Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/31/2011 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS


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03:34:25 PM Start
03:34:46 PM Confirmation Hearing: Commissioner - Department of Commerce, Community and Economic Development
04:03:19 PM Presentation: Alaska Coastal Management Program
04:58:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearing: TELECONFERENCED
Susan Bell, Commissioner, Department of Commerce,
Community and Economic Development
+ Alaska Coastal Management Plan TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 31, 2011                                                                                         
                           3:34 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Donald Olson, Chair                                                                                                     
Senator Thomas Wagoner                                                                                                          
Senator Albert Kookesh                                                                                                          
Senator Linda Menard                                                                                                            
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING                                                                                                            
     Commissioner - Department of Commerce, Community and                                                                     
     Economic Development                                                                                                     
          Susan Bell                                                                                                            
                                                                                                                                
     - CONFIRMATION ADVANCED                                                                                                    
                                                                                                                                
PRESENTATION: ALASKA COASTAL MANAGEMENT PROGRAM                                                                                 
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SUSAN BELL, Commissioner Designee                                                                                               
Department of Commerce, Community and Economic Development                                                                      
(DCCED)                                                                                                                         
Juneau, AK                                                                                                                      
POSITION STATEMENT: Testified as candidate for confirmation as                                                                
commissioner of the Department of Commerce, Community and                                                                       
Economic Development (DCCED).                                                                                                   
                                                                                                                                
JOSEPH BALASH, Deputy Commissioner                                                                                              
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Gave  an overview  of  the  current  Alaska                                                             
Coastal Management Program.                                                                                                     
                                                                                                                                
GARY WILLIAMS, Coastal District Coordinator                                                                                     
Kenai Peninsula Borough                                                                                                         
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Gave a critique  and offered  suggestions on                                                             
the current Alaska Coastal Management Program.                                                                                  
                                                                                                                                
TOM LOHMAN, Attorney                                                                                                            
North Slope Borough                                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT:  Gave a critique  and offered  suggestions on                                                             
the current Alaska Coastal Management Program.                                                                                  
                                                                                                                                
KATHY WASSERMAN, Executive Director                                                                                             
Alaska Municipal League                                                                                                         
POSITION STATEMENT:  Gave a critique  and offered  suggestions on                                                             
the current Alaska Coastal Management Program.                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:34:25 PM                                                                                                                    
CHAIR  DONALD  OLSON called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 3:34 p.m. Present                                                               
at the call  to order were Senators Menard,  Wagoner, Kookesh and                                                               
Chair Olson. Senator Ellis arrived shortly thereafter.                                                                          
                                                                                                                                
 ^Confirmation Hearing: Commissioner - Department of Commerce,                                                              
               Community and Economic Development                                                                           
                                                                                                                              
3:34:46 PM                                                                                                                    
CHAIR OLSON announced  that the first order of  business would be                                                               
to hear the  confirmation hearing of Susan Bell  for the position                                                               
as  commissioner of  the Department  of  Commerce, Community  and                                                               
Economic  Development (DCCED).  He  asked Ms.  Bell  to tell  the                                                               
committee about  her background and  why she was chosen  for this                                                               
position.                                                                                                                       
                                                                                                                                
3:35:14 PM                                                                                                                    
SUSAN  BELL,  Commissioner   Designee,  Department  of  Commerce,                                                               
Community and Economic Development  (DCCED), said prior to taking                                                               
this position  she worked in  the governor's office as  a special                                                               
assistant. In this position she  worked primarily with DCCED, but                                                               
she  also spent  time  with  the Department  of  Revenue and  the                                                               
Department  of Administration.  She said  that this  was a  great                                                               
opportunity to  become familiar with  some of the issues  and the                                                               
people at DCCED. She explained  that before that position she was                                                               
a  principal of  the McDowell  Group, a  research and  consulting                                                               
firm.  She  said that  the  firm  gave  her  the chance  to  work                                                               
statewide on  issues that  are directly relevant  to the  work in                                                               
her current position  at DCCED. She noted that she  was also able                                                               
to work  with number of  state agencies including  the Department                                                               
of Commerce and  the Department of Transportation.  She said that                                                               
before this she worked as one  of the vice presidents at Goldbelt                                                               
Incorporated. She  explained that  this was a  unique opportunity                                                               
for  her  to  work  with  an organization  that  was  focused  on                                                               
economic development,  job creation  and shareholder  hire within                                                               
the context  of the ANCSA  [Alaska Native Claims  Settlement Act]                                                               
corporation.  She noted  that  she  also has  a  lot of  business                                                               
management  and marketing  experiences and  has lived  and worked                                                               
throughout the state.                                                                                                           
                                                                                                                                
3:37:42 PM                                                                                                                    
SENATOR  WAGONER  said  Trout  Unlimited,  one  of  the  Regional                                                               
Seafood  Development Associations  (RSDA) administered  by DCCED,                                                               
was given  money from the  commercial salmon fisheries.  He asked                                                               
how DCCED  tracks this  type of  "gift" or  "grant" and  how this                                                               
fits  into to  the overall  goals of  RSDA. He  noted that  Trout                                                               
Unlimited is  an advocacy  organization for  environmental issues                                                               
both nation and worldwide.                                                                                                      
                                                                                                                                
COMMISSIONER BELL replied  that this issue came  to the attention                                                               
of   both  the   Division   of  Economic   Development  and   the                                                               
commissioner's  office last  week. She  concurred that  DCCED has                                                               
regulatory  and oversight  responsibilities  for these  marketing                                                               
organizations.  She explained  that the  department is  currently                                                               
talking directly  with RSDA  and the Department  of Law  (DOL) in                                                               
order  to  understand  what  the expenditure  was  and  what  the                                                               
appropriate response  should be. She  said she would be  happy to                                                               
report  back to  the committee  after the  department has  made a                                                               
determination.                                                                                                                  
                                                                                                                                
