently resolved. ASRC asked us to hold
another sale to make the remaining few acres, it was less
than 2,000 acres on that sale, we were sued. The claim was
DNR failed to adequately analyze the impacts of the sale on
wetland habitat and repairing them at areas. We failed to
analyze adequately the impacts of the sale on archeological
resources, and we violated the Alaska Historical
Preservation Act, with respect to documented historical and
archeological sites within the area. No discussion of how
we did that. Then the court was told the plaintiff in this
case reserved the right to amend their statement of points,
which was this: After completion of the review of the
administrative record, if they wanted the opportunity to
find if there was still something there, that they had not
claimed was a problem. Under those circumstances,
speculation, reinforced by refusal to acknowledge that we
should not do that, will encourage those lawsuits again, and
again, and again. No one can successfully defend against
them if you do not have some sideboards.
MR. VAN TUYN said he was the lead attorney in those cases.
Trustees For Alaska was the law firm representing clients
that brought those cases. If you think this particular bill
in front of you is going to change the paragraph that Mr.
Eason just read, which explains what are technically called
the points on appeal, for bringing a case; you are going to
need a two-thirds vote. That is appellate Rule 602 that
allows that. This bill is not going to change that
requirement, only a change to an appellate rule will. But
the point is that Mr. Eason said the litigation brought
these issues forth, not the points on appeal. Those are the
points on appeal. The litigation itself, that opening brief
that is filed by an appellant, in a case, if one chooses to
appeal the decision, and not bring a complaint against it,
and proceed through a normal trial; we have always tried to
go the appeal route because it saves everyone's resources
and is the more reasonable way to proceed. You file a
notice of appeal, and your opening brief is what allows you
to get very specific on your issues. It is a misconception
to think this bill is going to change that particular
paragraph.
Number 325
MR. EASON agreed. He did not believe the bill would change
the filing of lawsuits with this kind of language, but it
will give the courts the ability, once those lawsuits are
filed, to look at the administrative record and the
legislative record, and your intent, and the legislation
embodies by this, and hopefully deal with the litigation a
little bit more precisely and quickly.
CHAIRMAN PORTER asked if there were further discussion of
Amendment #2. There being none, a roll call vote was taken.
Representative James had returned to the meeting.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #2 failed 5 -2.
Number 344
REPRESENTATIVE NORDLUND moved Amendment #8.
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE NORDLUND explained the amendment; regarding
the different phases, the considerations that the department
would have to take, they would not necessarily be absolutely
limited to those considerations for that particular phase,
but they focus, the change in the word is from `limiting' to
`focusing' on circumstances that they determine material to
that particular phase.
Number 368
MR. EASON explained this specific amendment was suggested
during the discussions that were held with a working group,
and there was a great deal of discussion about it. It was
the decision that we do not want to proceed with that
language, for a very specific reason. We believe that
language would again encourage the sorts of speculation that
we addressed just a moment ago, with the phasing language
because, to us, it appears that when you say focus, that
implies that you are focused, but there are other things
that you must consider as well. That is reinforced in my
mind by the word "include" on line 27 that the proposed
amendment would accomplish, so it would leave the court open
ground to say you have to focus your analysis when you
establish the scope of review, and you have to include these
specific things. Since it does not say `limit,' it suggests
that there are other things you should have considered, and
that is reinforced again by the inclusion language. I
believe under those circumstances, it is again, fertile
ground for someone to suggest the things that should have
been included other than the ones you focused on, and you
are back into the treadmill again.
Number 395
REPRESENTATIVE NORDLUND said given other provisions of the
bill, they would still have to be reasonably foreseeable
significant effects. You would focus on the immediate ones;
you would have to look at the ones in your peripheral
vision, if they are glaring out there. It does not seem to
undo what your intent is.
