SB 361-PERMIT COORDINATION & COASTAL ZONE MGMT CHAIRMAN THERRIAULT announced that the committee would now take up SB 361. CHAIRMAN THERRIAULT, sponsor of SB 361, said that his intention was solely to introduce the bill; he didn't expect final action this year. He said that the regulators and the regulated felt that the regulatory system that had come together over the years was cumbersome in areas. He pointed out that there were processes that were not coordinated amongst state agencies and there was some duplication in the processes. The problems had been dealt with over the years through a piece-meal system. He thought that it was time for the Legislature to look at the entire system and see if it was time to start from scratch and put together a better-coordinated system. He has been involved in this overall issue for a number of years and has talked to division directors and commissioners and found that there is a lot of interest from state employees that the Legislature look at changes. The Governor introduced a bill a few years ago that was used as a basis for SB 361. He doesn't propose that this is a perfect bill at this stage. He wanted to get some input from the state agencies, the regulated communities and the citizen watchdogs as to what was beneficial in the bill and what areas of the bill might have pitfalls so that he can work on the bill with those groups during the interim. He announced that he wanted to aim for better coordination amongst the agencies so that an appellant who is appealing one issue didn't have different appeal timelines in different agencies. He wants to create a more streamlined and uniform permitting system. MS. MARTY RUTHERFORD, Deputy Commissioner of the Department of Natural Resources (DNR), said that Pat Galvin would be the lead spokesperson for the State. MR. PATRICK GALVIN, Director of Division of Governmental Coordination in the Office of the Governor, said his division is responsible for the implementation of the Alaska Coastal Management Program. SB 361 is very similar to SB 186, which was introduced at the Governor's request in 1997. They are looking for an efficient decision making process that eliminates obstacles to development while allowing the public to influence those decisions, provides for easier and fewer applications, allows coordinated review of all agency permit requirements for a particular project, consolidates public notices and provides for a more efficient appeal process. In September 1997 after the Governor's bill was introduced, the Administration had a streamlining workshop with participants from industries, conservation groups, local governments and state agencies to talk about the principles in the context of the bill that was in front of the Legislature at that time. A majority of the group agreed that these were important issues that needed work, but could not agree on an approach to achieve them. Although the bill didn't move through the Legislature, the Administration has since continued to look at ways to achieve the goals without legislation. MR. GALVIN said they looked at ways in which the individual agencies can better use the general permitting process and other such vehicles to concentrate the efforts of permitters and the public on those projects that have the greatest impact or occur in the most sensitive locations. They have undertaken a variety of projects to improve and simplify the permit applications, including increasing the use of the Internet. They have also increased the level of coordination of the agencies in the public notice process. In the area of coastal management, they have drafted guidance to staff on process-related issues to improve the level of permit coordination that occurs in the consistency review process. They are in the final stages of a revision to the coastal management consistency review regulations to provide for more efficient coordination in the process. There are also more specific things they have done. He said while they've made progress in the past few years, they recognize that there is still a lot of room for improvement. They believe this is a timely issue, but given the amount of time left in the Session and the complexity of the issues involved, they agree that it's not reasonable to expect a solution in the next few weeks. He wanted to point out a few areas of concern in SB 361. There is a lack of specificity regarding the authority of the coordinating agency in relation to the permitting agencies. This is particularly troublesome in the non-coastal areas where the coordinated approach hasn't been used before. It will raise an issue when the coordinating agency doesn't have a decision to make on its own and they are only doing the administrative process in coordinating the decisions of the other agencies. This may cause a problem when some of the permit decisions conflict with each other. Currently, through the consistency review process, they have a common set of guidelines that they can use to resolve the disputes. The current bill may create an undue burden on smaller projects by the need for project-specific negotiations with regard to some timelines that may not be necessary for smaller projects. There is a lack of specificity in the bill regarding timelines and time requirements. The timeline that is designed to satisfy the aims of the bill might interfere with other statutory requirements. The bill limits the role of coastal districts and local governments as compared to the current process in the Coastal Management Program. He noted that there would be a fiscal impact in bringing the coordinating review outside of the coastal zone because the work has never been done before. CHAIRMAN THERRIAULT asked if DNR was acting as a lead agency on large mining projects. If so, there had been some experience. MR. GALVIN affirmed that a handful of large mining projects have