HOUSE BILL NO. 192 "An Act designating the Department of Natural Resources as lead agency for resource development projects; making conforming amendments; and providing for an effective date." TOM IRWIN, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES testified in support of the bill and provided information. He stressed his support of the Governor's priority to develop natural resources. He highlighted the intention of the legislation to lead and coordinate the operations only, and not to take authority away from the other Departments. He read from prepared testimony as follows: The purpose of this bill is to help facilitate and expedite resource development in Alaska. This bill would specifically provide the Commissioner of the Department of Natural Resources with statutory authority under AS 38.05.020(b) to lead and coordinate all matters relating to the state's review and authorization of resource development projects. As the state focuses more on development of its resources the department needs clear and explicit authority to carry out its role to lead and coordinate the state's review and authorization of resource development projects. Even though the department has and will continue to serve as lead for mining projects, the department's authority to serve as lead agency for other resource development projects is not as explicit. This bill will provide the necessary clarity as the state moves forward in the development of its resources. The primary responsibility in the Department of Natural Resources for carrying out lead agency coordination functions will rest with the Office of Project Management and Permitting. This new Office within the department includes the project management function and the Alaska Coastal Zone Management program. Large resource development projects, because of their scope and complexity, are more efficiently reviewed and authorized using a lead agency to coordinate and integrate, to the extent possible, the various permitting processes of the agencies involved using the project team approach. Smaller projects, normally less complex and requiring fewer permits, may benefit from lead agency coordination for review but may not require the establishment of a project team. Resource development projects utilizing the lead coordinating agency and project review team approach will go through a three phase process. Phase I focuses on evaluating a proposed project to determine if the lead agency project team approach would best address the review and permitting needs of the project. Phase II results in establishment of the project team, development of an integrated agency review schedule, delineation of information requirements, and completion of any necessary agreements amongst the agencies and applicant. Phase III is the actual project review and authorization process, including public participation, tailored specifically to the requirements for permitting the project. Additionally, we view this bill as assisting in our efforts to streamline project review and authorization. This bill will help to facilitate: The state's ability to pull together agencies to address project specific concerns, and to facilitate and expedite the review and authorization process; a more cohesive working relationship amongst agency representatives; better communication, more efficient permitting, consolidated public process where possible, and to assist in integrating the state's process with that of the federal agencies. Speaking from personal experience, the laws governing resource development have proliferated, and there are now more agencies than ever with permitting authority over resource development projects. Resource development should not be held up by the sheer complexity of government. This bill is intended to help alleviate that problem as this bill would authorize DNR to lead and coordinate the permitting activities of all agencies with jurisdiction over the project. Commissioner Irwin noted that in effect all operations would be brought into one office to facilitate coordination. ERNESTA BALLARD, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL CONSERVATION expressed support of the bill. She referred to her prepared statement: Governor Murkowski is committed to enhancing Alaska's economy through resource development. He is equally committed to protecting Alaska's environment. A strong economy will generate the revenue base to continue funding our important regulatory and development projects. Without a strong economy we cannot hope to have a strong government. I have been before this committee to speak on behalf of other governor's bills and have opened with that same message. It is a fundamental principle to this administration and bears repeating. In any undertaking, be it your home, your office, a small business or a large complex organization like state government - critical path planning is fundamental; with out it time is wasted. This bill, HB 192, is about critical path planning. It directs the Department of Natural Resources to lead and coordinate resource development projects. It directs the permitting agencies to sequence actions and requirements so time lines are met. Armed with sequenced and prioritized project plans we can insure that each of our own department's permitting requirements are met without delay The genesis of this bill goes back several years. The resource agencies came together to coordinate permitting issues on large mine projects. They discussed, planned and