SENATOR WAGONER said he would appreciate seeing the report.                                                                     
                                                                                                                                
3:40:15 PM                                                                                                                    
SENATOR MENARD recognized Commissioner Bell's accomplishments.                                                                  
                                                                                                                                
SENATOR  ELLIS  said that  he  has  some constituents  that  were                                                               
involved with the statewide head  tax for the cruise industry. He                                                               
asked her  to give the  committee an update  on what is  going on                                                               
with  the  cruise industry  market  in  Alaska and  whether  some                                                               
cruise  lines have  added ships  since the  rollback of  the head                                                               
tax.                                                                                                                            
                                                                                                                                
COMMISSIONER BELL replied  that this year Disney  Cruise Line and                                                               
Oceana Cruises would be introduced  and Crystal Cruise Line would                                                               
be returning. She  explained that while this  will introduce less                                                               
than 10,000  passengers, they are  very much welcomed.  She noted                                                               
that  last  fall  Princess  also   announced  that  it  would  be                                                               
returning  another cross-gulf  ship in  the summer  of 2012.  She                                                               
stressed that with  a cross-gulf ship there  are greater economic                                                               
benefits for  the state  because many  of these  passengers spend                                                               
time in Alaska on  their own or opt to purchase  a cruise tour of                                                               
Alaska.                                                                                                                         
                                                                                                                                
She  added that  when attending  Cruise Shipping  Miami with  the                                                               
governor a few weeks ago  Holland America announced that for 2012                                                               
it would  be making some  capacity increases, which  would amount                                                               
to another  11,000 passengers. She  noted that while  this year's                                                               
passenger increase is  quite small, 2012 will see  an increase of                                                               
about 60,000 new passengers in  the market. She acknowledged that                                                               
this is  still a long way  away from the 150,000  passengers that                                                               
Alaska lost in  a two year period. She added  that early research                                                               
from  the  Alaska Travel  Industry  Association  (ATIA) shows  an                                                               
increase in visitors for this summer.                                                                                           
                                                                                                                                
3:44:21 PM                                                                                                                    
SENATOR ELLIS asked for confirmation  that a lot of the follow-up                                                               
was due  to the worldwide  economic situation, as opposed  to the                                                               
head tax. He noted that there  were a number of cruise lines that                                                               
announced  coming  to Alaska  when  the  state had  the  citizen-                                                               
inspired head tax.                                                                                                              
                                                                                                                                
COMMISSIONER BELL  agreed that the  state and many  businesses in                                                               
Alaska were affected by the  economic decline. She explained that                                                               
with the passage of the head  tax ballot initiative there was, at                                                               
the time, a suite of nearly $70  million in new taxes and fees, a                                                               
rise in the  environmental standards, the inclusion  of the Ocean                                                               
Ranger  Program, and  a strong  message sent  to the  cruise line                                                               
industry from Alaskans.  She said that the  decline in passengers                                                               
was  a combination  of these  fees  and the  economic decline  in                                                               
2009. She said  that the recovery in the industry  that the state                                                               
is now seeing is not just a  role back in fees but also outreach.                                                               
She reminded the  committee that the state was in  a lawsuit with                                                               
the cruise  lines. She  explained that the  halt of  the lawsuit,                                                               
the increase  in state marketing,  the outreach to  the industry,                                                               
and the changes that were made  last year in the fee structure go                                                               
hand-in-hand in restoring the market.                                                                                           
                                                                                                                                
SENATOR  ELLIS noted  that Alaskans  are generally  proud of  the                                                               
state's pristine  waters and clean air  and this is part  of what                                                               
the cruise industry is marketing.                                                                                               
                                                                                                                                
He asked, in  the conversations that she and the  governor had in                                                               
Miami, whether they  had the opportunity to ask  the industry for                                                               
marketing support  that benefits more  than just the  cruise ship                                                               
industry.                                                                                                                       
                                                                                                                                
COMMISSIONER BELL replied that the  main message to both the main                                                               
delegates  and  in  one-on-one  small  group  meetings  that  the                                                               
governor had with cruise lines was  about what Alaska is doing in                                                               
regards to marketing, the changes  made in the fee structure, and                                                               
the  state's  commitment  to high  environmental  standards.  She                                                               
explained that  it was  more a  message of  outreach in  order to                                                               
restore  business  and  to  welcome.   She  noted  that  she  was                                                               
previously  on   the  Alaska  Tourism  Marketing   Council  as  a                                                               
representative  of Southeast  Alaska  Tourism  Council. She  said                                                               
Alaska's public private partnership has stood out.                                                                              
                                                                                                                                
SENATOR ELLIS asked  if the cruise line industry  offered to help                                                               
the state monetarily with its marketing.                                                                                        
                                                                                                                                
COMMISSIONER BELL  answered no; there was  no voluntary offering.                                                               
She  noted that  the  cruise line  industry  does participate  as                                                               
members by  purchasing ads  and labels  that all  businesses have                                                               
access to through the pay-to-play programs.                                                                                     
                                                                                                                                
3:50:01 PM                                                                                                                    
SENATOR WAGONER said  there has been an erosion  of population in                                                               
rural areas  over the last  few years.  He asked whether  this is                                                               
still occurring.                                                                                                                
                                                                                                                                