Number 405
MR. EASON said the word `limit' raises concern in people's
mind, but if you read the bill in its entirety, and
particularly if you read this section, it is not very
limiting when you are limiting the scope to all the laws and
regulations that are applicable; all the facts pertaining to
that land resource or property interest, that the director
finds are material. Again, you have to make that finding in
writing in response to everything that is on the G-list for
oil and gas as well as any comments made in the public
record to anything that you know or knowledge of which is
made known to you during the process, and all the issues,
under (3) in the next (indiscernible.) That, based on the
statutes and regulations referred to in these other
provisions are material for this particular phase. That is
a very inclusive, global arena from which, facts specific, a
director will have to make a decision about the scope, and
the limiting is equivalent to defining. You are defining
the scope. Limit is there for a specific reason, because
the substitution of focus, as the amendment would propose,
leaves open the question of just what else, other than the
laws, the regulations, the facts, and everything everybody
said, you should have considered.
Number 430
MR. VAN TUYN said he looks at the amendment, he sees the
word `limit' and hears the state say that federal phasing -
and he has not been enlightened by the recent opinion passed
out this afternoon from the Attorney General's Office at the
request of Representative Phillips - but he had seen several
variations of an analysis of whether this bill pushes
federal phasing forward, and in his independent opinion as
an attorney who has worked on some of these issues, the term
`limit,' and limiting things to what is set out here, does
not meet the intent of the federal requirement, and a lot of
concerns would be appeased if the federal language was put
in there.
Number 449
MS. LUNDQUIST made the point that the amendment currently on
the table is in regard to Title 38 and not with regard to
the ACOP, and would not be (inaudible) by the federal
government.
MR. VAN TUYN said there had been a prior opinion by OCRM,
which is the federal office that oversees coastal
management, and a deep concern was expressed by that
official in the federal government that changing the phasing
for best interest findings would also affect the scope of
the consistency review process, and that they should be
discussed in tandem.
Number 461
MS. LUNDQUIST said OCRM stated concern over the Title 38
Section. However, (paper shuffling - inaudible) which they
were responding did not distinguish between Title 38 and
Title 46, and confused the two.
MR. VAN TUYN said that letter was in response to an inquiry
by Mr. Eason. He quoted the section at the top of page
three of the letter, saying, "The proposed changes to Title
38, however, are relevant to OCRM and coastal management in
that they could affect the scope of the ACMP review for
certain state activities." That was in response to Mr.
Eason, and it was directly applicable to Title 38.
REPRESENTATIVE PHILLIPS wanted to put on the record that
those letters were initially sent from Lori Ott to the
federal, and then the response from Jim to the federal, so
just keeping the record clear as to how the letters went
out.
Number 490
MR. EASON said the date of the letter was a month and a half
ago, and they were addressing a version which was the second
version of what ultimately became version X, as it was
amended and came from the Senate. A number of the specific
amendments that were done in actuality, about doubling the
length of that bill at that time, were done not only in
response to public comment, but in response to that letter.
One particular point that seemed to be embedded in that
letter was concern about the potential limitation of the
review to significant direct affects that we were
contemplating at the time, and those changes were made
explicitly in acknowledgement of concerns they had. Again,
no one can say what the OCRM is going to say about this bill
when and if it is ever passed.
MR. VAN TUYN responded, "The only reason I brought up that
letter was, not to say that it focused on one prior version
of this bill - that was a generic statement from a federal
official that recognized that changes to Title 38, scope of
review, may impact the Coastal Management Program. And that
was the only point of that letter.
Number 500
CHAIRMAN PORTER asked if there were further discussion on
Amendment #8. There being none, a roll call vote was taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott Y
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #8 failed, 4-3.
REPRESENTATIVE NORDLUND moved Amendment #3.
REPRESENTATIVE NORDLUND explained this amendment to be a
change to the finding section of the bill, making sure that
the phasing done under this legislation is consistent with
that which is permitted under the Federal Coastal Zone
Management Program. I hope the committee would consider
making this relatively minor change. The Senate did adopt a
letter of intent which reads, "It is the intent of the
legislature that the sections of this legislation pertaining
to AS 46.40 will be consistent with the Federal Coastal Zone
Management Act." This merely states that in the findings.
REPRESENTATIVE PHILLIPS quoted a letter received from the
Attorney General's Office, "Participation in this federal
program is not mandatory, and is a policy decision that has
been made by the state." She was against the amendment
because of that statement in the letter.
