Legislature(2003 - 2004)

04/30/2003 09:00 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     SENATE BILL NO. 142                                                                                                        
     "An  Act designating  the Department  of  Natural Resources  as                                                            
     lead   agency  for   resource  development   projects;   making                                                            
     conforming  amendments; and providing  for an effective  date."                                                            
                                                                                                                                
     CS FOR SENATE BILL NO. 142(RES)                                                                                            
     "An  Act designating  the Department  of  Natural Resources  as                                                            
     lead   agency  for   resource  development   projects;   making                                                            
     conforming  amendments; and providing  for an effective  date."                                                            
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-chair  Wilken informed  that the  Senate Rules  Committee at  the                                                            
request of  the Governor sponsors  this legislation. He stated  that                                                            
the intent  of this  legislation is  to identify  the Department  of                                                            
Natural  Resources  as  the lead  agency  for  resource development                                                             
projects  and  to establish  an  Office of  Project  Management  and                                                            
Permitting within  the Department. He noted that "this  office would                                                            
lead and coordinate  all matters relating to the State's  review and                                                            
authorization" of these projects.                                                                                               
                                                                                                                                
Senator Bunde moved to  adopt the original bill, SB 142, Version 23-                                                            
GS1070\A rather than the Senate Resources committee substitute.                                                                 
                                                                                                                                
Co-Chair  Wilken  asked  that  Members  refrain  from  offering  any                                                            
motions  at  this  time. He  specified  that  the  Senate  Resources                                                            
committee substitute is before the Committee.                                                                                   
                                                                                                                                
Without objection, Senator Bunde WITHDREW the motion.                                                                           
                                                                                                                                
Co-Chair  Wilken  clarified  that  CS  SB  142(RES)  is  before  the                                                            
Committee for discussion.                                                                                                       
                                                                                                                                
TOM   IRWIN,  Commissioner,   Department   of   Natural   Resources,                                                            
introduced  Kurt Fredriksson,  Deputy  Commissioner,  Department  of                                                            
Environmental  Conservation, Mary Siroky and Janet  Burleson Baxter,                                                            
Legislative   Liaisons   for  the   Departments   of  Environmental                                                             
Conservation  and Natural  Resources, respectfully,  and noted  that                                                            
Richard  LeFebvre,   Deputy  Commissioner,  Department   of  Natural                                                            
Resources,   and  Cameron   Leonard,  Natural   Resources   Section,                                                            
Department of Law, were available via teleconference.                                                                           
                                                                                                                                
Commissioner  Irwin voiced  support  of Governor  Frank Murkowski's                                                             
efforts to develop  and utilize the State's resources.  He continued                                                            
that  this bill  would  facilitate  and expedite  the  use of  State                                                            
resources  by  providing  the  Commissioner  of  the  Department  of                                                            
Natural Resources  with statutory  authority to lead and  coordinate                                                            
all matters  relating  to the State's  review  and authorization  of                                                            
resource  development   projects.   He  stated  that  in   order  to                                                            
accomplish  this goal, the Department  must have clear and  explicit                                                            
authority. He noted that  while the Department is currently the lead                                                            
agency for mining activities,  this bill would provide "the explicit                                                            
authority" required for other resource development activities.                                                                  
                                                                                                                                
Commissioner  Irwin continued that  the establishment of  the Office                                                            
of Project Management  and Permitting would allow  the Department to                                                            
efficiently  review and  authorize  large projects  and oversee  the                                                            
Alaska  Coastal  Zone  Management  Program.  He  stated  that  where                                                            
possible,  the  permitting  process  would  entail  a  project  team                                                            
approach.  He stressed  that the intent  of this  legislation  is to                                                            
coordinate  and integrate  projects and that  this change would  not                                                            
alter the decision-making  authority from other entities such as the                                                            
Department of Environmental  Conservation. He attested that the goal                                                            
of this legislation "is to get people together."                                                                                
                                                                                                                                
Commissioner Irwin continued  that small, less complex projects that                                                            
require few permits  could benefit from the establishment  of a lead                                                            
agency coordination for  review. He stated that these projects might                                                            
or might not require the establishment of a project team.                                                                       
                                                                                                                                
Commissioner  Irwin  specified that  resource  development  projects                                                            
that utilize  the lead coordinating  agency and project review  team                                                            
approach  would  have  a  three-phase  process  that  would  include                                                            
evaluation  of the  project  to determine  whether  the lead  agency                                                            
review project  team approach  would adequately  address the  review                                                            
and  permitting   needs  of  the   project;  would  result   in  the                                                            
establishment  of the  project team,  development  of an  integrated                                                            
review schedule,  and the dissemination of information  requirements                                                            
and completion  of  necessary agreements  amongst  the agencies  and                                                            
applicants; and  lastly the actual project review  and authorization                                                            
process  including   public  participation   that  adheres   to  the                                                            
requirements specific  to that project. Additionally,  he noted that                                                            
the  bill  would  assist  the Department's   efforts  to  streamline                                                            
project  review  and  authorization   by facilitating   the  state's                                                            
ability  to  pull together  agencies  to  address  project  specific                                                            
concerns   and  to   facilitate   and   expedite  the   review   and                                                            
authorization  process;  and  to develop  a  more  cohesive  working                                                            
relationship among  representatives of the agencies.  He stated that                                                            
this is where  the teamwork and communication develops.  Thirdly, he                                                            
stated that through better  communication, more efficient permitting                                                            
and consolidated  public  process, where possible,  would assist  in                                                            
integrating the State and federal agency process requirements.                                                                  
                                                                                                                                