COMMISSIONER  BELL replied  in the  fall and  winter of  2008 and                                                               
2009 there were  high gas prices and a lot  of media attention on                                                               
the movement out  of rural areas. She explained  that during this                                                               
time  the  Rural  Subcabinet was  created,  which  analyzed  fuel                                                               
costs,   distributions  systems,   and  population   trends.  She                                                               
explained  that  these analyses  showed  that  after the  initial                                                               
spike  in 2009,  the  movement to  and from  the  rural to  urban                                                               
communities  has  become more  fluid.  She  noted that  community                                                               
stability,  safety,  and  economic viability  are  concerns.  She                                                               
added  that  right now  is  a  transition period  as  individuals                                                               
settle into their newly appointed  roles. She said the Department                                                               
of  Labor  and  Workforce  Development and  DCCED's  Division  of                                                               
Community and Regional Affairs (DCRA)  staff have been focused on                                                               
the fresh census  data since so much of its  funding formulas are                                                               
based  on population.  She  said "ultimately,  it's  not just  to                                                               
measure  the numbers,  it's  to  make sure  that  we  get to  our                                                               
mission of strong  communities and a healthy  and diverse economy                                                               
that allows people to stay in their homes."                                                                                     
                                                                                                                                
3:52:42 PM                                                                                                                    
CHAIR OLSON asked what she sees  the vision of DCCED being in the                                                               
future, especially with regard to rural Alaska.                                                                                 
                                                                                                                                
COMMISSIONER  BELL  replied  that  DCRA has  recently  grown  and                                                               
strengthened in the past few  years. She explained that one thing                                                               
she believes  is important  to do is  strengthen and  re-tool the                                                               
Division of  Economic Development  so that  it can  work hand-in-                                                               
hand with  DCRA. She noted  this has  been a focus  that preceded                                                               
her  coming into  the commissioner  role.  She said  that she  is                                                               
looking forward  to working with  DCCED's talented  and dedicated                                                               
staff  in  order  to  be  as effective  as  possible  in  program                                                               
delivery and work collaboratively  across the department and with                                                               
other departments. She explained that  DCCED has the potential to                                                               
provide leadership for businesses and  communities and there is a                                                               
strong  desire within  the department  to achieve  that potential                                                               
fully.                                                                                                                          
                                                                                                                                
CHAIR OLSON said he was  reminded by a previous commissioner that                                                               
"commissioners  come and  commissioners  go." He  asked what  she                                                               
hopes to accomplish during her time.                                                                                            
                                                                                                                                
COMMISSIONER  BELL  replied  that   she  feels  the  Division  of                                                               
Economic Development shrunk  over the past few years  and this is                                                               
an area  where a legacy could  be built. She explained  that last                                                               
year Alaska was ranked 50th out  of 50 with regard to the state's                                                               
competitiveness. She  said she believes  that Alaska has  so much                                                               
to  offer  in  terms  of its  people,  location,  resources,  and                                                               
innovation. Advancing Alaska is one of  the key areas that she is                                                               
focused on.                                                                                                                     
                                                                                                                                
3:56:38 PM                                                                                                                    
CHAIR OLSON  asked whether  she sees  DCCED expanding  during her                                                               
time as commissioner.  He explained that rural  areas are largely                                                               
along the  coastline of Alaska  and involved and effected  by the                                                               
Alaska  Coastal Management  Program (ACMP).  He noted  that there                                                               
has  been a  fair  amount of  dissatisfaction  that has  occurred                                                               
since  2003  with  the  program being  under  the  Department  of                                                               
Natural  Resources (DNR).  He explained  that  as policy  makers,                                                               
legislators have  looked into moving  the program out of  DNR and                                                               
putting it into another department,  possibly DCCED. He asked her                                                               
to share her thoughts on this option.                                                                                           
                                                                                                                                
COMMISSIONER BELL said  that she had not realized  that DCCED had                                                               
been contemplated  as a possible  "home" for ACMP.  She expressed                                                               
her compliments  to the efforts that  have been made down  to the                                                               
division director level. She explained  that ACMP can draw on the                                                               
strengths of each  state department and division.  She noted that                                                               
great strides have been made, in  a short amount of time, to work                                                               
through  many of  the frustrations  and  ensure that  communities                                                               
have its funds.  She said that she is not  prepared to comment on                                                               
DCCED's ability to house ACMP.                                                                                                  
                                                                                                                                
With regard  to Senator Olson's initial  question about expanding                                                               
DCCED, she said the first thing that  needs to be done is to ask:                                                               
"can we be  more effective with the resources that  we have?" She                                                               
said that she believes the answer is "yes."                                                                                     
                                                                                                                                
4:00:15 PM                                                                                                                    
At ease from 4:00 p.m. to 4:02 p.m.                                                                                             
                                                                                                                                
4:02:17 PM                                                                                                                    
SENATOR KOOKESH moved to forward the  name Susan Bell to the full                                                               
legislature sitting in  joint session for a vote.  There being no                                                               
objection, it was so ordered.                                                                                                   
                                                                                                                                
4:02:26 PM                                                                                                                    
At ease from 4:02 p.m. to 4:03 p.m.                                                                                             
                                                                                                                                
        ^Presentation: Alaska Coastal Management Program                                                                    
                                                                                                                              
4:03:19 PM                                                                                                                    
CHAIR OLSON  announced that the  next order of business  would be                                                               
to  hear  an  overview  of the  Alaska  Coastal  Management  Plan                                                               
(ACMP). He noted that Mr. Balash  was one of the main authors who                                                               
put the  sunset provision into  the program, which will  occur in                                                               
the next couple of months.                                                                                                      
                                                                                                                                
4:04:14 PM                                                                                                                    
JOSEPH  BALASH,   Deputy  Commissioner,  Department   of  Natural                                                               
Resources (DNR),  said the governor  submitted a  bill requesting                                                               
an extension  of ACMP. He  listed some  of the highlights  of the                                                               
program.                                                                                                                        
                                                                                                                                
He explained  that the federal  structure for the program  is the                                                               
Coastal  Zone  Management  Act (CZMA),  which  allows  states  to                                                               
develop its  own coastal program.  He noted that it  is voluntary                                                               
on the part of states to implement it in one of three ways:                                                                     
                                                                                                                                
Technique A is  a locally implemented program  structure, such as                                                               
Oregon, where the  state develops the standards  and allows local                                                               
districts to implement and issue the permits and conditions.                                                                    
                                                                                                                                