MR. EASON urged committee members not to adopt this
amendment. We discussed and actually helped draft the
letter of intent that was initially adopted by the Senate,
very explicitly to take the position other than this, for a
reason that we felt was important. A lot of discussion has
taken place during the review of this bill about the
discretion invested in your bureaucrats, but after all,
whether you like us or not we are your bureaucrats, and you
can control us. The process works well for that control to
happen. None of us, elected or otherwise have much control
over many bureaucrats that are 4,000 miles away, and often
do not have your interest and our interest at heart. We
think we know what the Coastal Management Program says, and
how it is interpreted today by those federal agencies. It
is conceivable that we will have disputes about that. We
think it is important, and we agreed that we should, as long
as the legislature is intent upon participating, be bound by
the Coastal Zone Management Act, but it is conceivable, and
possibly even likely, one wants to speculate that there may
be revisions as they are currently being done today, to
those regulations, which the state may want to challenge.
So we think it would be a mistake to bind, by legislative
intent, or otherwise, to a pig in the poke, essentially.
One that you may want to challenge, for whatever reason,
regardless of your position, once you know the amendments,
and understand what they may do.
Number 563
REPRESENTATIVE PHILLIPS interjected her philosophy: The
less we have to get involved with the federal government,
the better. She opposed the amendment.
Number 565
REPRESENTATIVE NORDLUND asked how the department planned on
dealing with the Senate's letter of intent.
Number 570
MR. EASON said they believed to be in compliance with the
Federal Coastal Zone Management Act. They also believe the
amendments are in compliance. If there is a dispute, there
is a process for resolving discrepancies or differences of
opinion about being in compliance.
Number 578
MR. VAN TUYN said Representative Phillips' concern about
keeping the federal government out of this, is exactly the
type of concern they heard during the testimony the day
before from coastal districts. True, the Coastal Zone
Management Program is underneath the federal program, and it
must remain consistent with it, to be considered valid under
that program. If you lose the consistency, then the federal
government takes over and you have a lot more federal
involvement. The way it works now, the Alaska Coastal
Management Program is literally another phrase for local
control over development projects in the coastal zone. The
coastal districts that we heard from yesterday are exactly
the ones that are controlling the development. The people
of Homer have a voice in federal projects now that go on in
their area. If we lose consistency with the federal
government, the people of Homer will be silenced."
REPRESENTATIVE PHILLIPS interjected that the people of Homer
would never be silenced. Never.
MR. EASON said that, again, we are engaging in some
speculation about whether or not we will lose certification.
And again, that is speculation. But then we would have to
speculate on speculation to determine whether or not we
would be able to bring ourselves back into compliance, and
then, failing that, whether or not there were actions that
could be taken. Mr. Eason said he felt that was the
difference in the way he and Mr. Van Tuyn viewed the
legislation. We certainly do not know, though we have every
reason to believe, based upon the Department of Law's
review, that what we are proposing in these amendments is in
fact consistent with the Coastal Zone Management Act.
REPRESENTATIVE JAMES offered an analogy concerning
speculation. "The words that I always hear are, `Is this
legal or not? Well, the courts will decide.' Can we
speculate as to what they are going to determine? No, we
can't. We only can just make some guidelines and hope they
understand what we're talking about. So I think that when
you get into speculation as to what someone else is going to
say, it is just that: speculation. We do the very best job
we can to get it as specific as we can, but we cannot make
any guarantee that we will have a decision down the line
that is going to be the kind of decision we're looking for.
Sometimes it just takes a risk."
CHAIRMAN PORTER asked if there were further discussion of
Amendment #3. There being none, a roll call vote was taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #3 failed, 5 - 2.
REPRESENTATIVE NORDLUND offered Amendment #7 and moved that
it be passed with unanimous consent.
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE NORDLUND explained that this amendment would
change page 3, line 24, where the scope of the findings made
by the department may only address reasonably foreseeable
significant effects. Why do we want to limit the option for
the department to look at those effects that may be somewhat
less than foreseeable, or maybe something less than
significant?