gone through a coordinated review outside of the coastal zone. They were referring to the rest of the projects, which have not gone through a coordinated review. The section dealing with administrative appeals needs some specificity with regard to who decides the issue when there are multiple permits that might be implicated by an appeal. They are encouraged to hear that both leading major party gubernatorial candidates have expressed an interest in resolving this issue and the Division would like to work with the Committee during the interim and encouraged participation of the other major stakeholders, such as local governments, project applicants, conservation groups and tribes. CHAIRMAN THERRIAULT asked if Mr. Galvin had looked at the list of licensing permits that would be covered under SB 361 on page 3 and 4. He asked if there was anything that needed to be added or omitted. MR. GALVIN said that they had looked at the list but hadn't yet come to an official position. The list is different from that which had been presented by the Governor in SB 186. There are certain DNR authorizations that weren't in the previous bill but are in this bill and vice versa. They haven't had the discussion as to the appropriate way to handle that. They noted that there are some Department of Transportation authorizations that are included in the bill but are currently not subject to a coordinated review through the Coastal Management Program. The list would need more work and would require looking at each individual authorization and thinking about whether or not a coordinated approach was required. CHAIRMAN THERRIAULT asked if the allowance for public input into the process was sufficient. MR. GALVIN said there are a number of people who could better answer that question. The principle behind the original bill was that if the processes could be clarified and more easily understood, then those could be brought together and create a single review that would make it easier for the public to participate in the process. To the extent that SB 361 is able to achieve that, they would feel that there was no decrease in the public's opportunity to participate. CHAIRMAN THERRIAULT asked if there were questions from other committee members. MS. RUTHERFORD added that DNR had been pursuing some efficiencies since the Governor's bill had been introduced in 1997. She explained that permitting efficiency is not only about coordinated notices and reviews, but also about making information accessible to the public and easy to use and eliminating the number of times the public must apply for permits and how they paid for their fees. Those are some of the areas where DNR has made improvements. She said amendments to the oil and gas leasing statutes allow them to offer unleased oil and gas properties on an annual basis within large geographical areas. They have undertaken a large mine coordinated review process which has been very effective in bringing the agencies and the public into an integrated process. She said there have been many other lesser streamlining improvements. For instance, mining claims are now being reviewed in 160-acre blocks. These blocks also facilitate online permitting, which will be available next year. She noted that DNR now allows payment of mining rents online. Starting next fiscal year, they will allow miners to file and pay for claims at the recorders office only without having to go to another counter to make rent payments. In the area of land-use permits, she said commercial recreational permits for spike camps can now be applied for over the counter. By the end of this calendar year, DNR will have land-use permit applications, processing and permit issuance online. She said that in the area of material sales, DNR has increased the allowable over-the-counter contract from 100 cubic yards to 200 cubic yards, which decreased the workload associated with negotiating contracts and the number of times they had to negotiate a contract. In the area of land sales, she said DNR now has a website of lands that are available over-the-counter or are going to be offered in land sales. Although it has increased their workload significantly, it is good for the public. By the end of 2002, the public will be able to purchase over-the-counter parcels online. The public will also be able to make a sealed bid offer for a parcel online. Data from land purchases will automatically be entered into the state land records system, which will eliminate some double entry. MS. RUTHERFORD said DNR has other areas of improvements, such as online access to publications, land title information, records research and park cabin reservations. The efficiencies are important to the public and to how the agency does business. She believes the improvements that have happened and the improvements that are in the early stages will effect how a permit- streamlining bill is crafted. CHAIRMAN THERRIAULT asked if there were any questions from committee members. He asked Ms. Rutherford if there was anything specific to DNR in SB 361 that concerned her. MS. RUTHERFORD said that the list on pages 3 and 4 was of concern. They would like to look at it in the future in terms of what the bill will eventually do. There are some on the list they felt needed to be eliminated. Some of the improvements they've made will change how they approach various permitting processes and thus may not be necessary as part of the larger process. CHAIRMAN THERRIAULT asked if she felt that the process should be determined before deciding what it should apply to. MS. RUTHERFORD said that some of details of the various permits would be appropriate in the overall discussion of the bill. KURT FREDRICKSSON, Deputy Commissioner of the Department of Environmental Conservation (DEC), said that DEC was one of the primary permitting agencies in the state and SB 361 would have a