Technique B is a state standardized  program and there is no real                                                               
local involvement.                                                                                                              
                                                                                                                                
Technique C is  a hybrid of technique A and  B, where communities                                                               
are  involved  in the  development  of  standards, planning,  and                                                               
issuance of  permits. He noted  that the adoption of  technique C                                                               
for implementation is unique to Alaska.                                                                                         
                                                                                                                                
He explained that the program in  Alaska is a network program and                                                               
is dependent upon coastal participation  by local communities. He                                                               
acknowledged  that  a number  of  communities  and districts  are                                                               
frustrated with the current process.  He explained that the rules                                                               
for local  participation are set  out in statute  and implemented                                                               
through regulations.                                                                                                            
                                                                                                                                
4:08:32 PM                                                                                                                    
MR.  BALASH explained  that there  are a  variety of  communities                                                               
around the  state that have  chosen to become  districts formally                                                               
under the  program. He noted that  this is voluntary on  the part                                                               
of the community.                                                                                                               
                                                                                                                                
He said  the process for  developing or amending a  local coastal                                                               
plan is  lengthy and  involves a tremendous  amount of  input and                                                               
comment  by  all  stakeholders.   [Page  3  of  the  presentation                                                               
describes  this process.  Presentation included  in the  document                                                               
packet.]                                                                                                                        
                                                                                                                                
He highlighted the last row on page  3 in between box one and two                                                               
as an opportunity for mediation.  He explained that this has been                                                               
used effectively by some communities  and with impasse in others.                                                               
He emphasized that the amendment  process is lengthy and can take                                                               
two to three years to complete.  He noted that federal review and                                                               
approval is  required as a  part of  that process before  a local                                                               
plan is finalized.  He explained that the most  important part of                                                               
the coastal district plan approval  is the enforceable components                                                               
of the plan. These include:                                                                                                     
                                                                                                                                
   · Enforceable policies                                                                                                       
   · Designated areas                                                                                                           
   · Maps of where the designated areas are located                                                                             
                                                                                                                                
He explained that the enforceable  policies are governed by a set                                                               
of statutes  and regulations and  that these requirements  were a                                                               
large  part  of  the  legislation  that  was  considered  by  the                                                               
legislature and  adopted in  2003. He  highlighted some  of these                                                               
policies, an example  being that a local policy  cannot address a                                                               
matter that is  adequately addressed by state or  federal law. He                                                               
explained  that the  use of  the word  "adequately" results  in a                                                               
subjective determination made  by an individual as  to whether or                                                               
not  a  state  or  federal regulation  governing  the  particular                                                               
resource or  policy in question  already exists. The  adequacy of                                                               
this is  determined, in this  case, by DCOM [Division  of Coastal                                                               
and  Ocean  Management]  in   consultation  with  the  respective                                                               
agency. He noted that a  number of districts have been frustrated                                                               
by  that determination  process and  are seeking  to remove  that                                                               
particular language.                                                                                                            
                                                                                                                                
He explained  that with regard  to designated areas,  a community                                                               
can develop or  select a designated area  where local enforceable                                                               
policy can  apply. He noted  that a designated area  is important                                                               
because when an enforceable policy  is developed on a local level                                                               
it  becomes an  additional  set of  requirements  that a  project                                                               
sponsor or  developer has to meet  in order to move  forward with                                                               
that activity  in the  coastal zone. He  noted that  a designated                                                               
area does  not require a  local enforceable policy, but  it gives                                                               
the community  deference in the  consistency review  process even                                                               
when relying on the state's standards, rather than its own.                                                                     
                                                                                                                                
4:14:37 PM                                                                                                                    
CHAIR OLSON asked  how many designated areas  exist with approved                                                               
plans.                                                                                                                          
                                                                                                                                
MR.  BALASH replied  that  he believes  there  are two  districts                                                               
without  approved plans  and 70  percent of  the designated  area                                                               
requests were  approved in the  planning process. He said  he did                                                               
not  know  what that  number  is  but he  could  get  it for  the                                                               
committee.                                                                                                                      
                                                                                                                                
He explained that the maps  that reflect the designated areas are                                                               
an  important  part of  the  local  plan.  This is  because  it's                                                               
important for  individuals operating  in a  coastal zone  to know                                                               
whether they  are in  a designated area  and which  policies will                                                               
apply to their activity.                                                                                                        
                                                                                                                                
He  said  that  there  are  a number  of  overlapping  rules  and                                                               
guidelines  in statute;  within regulations  the particulars  get                                                               
more specific. Slide 5 was  a diagram of the District Enforceable                                                               
Policy Decision  Tree, which  was developed by  DCOM in  order to                                                               
assist communities in understanding  how these decisions are made                                                               
when a local  policy is brought forward. He  acknowledged that it                                                               
is difficult  to have a  local enforceable policy  approved under                                                               
the current  ACMP process. He  explained that part of  the reason                                                               
for this is because the ACMP  is only one part of a comprehensive                                                               
regulatory system  in the  state where a  number of  agencies are                                                               
already  protecting air,  water,  and resource  standards in  the                                                               
state.                                                                                                                          
                                                                                                                                
4:17:35 PM                                                                                                                    
MR. BALASH continued  that after a local plan  has been approved,                                                               
the application and implementation  of those policies comes next.                                                               
He explained that this occurs  only during the consistency review                                                               
process.  Coastal districts  receive implementation  funding from                                                               
the  federal government  as  part  of CZMA  in  order to  conduct                                                               
consistency reviews.                                                                                                            
                                                                                                                                
He noted that  costal districts are considered  to have expertise                                                               
in  the  interpretation  of  its plan.  He  explained  that  this                                                               
becomes important at a particular  stage of the review process in                                                               
the  event that  consensus does  not emerge  among the  reviewing                                                               
entities.  He  added that  coastal  districts  can comment  on  a                                                               
proposed project using its local plan or the state's standards.                                                                 
                                                                                                                                