Number 645
MR. EASON said the language of the amendment, saying "shall
include" begs the question of "what else?" is there as well.
He stated, "We aren't trying to be unduly narrowing or
unduly cutting off or limiting the public's participation or
anyone's participation in the process, because we have other
provisions other than this language. We have provisions in
this bill dealing with expanded notice, provisions dealing
with expanded responsibilities to write and rationalize in
writing why we're dealing with things, and what we believe.
As a matter of fact, in the case of oil and gas, we will be
telling people up front, at a preliminary finding required
under this bill, what we believe the scope to be, so that
they have the opportunity to tell us if they believe we've
unfairly limited, and to put that in the record, and we have
to respond to it. But it's a quid pro quo. We believe that
additional responsibility on our part in the long run will
pay benefits to the state, because it will force a dialogue
that is a better record for everybody. And we're very
concerned about leaving an open end that begs the question
of `what else do we have to consider?' because it's a long
process that costs a lot of money to go through - two plus
years, in the case of oil and gas lease sales - that
process, to get to the final finding, only to find that
somebody failed to consider something that may be really
insignificant, but, because of the language of the bill,
suggests that you should have considered."
Number 675
MR. VAN TUYN pointed out that these three words have caused
a lot of heartache for every letter he had seen in
opposition to this bill, or putting suggestions toward this
bill. That includes the letter from the Kodiak Borough, the
North Slope Borough, Northwest Arctic Borough, Bering
Straits, Bristol Bay and Coastal Resource Areas, et cetera.
The point is, we cannot speculate about everything that
comes up. This leaves the department some flexibility to
take things into account down the road that they might not
have seen at step one.
Number 685
MR. EASON agreed that Mr. Van Tuyn was right in pointing out
that this has been of concern to a lot of people but he is
wrong in pointing out that this solution is the solution
that has been proposed by most people. Most people, in our
discussions, that have problems with the language "may
address only," have suggested we use "shall address only".
We consciously made the decision not to do that, because
"shall address only" is, in fact, more limiting of the
public process, and of a director's ability. By your giving
a director a direction that he may address only, you are
setting a limit. He has to address that, but you are not
telling him he cannot address something else if he wants to,
or if the public records suggest he shall.
Number 703
MR. VAN TUYN suggested a letter of intent explaining "shall
address only".
MR. EASON said that he had placed this issue on the record
at least three times during testimony and in addition five
or six during subgroup meetings.
REPRESENTATIVE PHILLIPS agreed with the letter of intent
idea.
Number 720
REPRESENTATIVE DAVIDSON concurred with Representative
Phillips.
Number 724
REPRESENTATIVE KOTT concurred as well.
REPRESENTATIVE NORDLUND asked if the committee was willing
to adopt a letter of intent?
REPRESENTATIVE PHILLIPS said she would move a letter of
intent to put it on the record for clarification.
CHAIRMAN PORTER asked if that required moving the bill back.
Number 730
REPRESENTATIVE PHILLIPS replied that it would not, because
the Senate had a letter of intent, too.
Number 738
There was discussion on whether or not you have to adopt the
Senate's letter of intent.
Number 745
ELIZABETH KERTTULA, Assistant Attorney General, Civil
Division, Department of Law stated that you do have to adopt
the Senate's letter of intent in order to move the bill.
There was further discussion concerning letters of intent.
Number 750
REPRESENTATIVE NORDLUND withdrew Amendment #7, in view of
the fact that the committee would be adopting a letter of
intent, and moved Amendment #14.
Number 755
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE NORDLUND explained the amendment as
substituting the word "known" for "material," those
considerations that are material to a particular phase would
be substituted with those circumstances that are known at
the time.
MR. EASON stated opposition to the amendment. It is quite
likely that the class of known facts will almost always be a
greater universe than material facts. He stated, "I would
not want us to be in the position of arguing whether we had
considered and thought about all the known facts even if
they weren't material or in any other way relevant to a
decision."