large impact on DEC. Permit streamlining and simplification has been a topic of concern in DEC's effort to do a better job with permit development while allowing public participation and carrying out their mission of protecting public health and the environment. DEC has taken a number of initiatives, such as working with stakeholder groups in their water program. Some of the products of that have been seen before the Legislature this year. He said DEC has worked with workgroups on how they can use general permits to streamline some of the permits while protecting the environment. Where and how general permits are applied is the key. He said that DEC has general permits for log transfer facilities, seafood processing facilities and storm water discharges. DEC is automating the general permits so that they will be available over the Internet. DEC is also making progress in their air programs. They undertook a benchmarking study to look at how other states used the general permitting process and looked to see how they can take advantage of the experience of other states and apply it in Alaska. They have entertained ideas such as permit by rule and standard permit conditions and are moving ahead on that. They have taken steps to make things easier electronically. He wanted to caution the committee that coordinated project permitting should not be applied to all cases. For large mines and coastal management, it does make sense. TAPE 02-24, SIDE B  4:30 p.m. DEPUTY COMMISSIONER FREDRICKSSON said that the pipeline office was a good example where agencies came together to streamline the permitting process for TAPS. However, if you are only dealing with a small project, a coordinated review is not necessary as it is just as effective for the applicant to go through the coursework with the agencies. He said that there are times when it is more efficient for DEC to focus on a DEC issue rather than being brought into a larger debate. He noted that sometimes permitting is made easier when you have good information. When they have good ambient water and air quality data in site- specific information, it can go a long ways to resolving conflicts and answering questions. The lack of such information can delay a project. DEC thinks that workgroups are the best way to deal with issues and as this issue moves forward they suggest that all the other stakeholders should be involved in the process. He said he hasn't had the chance to go over the list in detail, but DEC will do so. One item that concerned him subsection (b) on page 6 addressing project application and listing the various parties that the applications would be available to or would be notified when applications were received. They have come across this issue when they do an oil spill prevention and response contingency plan when they also alert the Prince William Sound and Cook Inlet Regional Citizens' Advisory Council. He thinks that the agency should make an effort to contact local governments when dealing with development or permitted activity. He didn't notice local governments in the list, although the coastal districts in the coastal context are one in the same as local governments. He said that DEC has looked at their appeal procedures and have been working on updating their regulations. One of the more important updated regulations deals with allowing the parties to settle their differences in an informal process when the parties are willing to work together to resolve issues. He feels the appeals process section of the bill is something he would like to explore to make it a rigid and formal process when necessary, but still have a way for parties to come together through a mediated effort to find a way of resolving conflict. CHAIRMAN THERRIAULT asked if there were questions from committee members. MS. DANA OLSON said she appreciated that this bill was being held to get further input. She feels that the issue needs more time to be looked at. She feels it would be important to get input from people who are affected and that they be allowed to participate in the planning process. This would allow the Committee insight into things that aren't generally considered in permits and their affects on people. She noted that Title 39 was not in SB 361. In 1987, the Legislature made a quasi-judicial decision requiring that the 1984 Chase Agricultural Homestead Lottery undergo a provision under Title 38, which was not funded. This has left her in limbo for years. She would like the Committee to address the issue with her as a go-between between her and DNR because the system is broken. Her property entrance is still valid but she is required to do something that she can't do by herself. The court case is an enforceable policy of the Coastal Management Act. This could affect other interests beside herself. She would like it resolved one way or another by the Committee. She feels this should be codified in law and it requires some consideration of her interests and DNR's and the State's interests. She would like some means to participate in the process. CHAIRMAN THERRIAULT asked if she was part of a coastal service area. MS. OLSON said that she lives in the coastal community of Knik. CHAIRMAN THERRIAULT asked if she was part of their service district. MS. OLSON said that she was in the Mat-Su Borough coastal district but the Mat-Su coastal district had been ineffective in addressing the community's concerns. The district has been cited in a federal lawsuit in the past and is a system that needs to be looked at. She pointed out that they were not here today and thus she can only assume that they weren't interested. She lives there and she is interested. She is willing to volunteer her time and effort to provide input if the Committee is willing to listen. CHAIRMAN THERRIAULT asked if there was anyone else who wished to testify. SB 361 was held in committee.