Slide 7 laid  out the review process and how  it affects projects                                                               
and  activities.  He  reminded  the  committee  that  the  review                                                               
process involves  the applicant,  the affected  coastal district,                                                               
state and  federal agencies, and  the public. The  review process                                                               
is designed to  evaluate projects and protect  and manage coastal                                                               
uses and  resources, while addressing an  applicant's project. He                                                               
explained  that  this process  is  not  meant  to be  a  straight                                                               
forward "yes" or  "no" on whether a project should  occur or move                                                               
forward. He explained  that it's intended to  "massage" a project                                                               
in order  to get it  into compliance with the  coastal management                                                               
program at the beginning of the process.                                                                                        
                                                                                                                                
MR.  BALASH  went   over  the  review  process   steps  with  the                                                               
committee. The  first step is  to determine the  applicability of                                                               
ACMP to  a project. He explained  that if an activity  or project                                                               
is occurring in the coastal zone  in Alaska and requires state or                                                               
federal authorization  and it is  located in the coastal  zone on                                                               
federal lands or the outer  continental shelf (OCS) then ACMP may                                                               
apply.                                                                                                                          
                                                                                                                                
He continued  that after applicability has  been determined, DCOM                                                               
offers pre-review  assistance before the review  actually starts.                                                               
He explained that once an  application is complete, it is brought                                                               
into  DNR  and the  agency  has  to  have  all copies  of  permit                                                               
applications.                                                                                                                   
                                                                                                                                
He explained that  the information in the application  is used by                                                               
DCOM  to determine  the scope  of the  review. The  scope of  the                                                               
review is  determined by the type  of project. He noted  that the                                                               
scope of the project could  include low-impact activities as well                                                               
as major developments.                                                                                                          
                                                                                                                                
He  added  that the  coordinating  agency  is determined  by  the                                                               
activities involved. He  explained that more often  than not DCOM                                                               
is  the  coordinating  agency to  conduct  the  review;  however,                                                               
sometimes that is not the case.                                                                                                 
                                                                                                                                
4:24:14 PM                                                                                                                    
MR. BALASH  continued that  after the  scope is  determined, DCOM                                                               
prepares the notice  for public comment to be  published in three                                                               
public places.   Included in the notice is  information about the                                                               
project,  comment  deadlines and  any  milestones  dictated by  a                                                               
project. He  explained that  at the  end of  all of  these steps,                                                               
"Day 1" has started.                                                                                                            
                                                                                                                                
Day 1  begins the  review process.  He noted  that there  are two                                                               
types  of reviews:  a  30 day  review  and a  50  day review.  He                                                               
explained that  some of  the more  involved projects,  which have                                                               
certain  federal   authorizations,  require  the   longer  review                                                               
period.                                                                                                                         
                                                                                                                                
On  Day   13/25  review   participants  can   request  additional                                                               
information and  a designated area  within scope of  that review.                                                               
He gave an example of a designated area request.                                                                                
                                                                                                                                
Day 17/30 is the deadline for  public comments. He noted that all                                                               
of the  review participants  may submit  comments, which  must be                                                               
received by the deadline, in  writing, and include an explanation                                                               
on whether the participant concurs  with consistencies or if they                                                               
have considered  it to  be inconsistent.  He said  that if  it is                                                               
inconsistent, the  participant needs to identify  the enforceable                                                               
policies that the project is  inconsistent with, explain why, and                                                               
propose alternative. He noted that this is an important element.                                                                
                                                                                                                                
He  continued  that  after  the comment  period  has  ended  DCOM                                                               
collects and considers what those  comments reflect. He explained                                                               
that  regardless  of  whether  or   not  a  given  community  has                                                               
commented  or  has  an  approved   plan,  the  goal  is  to  find                                                               
consensus.  He noted  that in  the cases  where consensus  is not                                                               
clear in the  comments, DCOM can convene a hearing  in an attempt                                                               
to  resolve issues  and facilitate  some  dialogue. He  explained                                                               
that where  there are differences  the division attempts  to look                                                               
to and  provide deference to  the comments of the  local district                                                               
or  the  agency that  has  expertise  on  the  issue that  is  in                                                               
conflict.                                                                                                                       
                                                                                                                                
4:28:25 PM                                                                                                                    
MR. BALASH continued with his  presentation. He said on Day 24/44                                                               
DCOM proposes  a determination of consistency,  describes whether                                                               
or  not  consistency  has  been   achieved,  and,  if  not,  what                                                               
alternative  measures are  required by  the applicant  to achieve                                                               
consistency. He noted  that at this point the  applicant has some                                                               
options: adopt  the alternative measures, modify  the project, or                                                               
abandon the project and  withdraw their application. Additionally                                                               
at  Day  29/49  there  is   an  opportunity  for  a  decision  on                                                               
consistency to be  elevated to the commissioner of  DNR. This can                                                               
be  brought forward  by  the applicant  or  the effected  coastal                                                               
resource  district.  He  noted that  elevations  are  handled  as                                                               
quickly possible, however, the statutes  require completion in 45                                                               
days with a final decision determined  on day 30/50. He said that                                                               
expedited reviews  do exist  and are achieved  through a  list of                                                               
permits that are routine or  generally consistent with associated                                                               
activities in a given area (the "ABC list").                                                                                    
                                                                                                                                
He explained  that while the  administration is pleased  with the                                                               
program  and wants  to extend  it for  another six  years, it  is                                                               
understood that there is a desire  on the part of communities and                                                               
their legislators to  amend the statutes. He  explained that with                                                               
this in  mind, Commissioner Sullivan  [with DNR] worked  with the                                                               
governor to  develop some guiding  principles in order  to engage                                                               
constructively in the  legislative process. He said  that what is                                                               
important to  the administration,  and will guide  its engagement                                                               
and  decision making,  are  that a  predictable  process must  be                                                               
maintained  for  conducting  the consistency  reviews,  a  strong                                                               
state  program   must  be  maintained,  and   the  standards  and                                                               
enforceable policies  must remain objective and  cannot duplicate                                                               
or redefine existing authorities.  He said that coastal districts                                                               
should be  afforded a meaningful  role for input, but  should not                                                               
possess a veto decision over these projects.                                                                                    
                                                                                                                                