Number 793
MR. VAN TUYN reiterated that to define "material" means
something different to each person and the sole discretion
for defining that word was being put in the hands of one
state agency and one current administration. "It could end
up being defined," Mr. Van Tuyn cautioned, "to preclude
development, because what is material could be a much
broader universe under a different administration than it
perhaps it is under this one. And that's where the concerns
come up with respect to a lot of people that we've heard
from who have said this bill is as much anti-development as
it is pro-development."
CHAIRMAN PORTER asked if there were further development on
Amendment #14. There being none, a roll call vote was
taken.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott -
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #14 failed, 4 - 2.
Number 814
REPRESENTATIVE DAVIDSON moved Amendment #15.
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE DAVIDSON described the amendment to
substitute the word "and" for "or." This ensures the
written findings will be considered in both the preliminary
and final findings of fact.
Number 822
MR. VAN TUYN said the point is if meaningful public input is
to be had by this bill, it is very important that members of
the public, who are not experts in a particular area, but
have deep concerns about that area, know what DNR has to
know in time for them to comment. Know what Fish and Game
knows in time for them to comment. They can factor it into
their own concerns. Without requiring that those things go
into the preliminary finding, they could be left out, and
the public then doesn't have the opportunity to apply its
own knowledge, its own experience, its own concerns, to
those issues. It will come up for the first time in the
written finding and nobody will have had a chance to comment
on it...."
Number 832
MR. EASON expressed belief that it is clear that whether you
are doing a preliminary finding, or a final written finding,
you will have to consider the issues on the list. This was
the drafting of Mr. Chenoweth, the legislative drafter. He
specifically asked what our intent was, and we said our
intent is, that regardless of whether we are doing the
preliminary finding, or the final finding, we will do the
same scope, and we will define the scope. The word "or" is
that if we're doing a preliminary finding, we will do this;
if we're doing a final finding, we will do this. But we
will only do it for oil and gas lease sales, because there
is no statutory requirement for preliminary findings for
other disposals.
MR. VAN TUYN again suggested a letter of intent (that "or"
means "and") in this particular case.
Number 845
MS. LUNDQUIST noted that on line 13, "The Director shall
consider and discuss in a preliminary or in a final written
filing." You have to read the entire sentence. You cannot
read the "preliminary or final" without reading "shall
consider and discuss". It is clear from the language that
"the Director shall consider and discuss in the preliminary
or in the written findings" makes it a requirement both in
the preliminary and in the final.
CHAIRMAN PORTER agreed with Ms. Lundquist.
Number 853
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott -
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #15 failed 4 - 2.
TAPE NO. 94-66, SIDE A
Number 000
REPRESENTATIVE NORDLUND offered Amendment #18
Number 005
Somehow this section of the tape did not record, but there
was a short discussion on Amendment #18 between MR. EASON,
MS. LUNDQUIST, MR. VAN TUYN, REPRESENTATIVE DAVIDSON, and
REPRESENTATIVE PHILLIPS. The amendment proposes to delete
all materials from page 9, line 21.
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #18 failed 5 - 2.
Number 150
CHAIRMAN PORTER: "Back on the record?"
REPRESENTATIVE NORDLUND: "Thank you, Mr. Chairman. I would
like to offer one additional amendment, and then
Representative Davidson is going to offer his conceptual
amendment. The amendment would be #22, and I would move
that amendment."
REPRESENTATIVE PHILLIPS objected.
REPRESENTATIVE NORDLUND described the amendment to extend
the period of comment time, regarding certain disposals of
land. It is currently 21 days, and people feel it is much
too short. In some rural cases, it takes longer for word to
get around, and a 90 day period would seem more appropriate.
Representative Nordlund referred to Mr. John Oscar's
testimony of the previous day concerning this issue.
MR. VAN TUYN supported REPRESENTATIVE NORDLUND's comments.
Number 280
MR. EASON objected, because the provision would affect every
disposal, other than oil and gas; many of which are
inconsequential in nature, very routine disposals that are
not of statewide interest. There is a distinction that is
overlooked with this provision. The law right now provides
notice will occur in no less than 21 days. In some cases,
it may be completely legitimate to have a shortened, 21 day
period between the notice and the disposal, because it is
something that is inconsequential and non-controversial, but
the system has worked quite well, and those instances where
you need additional time, you have the right to exercise
that discretion, and to provide time. As the law stands
today, you cannot do any less than that regardless of what
kind of a disposal it is. It is appropriate, and has worked
quite well.
