SENATE CS FOR CS FOR HOUSE BILL NO. 421(RES) "An Act relating to requiring the Department of Natural Resources to develop and maintain a standardized procedure for processing applications and issuing permits, authorizations, and certifications under the Alaska Water Use Act and to make a record of those items and amendments and orders affecting them available on the Internet." This was the second hearing for this bill in the Senate Finance Committee. Senator Leman spoke to a draft amendment [not on file]. He reminded the Committee that in May 2001, during the final days of the first session of the Twenty-Second Alaska State Legislature, HB 185 was passed, which amended the Alaska Water Use Act. He recalled concerns were raised during debate on that legislation relating to "major public policy questions" about the operation of the Water Management Program within the Department of Natural Resources. Because of these concerns, he continued, HB 185 included a one-year sunset provision on the Department's authorization for temporary water use activities. In addition, he noted the Legislature provided additional funding to the Department to expedite the water appropriations process and "clean up the incredibly long backlog of applications". Senator Leman informed that one year later, the application backlog remains and that "very few of the public interest policy questions have been addressed." He shared that a finding issued by the Division of Legislative Legal and Research Services cautions that in the absence of addressing the public policy issues, the programs are "treading on thin ice". As a result, he stated he sponsored an amendment to HB 421, although he did not intend for the suggested changes to place a burden on industry and cause delay in the issuance of temporary water use permits. He suggested a misunderstanding could be the cause of the opposition to his proposal. Senator Leman asserted, "The Department's approach to temporary water use must be legally defensible, avoid unnecessary delays and the public interest must be protected." He expressed concern that without an amendment to the Alaska Water Use Act, the possibility of "legitimate" legal challenges remains. Senator Leman stated that because of the limited time remaining in the current legislative session and because of opposition from the Department of Natural Resources and private parties that would be adversely impacted, he would not offer the amendment. Amendment #1: This amendment deletes the following language from page 1, line 13, through page 2, line 5 of the Senate Resources committee substitute. …shall ensure that all permits for water withdrawal are invalid unless the applicant complies with applicable requirements of AS 16.05.870; and shall make the record of applications, including temporary water use applications under AS 46.15.155 that have been accepted as complete, authorizations, permits, certificates, amendments, and orders affecting them available to the public on the Internet; This amendment also replaces the deleted language with the following. …shall require that temporary water use authorizations are valid only to the extent that the water withdrawal and use complies with applicable requirements of AS 16.05.870; and shall make the record of applications, including temporary water use applications under AS 16.15.155 that have been accepted them available to the public on the Internet; Senator Leman moved for adoption, noting that Senator Rick Halford and the Department support this amendment, and that Co-Chair Kelly discussed the implications with potential applicants for temporary water use permits. Co-Chair Kelly objected for the purpose of discussion. RON SOMMERVILLE, Resource Consultant to the House of Representatives and the Senate Majorities, explained this amendment was drafted as a result of concerns raised by the Legislature's legal advisors and by temporary water use permit applicants. He stated that language adopted by the Senate Resources Committee would require the Department to "enforce another agency's law" related to the Anadromous Fish Act [this agency is not specified]. He recalled comments made by Senator Hoffman about parties receiving water use authorization, assuming they had no further regulatory obligation, and utilizing the water without knowledge they were violating requirements of the Anadromous Fish Act. As a result, he said, Amendment #1 directs the two departments to work closely on this matter to ensure that applicants are aware of their responsibilities. Senator Olson asked if this amendment would assist in reducing the application backlog. Mr. Sommerville responded it would not affect the backlog. Co-Chair Kelly removed his objection to adoption of the amendment. Without objection the amendment was ADOPTED. Co-Chair Kelly reminded there was discussion about amending the fiscal note during the previous hearing on this bill. JENNIFER YUHAS, Staff to Representative Masek, Chair of the House Resources Committee, relayed the sponsor's assertion that the $200,000 appropriated for the current fiscal year is sufficient to implement this legislation. Co-Chair Donley moved to adopt a replacement zero fiscal note for the Department of Natural Resources. Senator Hoffman directed attention to the contractual services component of the fiscal note and asked if services were to be contracted out or how the functions would be performed if additional positions were not funded. Co-Chair Kelly responded that $300,000 was appropriated to the Department the previous session for the purpose of addressing the application backlog. Senator Hoffman asked if that appropriation was for contractual services. Ms. Yuhas informed the $300,000 appropriation was made to the Department with the intent it would be used to hire additional staff to address the backlog. She reiterated the sponsor's opinion that that this amount is adequate. Senator Hoffman suggested that if the Department does not have the necessary expertise to implement this legislation, it would be necessary to contract for outside assistance, which would decrease the amount of funds available to hire staff to address the backlog. Ms. Yuhas stated the Department has made this argument, although the hiring of additional staff to address the backlog is not complete and thus the funds appropriated for the current fiscal year have not been utilized. Senator Hoffman asserted that if the amount of the backlog is not reduced to the Legislature's expectation, the Legislature is to blame for imposing additional expenditure requirements. Senator Leman informed that $50,000 of the original appropriation remains, which could lapse. He expressed intent that the Department "hire aggressively" to fill the positions. Co-Chair Kelly suggested the FY 03 Operating Budget Conference Committee could reappropriate the lapsing funds to contractual services. Senator Hoffman clarified he did not object to adoption of the amendment, but emphasized it could adversely impact the reduction to the backlog. There was no objection and the Committee ADOPTED a new zero fiscal note for the Department of Natural Resources. Senator Leman "moved to report House Bill 421 as amended from Committee with individual recommendations and the accompanying Senate Finance fiscal note." Without objection CS SB 421 (FIN) MOVED from Committee with zero fiscal note written by the Senate Finance Committee for the Department of Natural Resources.