4:31:50 PM                                                                                                                    
GARY  WILLIAMS,  Coastal  District Coordinator,  Kenai  Peninsula                                                               
Borough,  explained  that the  borough  believes  ACMP serves  an                                                               
important role  in monitoring development  and could  become more                                                               
meaningful with  revised and improved  legislation. He  said that                                                               
the current model  needs to be reviewed in order  to make sure it                                                               
is  serving  the  best  interest  of  the  state,  its  political                                                               
subdivisions, and industry. He said  he believes that the program                                                               
can be enhanced with a few adjustments.                                                                                         
                                                                                                                                
He suggested that with regard  to enforceable policy, to focus on                                                               
AS 46.40. He said that  within this statute coastal districts are                                                               
disallowed  enforceable   policy  if  a  matter   is  "adequately                                                               
addressed"  in  state and  federal  law.  He explained  that  the                                                               
definition   of   "adequately   addressed",  in   the   borough's                                                               
experience, is  what DNR "says it  is" and it needs  to either be                                                               
removed or reworked.                                                                                                            
                                                                                                                                
He continued  that within  AS 46.40  many district  policies have                                                               
been disallowed because  the policy did not  "flow from" specific                                                               
state or  federal law. He  said that  the concept of  "flow from"                                                               
should  be  removed from  the  enforceable  policy evaluation  or                                                               
additionally  state that  if a  particular state  or federal  law                                                               
does not address a local  concern, which the local governing body                                                               
believes to be important, then the policy should be accepted.                                                                   
                                                                                                                                
He  said that,  finally,  AS  46.40 requires  that  if a  coastal                                                               
district  finds  that  a  specific  coastal  use  is  of  "unique                                                               
concern,"  it  must  be  demonstrated   through  local  usage  or                                                               
scientific   evidence.   He   explained   that   the   level   of                                                               
documentation  that  DNR  requires,  with  regard  of  scientific                                                               
evidence,  is  burdensome.  He  said that  this  term  is  highly                                                               
interpretable and he suggested that it be removed from statute.                                                                 
                                                                                                                                
He noted that  he will fax the committee  his complete discussion                                                               
for review at another time.                                                                                                     
                                                                                                                                
He  explained that  the administrative  code  that was  developed                                                               
following  the 2003  ACMP legislation  was more  restrictive than                                                               
what  statute   requires.  The  result  has   been  that  current                                                               
regulation severely  limits the ability for  coastal districts to                                                               
obtain policy  approval from DNR because  the statewide standards                                                               
have  narrowed or  eliminated the  purview  of coastal  districts                                                               
regarding certain coastal uses and resources, he said.                                                                          
                                                                                                                                
He stressed  that a few fixes  to the statute with  the regard to                                                               
administrative code  will help  make ACMP  more meaningful  as an                                                               
adjunct to  state agency oversight.  He encouraged the  Senate to                                                               
pass a six year extension to ACMP.                                                                                              
                                                                                                                                
4:36:31 PM                                                                                                                    
CHAIR OLSON asked if the  removal or reworking of the "adequately                                                               
addressed"  and  "unique  concern"  portions  of  AS  46.40  will                                                               
decrease  frustration   of  districts   whose  plans   are  being                                                               
rejected.                                                                                                                       
                                                                                                                                
MR. WILLIAMS  replied that he believes  so and that it  will also                                                               
help  DNR. He  explained that  it  is a  win-win for  DNR in  its                                                               
ability  to  try  to  help districts  create  policies  that  are                                                               
consistent with state law and  will help districts understand why                                                               
it may not get a policy.                                                                                                        
                                                                                                                                
CHAIR OLSON  asked what  his thoughts  are in  reestablishing the                                                               
policy council that was eliminated in 2003.                                                                                     
                                                                                                                                
MR. WILLIAMS replied  that he is hopeful that the  council can be                                                               
reestablished. He  explained that it  has been difficult  to work                                                               
with  an agency  that both  writes and  interprets the  rules. He                                                               
said that  having a  policy board that  helps mediate  the issues                                                               
for both sides would be a great adjunct to the program.                                                                         
                                                                                                                                
4:38:40 PM                                                                                                                    
TOM  LOHMAN,  Attorney, North  Slope  Borough,  stressed that  he                                                               
believes the state's  long-term best interests are  served by the                                                               
continuation  and  amendment of  the  current  ACMP in  order  to                                                               
restore a meaningful  role in the program  for coastal districts.                                                               
He  explained  that  it  is  important  to  dispel  some  of  the                                                               
persistent myths  that surround ACMP  in order to  seek important                                                               
and necessary  changes after the  crippling amendments  that were                                                               
adopted in 2003.                                                                                                                
                                                                                                                                