Number 306
REPRESENTATIVE PHILLIPS noted as a person who was born and
raised in Northwest Alaska, and has many, many friends
around rural Alaska; communications in rural Alaska is
tremendously sophisticated compared to what it was 20 years
ago, or 30 years ago, or 40 years ago. Almost everywhere in
Alaska there are telephones and telefaxes and teleprompters,
and public radio, public television, and everything else.
The idea that we are this obscure, uncommunicative state, is
a scare tactic that has been thrown on us for a long time
and it just simply is not true.
Number 323
REPRESENTATIVE NORDLUND said he has never lived in rural
Alaska, and does not know; but he does know what Mr. Oscar
said, and takes it to heart. He said when folks go out to
fish camp, a lot of times they do not have television or
radio, and telephones. In a situation like that, a 21 day
period might be too short. He believed this is one
amendment they could adopt that would show some compromise,
helping to alleviate some of the political concerns with
this bill, but it is up to the committee to decide that.
Number 335
REPRESENTATIVE DAVIDSON said a little bit more time is a
little bit more consideration. We may live in a very modern
telecommunicative world, but the facts speak for themselves.
Alaskans go off into the great beyond, and sometimes do not
get the messages as fast as we want.
REPRESENTATIVE PHILLIPS said to keep in mind the language is
"not less than 21." It does not say, "only 21".
CHAIRMAN PORTER asked if there was further discussion
concerning Amendment #22. There being none, a roll call
vote was taken.
Number 346
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Amendment #22 failed, 5 - 2.
REPRESENTATIVE DAVIDSON moved the Conceptual Amendment to
delete non-oil and gas issues from this bill. He reminded
the committee that the reason for doing this is there are
not statutory standards to give the protections necessary
particularly to our local communities, who have spent an
awful amount of time trying to stay up and out of the
clutches of federal control as well as being overly imposed
upon by state decisions as well. Out in those local
communities we have seen, through correspondence, as well as
testimony that there is an eager willingness to serve more
groups to get a more consensus agreement on including these
non-oil and gas areas into the bill. There is a strong
desire to participate in such discussions and work groups.
Finally, as the letter I quoted earlier indicated, there is
a desire as well, to avoid divisiveness, and the loss of
local control. With that Representative Davidson urged
committee members to delete non-oil and gas issues from this
bill, and we can move forward, looking to next session for a
better bill.
REPRESENTATIVE PHILLIPS objected.
MR. VAN TUYN commented that we are not talking about
forever. We have received commitments from all interested
parties; boroughs, districts, and others, to get together
and discuss this exact issue. DNR is willing to do so, and
has provided a letter to that effect. He suggested doing it
before the bill goes forth, so these standards can be used
by everyone, when looking at their projects.
Number 400
MR. EASON thought they should look at the bill as a whole.
He said there are some very important provisions dealing
with an analysis of the facts, the law, the facts pertaining
to the land resources in the use and disposal you are
considering; and the public provisions you are including
here, all of which are designed as a package, to provide a
good written record with good public participation
regardless of what this disposal is. We have certainly had
in mind other disposals as we work to try to make this a
better bill than we have today, because there simply are no
standards for any disposal that are not subject to judicial
intervention, and judicial risk of re-interpretation. There
are no sideboards, and we have intentionally come to you for
some direction, including the legislative findings of this
bill. So regardless of the disposal, the court will have
some sense of the philosophical intent of the legislature,
as well as the implications for what that means for a judge
who will be interpreting a challenge to a disposal under
that statute.
REPRESENTATIVE DAVIDSON said in response that there are a
tremendous number of local agencies, groups and people with
a lot of expertise who have spent a lot of years working to
ensure that the very kinds of things that are going to
happen to them as a result of this bill, possibly, do not
happen. We've seen, we've heard these people in testimony.