communicated, and found that the permitting process became more efficient. It was not only more efficient for the agencies; it was more productive for industry. Why? Because, we, the permitting agencies, identified our regulatory requirements in a systematic and sequenced manner insuring that the most critical needs and timelines for the project were established. Because we, DNR, Fish and Game and DEC had identified and articulated the critical points and times in our regulatory processes, industry understood its responsibilities and provided the needed information on time. Additionally by evaluating its regulatory responsibilities as a whole industry can gain what synergies are possible. Critical path planning provides efficiencies for the departments as well. We hold joint meetings. We use staff resources efficiently. Industry provides information we can all use because we agreed, at the outset, on data standards acceptable to all. The state's citizens benefit from this approach. In rural communities it is more difficult to track separate agency processes so when agencies hold joint public meetings concerned citizens are given the entire regulatory picture. With out critical path planning, public participation happens based in the public notice requirement of individual permits, which can be months even years apart depending on the project. I have also talked with many of you about how we are reviewing our regulations and statutes to ensure they are meaningful and not a victim of mission creep. As part of that process, we are deleting 46.35 Permit Coordination and Extension. This statute was enacted in 1977. That same year the legislature established the Coastal Management Program, which became the permit coordinator. AS 46.35 has become a relict. However there is one small section of AS 46.35 that is being relocated. Sections 2 and 3 of this bill move the Department of Environmental Conservation's authority to use our appeals process to other sections of law. The DEC process is easier to use and well laid out in understandable regulations. It is also important to understand what HB 192 does not do. HB 192 bill does not change the protective standards that the state has developed and fine-tuned over the last decade. It does not change the Department of Environmental Conservation's permitting requirements, its regulatory discretion, enforcement or appeal process. This bill simply insures critical path planning. Commissioner Ballard summarized that the bill provided the opportunity to be more organized. She noted that, as the permitting agency, DEC benefited from identifying at the outset key data requirements needed to produce permits in a timely fashion. She stressed that having clear legislative language provides the agency with a clear mandate in the permitting project. Ms. Ballard emphasized the importance of critical path planning. By moving permits and the project forward in a coordinated way, the department is able to effectively use resources and to present to the public the entire project as it moves forward. Otherwise, the public may only view portions of the projects and may not be able to understand its impact on their community. She noted her commitment to both resource development and resource conservation and her belief that they are compatible. She also noted her determination to identify instances of "mission creep". Ms. Ballard explained that, resulting from a review of statutes and in conjunction with HB 192, the Department is deleting AS 46.35, "permit coordination and extension". She stated that the statute had never been used since its enactment in 1977, the same year that the legislature established the Coastal Management Program, which became the permit coordinator. She noted that they had proposed a relocation of a small segment of the statute: Section 2 & 3, which would move DEC's authority to use the appeals process to other sections of law. Ms. Ballard expressed her enthusiasm for this type of coordination, and reiterated the importance of coordinating the permitting process to provide a clear path for resource development. Representative Croft asked if AS 46.35 had ever been used. Ms. Ballard confirmed that it had never been used. She noted that they retained the authority to use their own appeals process. CAMERON LEONARDS, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW, in response to a question by Representative Croft, explained that two provisions of 46.35 would remain in statute following the proposed bill, one of which would be relocated from 46.35.090 (e). The relocated language clarifies that procedures to review DEC permit decisions need not conform to the Administrative Procedure Act (APA). He explained that sections 2 and 3 of the bill simply transplanted this existing provision to two chapters of Title 46 that govern DEC permitting decisions. Representative Croft asked which provisions did not need to conform to APA and why. Mr. Leonard noted that the procedures governing adjudication hearings were already covered comprehensively in DEC regulations and by existing law were not subject to the APA. He confirmed that this paralleled APA procedures. Representative Foster MOVED to report HB 192 out of Committee with the accompanying fiscal note. There being NO OBJECTION it was so ordered. HB 192 was REPORTED out of Committee with a "do pass" recommendation and two zero fiscal notes: #1 from Department of Natural Resources and #2 from Department of Environmental Conservation.