He  explained  that,  first, the  constituents  that  legislators                                                               
represent  are not  anti-development  and ACMP  is  not an  anti-                                                               
development program.  He noted that  districts have  never sought                                                               
veto-authority  over  development  projects; nor  have  districts                                                               
tried to  usurp state  or federal authority  or impinge  upon the                                                               
separation of  powers between branches  or levels  of government.                                                               
He said  that there are  no facts to back  up any of  these false                                                               
claims,  despite  these  myths   being  repeated  at  legislative                                                               
hearings.  He  stressed  that  the  North  Slope  Borough  is  as                                                               
dependent on a healthy oil and gas  industry as the state is as a                                                               
whole, in  order to maintain  quality of  life of the  people and                                                               
provide  essential provisions  to  the  community. He  emphasized                                                               
that  ACMP  could be  a  development  program, which  provides  a                                                               
meaningful role  for communities in a  coordinated project review                                                               
process. He said  the only thing districts want is  to be able to                                                               
work with  project applicants and agencies  and influence project                                                               
designs that draw on local  expertise and address local concerns.                                                               
He opined that  an ACMP which reflects a  partnership between the                                                               
centralized state  government and  the communities  across Alaska                                                               
would  enhance the  likelihood that  projects would  be permitted                                                               
more smoothly. He noted that  a common theme districts have heard                                                               
recently from  the state administration is  that federal decision                                                               
makers  should not  impose its  will with  respect to  actions in                                                               
Alaska. He  said "all  we're asking  for is  the same  measure of                                                               
respect from  our state government  that our state  government is                                                               
demanding from the federal government."                                                                                         
                                                                                                                                
He  concluded  by  addressing  some   of  the  topics  that  were                                                               
discussed in earlier  testimony and that DNR has  testified on in                                                               
other  forum. He  explained that,  first, it  has been  said that                                                               
statewide  subsistence  standard  requires that  projects  avoid,                                                               
minimize, or  mitigate impacts to subsistence.  He explained that                                                               
this is  not exactly  true. The  statewide standard  doesn't give                                                               
alternative measures  for mitigation.  This is a  problem because                                                               
it means  that an action  must be either approved  or disapproved                                                               
and districts can't have the  policies that it would like because                                                               
of this. He said that he thinks  this is where the idea of "veto"                                                               
comes from.  He gave  an example  of some  policies in  the North                                                               
Slope Borough  that were  rejected by the  state because  it used                                                               
language to either allow or disallow certain activities.                                                                        
                                                                                                                                
He  continued that,  second,  it  has been  stated  that an  area                                                               
designation  is  not  needed  in order  to  consider  impacts  to                                                               
subsistence. He  explained that this isn't  true; the subsistence                                                               
standard only applies if it is on an approved designated area.                                                                  
                                                                                                                                
He  said  that,  third,  there   has  been  testimony  that  what                                                               
districts  have perceived  as ever-changing  standards and  rules                                                               
throughout the last  eight years have not really  been changes in                                                               
standards, but merely more specific  provisions by DNR. He argued                                                               
that is also not true.                                                                                                          
                                                                                                                                
4:43:55 PM                                                                                                                    
MR.  LOHMAN said  that DNR  has acknowledged  that an  unintended                                                               
consequence  arose from  the inability  to  make designations  on                                                               
federal  lands and  waters.  He explained  that  the North  Slope                                                               
Borough is  unable to apply  subsistence policies in  places such                                                               
as  the NPRA  [National Petroleum  Reserve, Alaska]  and the  OCS                                                               
[Outer Continental Shelf] because of  this. He explained that the                                                               
borough   has  effectively   been   closed   out  from   crafting                                                               
subsistence policies  in the areas  that are of  greatest concern                                                               
for the North Slope.                                                                                                            
                                                                                                                                
He  continued that  Mr.  Balash also  cited  the opportunity  for                                                               
districts to  designate areas on the  fly during the review  as a                                                               
positive aspect  of the  current program. He  said that,  to him,                                                               
this seems to  "fly in the face" of industry  concerns and one of                                                               
DNR's  guiding principles  for engagement:  that  the program  is                                                               
predictable and standards are clear upfront.                                                                                    
                                                                                                                                
Finally,  he  said  that the  administration  and  many  industry                                                               
representatives, who  have commented on  this issue,  have argued                                                               
that  the  six years  embodied  in  the  bill introduced  by  the                                                               
governor  this  year   are  needed  in  order   to  have  careful                                                               
stakeholder  deliberation  to  identify  appropriate  changes  to                                                               
ACMP.  He explained  that this  is frustrating  to hear,  because                                                               
districts  have, over  the past  eight years,  engaged and  spent                                                               
enormous  amounts  of  money  and  staff  time  participating  in                                                               
workshops,   multi-stakeholder  meetings,   program  reevaluation                                                               
meetings, a federal  review of the program,  a legislative audit,                                                               
and many hearings  on ACMP. He suggested that the  time is now to                                                               
fix this program.                                                                                                               
                                                                                                                                
4:46:34 PM                                                                                                                    
CHAIR OLSON asked if the legislature  and the governor come to an                                                               
impasse and the  program is allowed to sunset,  what his thoughts                                                               
are.                                                                                                                            
                                                                                                                                
MR. LOHMAN  replied that he  believes the North Slope's  mayor is                                                               
on  record stating  that  if the  program  remains unchanged  the                                                               
district has nothing to lose since  it doesn't have a local plan.                                                               
He  noted  that  the  idea   that  deference  is  paid  to  local                                                               
communities  may   be  the  case   elsewhere,  but  he   has  not                                                               
experienced  it  with  regard  to the  North  Slope  Borough.  He                                                               
explained that the district has  conducted three elevations since                                                               
the 2003 amendments  and in each case not only  were the views of                                                               
the borough not adopted, but  were paid virtually no attention in                                                               
the  final decision  of the  commissioner  [of DNR].  He gave  an                                                               
example of  how ACMP,  if changed, could  assist the  district in                                                               
coordinating its  reviews and concerns on  development issues, in                                                               
order to expedite project permitting.                                                                                           
                                                                                                                                
4:49:06 PM                                                                                                                    
CHAIR OLSON asked  what the minimum changes are which  need to be                                                               
done  in order  to make  this program  acceptable to  individuals                                                               
throughout the state.                                                                                                           
                                                                                                                                
MR.  LOHMAN  replied that  getting  rid  of the  designated  area                                                               
requirement, which  has costs  districts an  extraordinary amount                                                               
of money. He  explained that the North Slope Borough  had no idea                                                               
that the process would be so  difficult or expensive and does not                                                               
accomplish the goals intended. He  continued that doing away with                                                               
the "adequately  addressed" and "flow-from" requirements  is also                                                               
important.                                                                                                                      
                                                                                                                                