I think that if we cannot at least give them the opportunity
to be part of the public policy process that affects them so
directly, then, we have to give them a much more detailed
explanation than they've gotten this afternoon.
Number 430
REPRESENTATIVE PHILLIPS said she really appreciated the
letter from the Commissioner of the Department of Natural
Resources today, saying they will be drafting regulations to
address the concerns on other than oil and gas issues. She
then made a formal request that the department take the
interests of all the local communities, and go out, and have
hearings in all the local areas, as they put together this
list. I do not think that is an unreasonable request, and
it would certainly bring all the players into consideration
as the department works on this.
Number 456
REPRESENTATIVE JAMES expressed concerns about the letter.
It is a commitment, but does not have a time frame, or any
specifics as to when it will happen, and what the specifics
of it will be. She said she would like to have some kind of
a time frame, under which these will be accomplished. She
felt more comfortable putting it into statute than into
regulation. She would like to see DNR commit to get a G-
list for non-oil and gas issues that could be put into
legislation next year, and that does take input from the
communities. Representative James was willing to not limit
the legislation before the committee to oil and gas if a
stronger commitment could be secured from the Department of
Natural Resources as to how they would address these issues.
She asked Mr. Eason, although he was specifically
representing the Division of Oil and Gas, if he could speak
for the Department of Natural Resources as a whole.
Number 480
MR. EASON thought he could speak for the Commissioner since
they had discussed the letter before it was drafted. The
purpose of not having a specific timeline was not to try and
hide the ball, but to simply recognize that they were in the
middle of a process where Mr. Eason has been tied to the
halls of the legislature for several days; that many of the
other directors are similarly situated; they are away from
their offices, they are here, they are working on other
pieces of legislation. Our intent is to convene as soon as
the session is over, and we have a chance to sit down and
discuss how we are going to proceed with trying to get
public involvement. Mr. Eason had spoken with Assistant
Attorney General Kerttula of the Division of Governmental
Coordination. He said he felt it would be reasonable to try
to use that division in some sort of telecast networking and
facilitating of meetings. It would be his intent to
undertake this relatively soon, i.e, within the next few
weeks, but he could not control the process given the
requirements of the Administrative Procedures Act and the
time required to draft a document in conjunction with a
large number of people, as well as a subsequent review by
the Department of Law.
Number 505
REPRESENTATIVE JAMES had a follow-up question. She asked
Mr. Eason to respond to her concern about feeling more
comfortable having this in statute than in regulation.
Number 508
MR. EASON understood what she was saying and if that was the
intent of the group, they could structure this process to
not be one where they have the intent of drafting
regulations, but with the intent to have working groups
gather and give recommendations for lists and see if they
can provide a list of that sort for your consideration.
Number 515
REPRESENTATIVE JAMES stated her desire would be to set up
communication with the interested parties to have the
potential of either regulations or legislation; whichever
seemed to best meet their needs. She also acknowledged the
process would be complicated because it would concern all
different kinds of sales. Representative James concluded,
"What I would really like to have, my desire would be, that
the input from the public would be either regulations or
statute, whichever happened to seem to be the best method to
do that - not just regs and then find out we need statutes,
or not just statutes and then find out we need regs; and I
don't know how you could bring those up together. But, for
what it's worth, that would be my desire."
REPRESENTATIVE GREEN said he had communicated that afternoon
with a constituent active in the Coastal Zone review
process, and that he had indicated to that person that if he
is re-elected, and if these issues had not been adequately
addressed, that he would pre-file legislation to that
effect.
REPRESENTATIVE DAVIDSON said desires are not always paid
attention to by the bureaucracy. "We must be very cognizant
and sensitive to those people at the local level who are
going to be most impacted by what we're doing here today.
That's why I offer this conceptual amendment, because I know
the people out there are the ones with the expertise,
certainly as much expertise as we have - well, what are we
on, our fifth or sixth commissioner of Natural Resources?
This is the kind of thing that bothers me, Mr. Chairman.
