SB 148-KACHEMAK BAY CRITICAL HABITAT AREA  5:19:49 PM CHAIR GIESSEL announced SB 148 to be up for consideration. SENATOR MICCICHE, sponsor of SB 148, explained that this bill amends AS 16.20.590 by exempting the Homer Port and Harbor and a small area that is planned for future harbor and deep water dock expansion from the Kachemak Bay Critical Habitat Area (KBCHA). It cleans up the language of the management plan that says the plan does not apply to municipal harbors within the critical boundary area. However, the statutory boundary excluded the harbor, so they listed the statutory boundary. Amending the boundary allows normal maintenance work in the harbor without requiring expensive and potentially time- consuming permitting from Alaska Department of Fish and Game (ADF&G). He said that this permitting would not be necessary if the management plan and the statutory boundary matched, which they will through this action. 5:21:39 PM Homer projects impacted by permitting requirements in the past have been ramp replacement, float replacement, Pioneer Dock construction, and deep water dock fender replacement. SENATOR MICCICHE said the primary reason they are asking for this - because the Homer Harbor provides a secure environmentally responsible place to store and maintain vessels that support the oil and gas industry in Cook Inlet. He said SB 148 is important to his district and to Homer, but also important to Southcentral Alaska and the Interior in places like Fairbanks, because it helps provide a safe harbor to support the natural gas exploration and production in north Cook Inlet. It certainly gives an increased potential to distribute natural gas to rural Alaskans outside of that area. 5:22:38 PM CHAIR GIESSEL noted a zero fiscal note and a copy of the management plan that said drilling rig storage will not be allowed in Kachemak Bay Critical Habitat Area, possibly the section he wanted to correct. SENATOR MICCICHE said that was correct, and he added that he had checked with the agencies and local NGO's to make sure they supported it and he heard that they recognize the harbor as a safe location for this type of activity and were not opposing the bill. 5:23:55 PM CYNTHIA BIRKHIMER, Kachemak Bay Conservation Society (KBCS), Homer, Alaska, said they understand the reason for this request, and it appears that including these areas within the critical habitat area (CHA) could have been a simple oversight. They support this action on its face, but have some concerns about details of the wording. Concerns are about the size of area requested to be removed and she asked that it specifically exclude any and all oil and gas, mineral exploration, and development activities from within the confines of the newly removed land. They ask that this area be specifically designated within the bill to allow harbor industry-specific operations such as vessel moorage, storage, and freight transfer. She believed this could be the first action to remove designated lands from within a CHA in the state and was concerned that it will set a precedent for this type of undesignated land actions especially with regard to resource development interests within the boundaries of a CHA. MS. BIRKHIMER said at the present time the Parnell administration is openly working to undermine the existing management process of state CHAs, game refuges, and wildlife sanctuaries through the application of Administrative Order (AO) 266. This action looks suspect and could make the KBCHA vulnerable to future incursions. Their concerns are for the long term protection of the local area encompassed by the KBCHA, and to this end she requested specific sections of the City Homer resolution 14-005 be incorporated into the wording of SB 148 as follows: 5:27:10 PM Lines 62-65: Whereas, the City of Homer has deep appreciation for the Critical Habitat Designation and the adopted Management Plan because it protects the resources which provide the very foundation of the local economy, lifestyle and quality of life; and Line 74-75: Whereas, the City stipulates it does not propose or support any other amendments to the Kachemak Bay Critical Habitat Are or Plan as part of this request. SENATOR FAIRCLOUGH asked if she was speaking on behalf of the organization, which means they have taken a formal vote, and how many members her organization has. 5:28:27 PM MS. BIRKHIMER said she represents KBCS has 100 members and the board has seven members. 5:29:11 PM WALT WREDE, Manager, City of Homer, Homer, Alaska, said he strongly supported SB 148. He said they have a resolution from the City Council which was adopted unanimously. This bill is simple; it just carves the port and harbor area out of the CHA where it was never intended to be. This has caused a conflict between the CHA plan and the statutes. Passing this has a number of benefits: it resolves a conflict with statute and the CHA plan with respect to municipal lands and the port and harbor area. It will make permitting easier are the regulatory environment much better for ADF&G allowing them to solve some of the ambiguities they are faced with now. He said this legislation would solve some long standing problems they have been dealing with for decades including a requirement in the plan that any vessel that anchors over 14 days needs to get a permit from the ADF&G. The port of Homer is very busy and this is a very impractical requirement. They have also seen a lot of permitting delays and extra costs as a result of being included in the CHA; sometimes this includes even routine maintenance like replacing and repairing floats in the harbor. 5:31:19 PM Finally, Mr. Wrede said, what really brought this to light was whether or not the department could permit oil and gas drilling rigs to be docked at the deep water dock for routine maintenance, repair. They want to allow that, because Homer is an ice-free, deep-water port that has many resources that could be of service to the industry, and oil and gas drilling is ramping up quite a bit in the Cook Inlet. From an environmental point of view this is the safest place for those vessels to be when they need to be tied up and repaired. 5:32:14 PM RANDY BATES, Director, Division of Habitat, Alaska Department of Fish and Game (ADF&G), said he would answer questions on SB 148. CHAIR GIESSEL asked how many permits the department processes for the vessels that are docked there for over 14 days. MR. BATES replied that within the last five years they have processed a total of 150 permits for the KBCHA; 29 of them have been within the area described in SB 148. CHAIR GIESSEL, finding no further discussion, closed public testimony. 5:34:42 PM SENATOR DYSON moved to report SB 148 from committee to the next committee of referral with attached fiscal notes and individual recommendations. There were no objections and it was so ordered.