He  said that  bringing  back something  similar  to the  Coastal                                                               
Policy  Council (CPC),  which existed  prior to  2003 would  be a                                                               
very positive step.  He acknowledged that there  were some issues                                                               
with the  previous CPC, but  recent discussions have  addressed a                                                               
somewhat different makeup.                                                                                                      
                                                                                                                                
CHAIR OLSON  asked what kind of  makeup of the policy  council he                                                               
would like to see. He noted  that previously the members had been                                                               
mainly governor designees.                                                                                                      
                                                                                                                                
MR. LOHMAN  replied that  before 2003, the  CPC was  "stacked" in                                                               
favor  of the  local  communities, with  local elected  officials                                                               
from  nine regions  of the  states and  five state  officials. He                                                               
explained that  the problem  with that system  was that  it often                                                               
included  elected  officials  who  did  not  have  the  necessary                                                               
expertise  on  various  projects  in their  own  area  and  other                                                               
districts.  He   said  a   combination  of   representation  from                                                               
districts,  state  agencies,  and possibly  other  stake  holders                                                               
would  provide  a  balanced  review for  the  approval  of  local                                                               
district plans and policies.                                                                                                    
                                                                                                                                
CHAIR OLSON asked  whether he is more optimistic  that issues can                                                               
be worked out with the new commissioner of DNR coming on board.                                                                 
                                                                                                                                
MR. LOHMAN  replied that  he has  great respect  for Commissioner                                                               
Sullivan and there are  a lot of good people who  work at DNR and                                                               
DCOM. He  added that  after eight years  of work  identifying the                                                               
concerns of  districts the pieces  are in place to  move forward.                                                               
He  reiterated  that  communities  are not  trying  to  halt  the                                                               
economy of  the state. He  pointed out  that Randy Bates  in DCOM                                                               
knows this program "better than anybody,  and he knows how to fix                                                               
it better than anybody."                                                                                                        
                                                                                                                                
4:53:42 PM                                                                                                                    
KATHY  WASSERMAN, Executive  Director,  Alaska Municipal  League,                                                               
stated support  for the extension  of ACMP. She said  the program                                                               
has been  the cornerstone for many  municipalities throughout the                                                               
years. Prior  to 2003 she said  "we did not realize  that we were                                                               
actually  a  part  of  what the  administration  might  call  the                                                               
instability of  the program."  She stressed  that this  isn't the                                                               
intent of most municipalities.                                                                                                  
                                                                                                                                
She  said that  with  regard  to the  sunset,  ACMP  is the  only                                                               
program that provides financial  assistance to municipalities and                                                               
coastal  districts  and  includes  a  regulatory  framework  that                                                               
allows districts to have a "seat  at the table" in the management                                                               
decisions that affect coastal zones.   She said as municipalities                                                               
and  districts "why  would we  not want  to have  a seat  at that                                                               
table?"                                                                                                                         
                                                                                                                                
She said most municipalities and  districts have lost most of its                                                               
own enforceable  policies and have  been left with ones  that are                                                               
so limiting  that the  policies are  ineffective. She  noted that                                                               
this is the cornerstone of the program itself.                                                                                  
                                                                                                                                
She  continued that  another issue  that the  Alaska Municipality                                                               
League has is the Department  of Environmental Conservation (DEC)                                                               
carve-out.  She explained  that  not  permitting any  enforceable                                                               
policies  or comments  that relate  to air  or water  quality has                                                               
virtually  eliminated most  of  the  meaningful participation  in                                                               
ACMP,  since almost  all  coastal  uses relate  to  air or  water                                                               
quality.   DEC,   as   a  rule,   does   not   communicate   with                                                               
municipalities and  coastal districts  and the  department should                                                               
be brought back into the ACMP review process.                                                                                   
                                                                                                                                
4:55:45 PM                                                                                                                    
MS. WASSERMAN said  that requiring any physical  area, subject to                                                               
either subsistence  or habitat enforceable policy,  which must be                                                               
pre-designated before  any impacts  to coastal resources  or uses                                                               
can  be  considered,  ignores  the  reality  that  resources  and                                                               
habitats occur throughout the entire  coastal area, many of which                                                               
are  migratory.  She  stressed that  this  regulation  should  be                                                               
eliminated.                                                                                                                     
                                                                                                                                
She said  that another issue  is consultants. She  explained that                                                               
DCOM  has  a   policy  of  not  allowing   coastal  districts  or                                                               
municipalities  to hire  consultants  to  assist local  districts                                                               
using the [Section] 306 funding.  She emphasized that this should                                                               
be a local  decision, and should not  be an issue so  long as the                                                               
work required by the state is completed.                                                                                        
                                                                                                                                
She  said  that  municipalities  and  districts  that  choose  to                                                               
participate  is  this  program   have  always  tried  to  balance                                                               
responsible  development  with  the  protection  of  the  coastal                                                               
environment.  She  explained  that municipalities  are  eager  to                                                               
return  to  the  table  and  participate  in  a  reenergized  and                                                               
coordinated  review  process,  which  has  been  lost  since  the                                                               
"streamlined ACMP process" was implemented.                                                                                     
                                                                                                                                
She   expressed  surprise   that  so   many  people   think  that                                                               
municipalities  want  to stop  development.  The  more rural  the                                                               
community, the  more interest there  is for development  in order                                                               
for those  communities to  survive. She  said that  it is  just a                                                               
matter of  being at  the table  and part  of the  discussion. She                                                               
added that municipalities  and districts have never  asked for or                                                               
requested veto power.                                                                                                           
                                                                                                                                
4:58:37 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Olson adjourned the meeting at 4:58 p.m.                                                                                  

Document Name Date/Time Subjects