It's out there at the local level where we get the
continuity and judgment and the experience over the long
haul, because these are the people whose interests are most
directly affected by these decisions." Representative
Davidson again urged his colleagues to vote for the
Conceptual Amendment to remove non-oil and gas from the
legislation, and said he would be offering another
conceptual amendment as well if he might.
CHAIRMAN PORTER commented that he did not intend to support
the amendment. "I would say to those who were considering
legislation in this area that we would probably be well-
served by the process that DNR is committed to go through in
the development of regulations. Quite frankly, because of
where we are, and I don't anticipate moving in the next
couple of years, it's easier and (there's) more opportunity
for local input into these kinds of things through the
regulatory process than there is through the development of
law. Is there any other discussion on the conceptual
amendment that we have been discussing?" There being none,
a roll call vote was taken.
Number 583
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green Y
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Conceptual Amendment #1 failed 4 - 3.
REPRESENTATIVE DAVIDSON moved Conceptual Amendment #2 which
establishes a working group from the various coastal
communities to work on these issues we have been
discussing...to ensure that in fact these local communities'
concerns are included.
Number 620
REPRESENTATIVE PHILLIPS objected to the amendment but, at
the same time, requested clarification from the Department
of Natural Resources that they would do this. She noted
that establishing a legislative working group would entail a
fiscal note, a resolution establishing the group, and other
technicalities; but if they could get a commitment from the
DNR on record that the DNR would do this, the concerns of
the conceptual amendment would be taken care of.
Number 625
MR. EASON said the Division of Governmental Coordination was
the perfectly logical place to start, since that is the
group that has communicated with, and brought together this
group that has worked with us, and the amendments that have
been done to date on the Senate side. He said it was
certainly his intent to use the Division of Governmental
Coordination to the maximum extent possible to help define
how to ensure that all interested parties have an
opportunity to participate.
Number 636
CHAIRMAN PORTER said we have already established a letter of
intent, and asked if it would be appropriate to include Mr.
Eason's commitment in that letter of intent.
REPRESENTATIVE DAVIDSON said he would be prefer moving
forward with the amendment to establish the group.
REPRESENTATIVE PHILLIPS said she did not believe they could
amend this bill to establish a group unless it was broken
down as far as the fiscal notes, et cetera. Yet, a motion
could be made out of the committee to have it established,
not necessarily tie it as an amendment to the bill.
Number 649
REPRESENTATIVE DAVIDSON was not deterred from his intent to
establish a working group. He was not concerned about
fiscal notes, because he felt it very important that they
have money to do this kind of thing. He hoped it would go
to the Finance Committee because he felt it should have gone
not only to the Finance Committee but also to the Resource
Committees, as well.
CHAIRMAN PORTER asked if there was further discussion on
Conceptual Amendment #2. There being none, a roll call vote
was taken.
Number 655
ROLL CALL VOTE Representative Brian Porter N
Representative Jeannette James N
Representative Gail Phillips N
Representative Pete Kott N
Representative Joe Green N
Representative Cliff Davidson Y
Representative Jim Nordlund Y
Conceptual Amendment #2 failed, 5 - 2.
CHAIRMAN PORTER re-offered the opportunity to put the
language into the letter of intent and asked that it be
prepared by Representative Nordlund.
REPRESENTATIVE PHILLIPS agreed that was a good idea and said
she would be willing to put forward a motion on that.
CHAIRMAN PORTER said he did not feel a motion was necessary.
REPRESENTATIVE PHILLIPS asked if the committee needed to
adopt the Senate letter of intent.
CHAIRMAN PORTER said this could be done after the bill was
passed.
REPRESENTATIVE GREEN proposed to move out SB 308 with zero
fiscal notes with the Senate letter of intent and the letter
of intent from the committee, as described.
There was objection to moving the bill.
ROLL CALL VOTE Representative Brian Porter Y
Representative Jeannette James Y
Representative Gail Phillips Y
Representative Pete Kott Y
Representative Joe Green Y
Representative Cliff Davidson N
Representative Jim Nordlund N
The bill was moved as described.
The House Judiciary Standing Committee meeting adjourned at
6:45 p.m.
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