Commissioner Irwin  informed that the laws for resource  development                                                            
have expanded  and that more agencies with permitting  authority are                                                            
involved  in the process.  He asserted  that, "resource development                                                             
should not be  held up by the sheer complexities of  government." He                                                            
stated  that this bill  is intended  to assist  in alleviating  that                                                            
problem.                                                                                                                        
                                                                                                                                
Commissioner  Irwin voiced that the  provision relating to  a repeal                                                            
of this statute  that is included in the Senate Resources  committee                                                            
substitute  is a "sound concept"  which is  being expanded  to other                                                            
State  projects.  He informed  that  rather than  this  being a  new                                                            
concept,  the Department  currently  utilizes the  provision in  its                                                            
large  mining project  permitting.  He  further announced  that  the                                                            
concern  regarding the unintended  consequences  of the termination                                                             
date clause,  or "what follows  down the road"  is a key element  in                                                            
this discussion.  He stated that by specifying that  the lead agency                                                            
authority  being  granted to  the Department  of  Natural  Resources                                                            
would be  repealed or sunset  on July 1, 2007  would send the  wrong                                                            
message  to  developers  and  investors  because  he  stressed  that                                                            
entities,  which invest millions  of dollars  in a project,  over as                                                            
much as a twenty-year  period, would interpret "the  message as that                                                            
the State will only stick  with them for four years. This is not the                                                            
intent  we want  to give  out there.  The perception  is bad  enough                                                            
already."  He avowed  that the  State is  addressing  this issue  to                                                            
verify that Alaska  "in this for the long haul… we're  going to make                                                            
a program  that works  and that  people  are going  to want to  keep                                                            
going." He stated  that this lead agency legislation  is one of many                                                            
pieces  of legislation  that  the Administration  is  furthering  to                                                            
accomplish efficient permitting.                                                                                                
                                                                                                                                
Senator  Taylor voiced  concern that  other than  establishing  some                                                            
timelines and  a lead agency that  would conduct hearings,  the only                                                            
thing  accomplished by  this legislation  over  the current  process                                                            
established  by  the Office  of  Governmental  Coordination  is  the                                                            
establishment of some firm  timelines that would require entities to                                                            
state positions on projects "within a given period."                                                                            
                                                                                                                                
     Sec.  46.35.071 (e)  Each state agency  having jurisdiction  to                                                            
     approve  or deny  an application  for a permit  shall have  the                                                            
     power vested in it  by law to make such determinations. Nothing                                                            
     in AS  46.35.031 - 46.35.071  lessens or reduces these  powers,                                                            
     and AS 46.35.031  - 46.35.071 modify only the  procedures to be                                                            
     followed in the carrying out of the powers.                                                                                
                                                                                                                                
Senator  Taylor questioned  why Section  46.35.071(e) provides  each                                                            
agency with  the independent authority  to approve or deny  a permit                                                            
as he  attested  that "if  the Department  of Natural  Resources  is                                                            
truly going to be the lead  agency, then all other agencies in State                                                            
government  should be advisory." He  stated were this the  case, the                                                            
Department  of  Natural Resources  could  make  a decision  and  the                                                            
process  could move  forward. However,  he asserted  that "if  every                                                            
agency  is  allowed  to  have  the veto  power  that  we  have  seen                                                            
exercised  other the  last several  years,  then I'm  not sure  that                                                            
we're really accomplishing  much other than electing the cheerleader                                                            
for the committee  and setting the  timeframe for how long  it would                                                            
take them to kill the project for you."                                                                                         
                                                                                                                                
Commissioner  Irwin responded  that,  while he  understands  Senator                                                            
Taylor's concern,  the large project  team approach "does  work." He                                                            
stated that having a designated  lead agency provides "the authority                                                            
to  get  individual   agencies  to  the  table  and  that's   what's                                                            
critical."   He  stated  efficiency   is  created  by  establishing                                                             
communication  at the  onset  of a project  as opposed  to  affected                                                            
agencies  becoming involved  as the project  progresses and  thereby                                                            
causing project  delays. He  stated that,  in addition to  involving                                                            
all agencies  at the beginning of  a project, the permittee  is made                                                            
aware  of the flow  of communication  and project  requirements  and                                                            
timelines.  He  stated that  upon  completion  of the  project  team                                                            
meeting,  the   Department  of  Natural   Resources,  as   the  lead                                                            
authority, would establish  timelines and the schedule of events and                                                            
responsibilities. He reiterated that the process would work.                                                                    
                                                                                                                                
Co-Chair Wilken  questioned why the adoption of the  sunset language                                                            
amendment  enlarged the original  two-page  bill to a fourteen-page                                                             
bill as reflected in CS SB 142(RES), Version 23-GS1070\D.                                                                       
                                                                                                                                
CAMERSON  LEONARD,  Assistant Attorney  General,  Natural  Resources                                                            
Section,   Civil  Division,   Department  of   Law,  testified   via                                                            
teleconference from Anchorage  to confirm that the bill was expanded                                                            
"purely"  because of  the  sunset provision  adopted  by the  Senate                                                            
Resources Committee.  He informed  the Committee that the  Murkowski                                                            
Administration  requests  that  the original  version  of the  bill,                                                            
which does not contain the sunset provision, be adopted.                                                                        
                                                                                                                                
Co-Chair Wilken  asked whether the  Department of Natural  Resources                                                            
is unable to support  the sunset clause because "it  sends the wrong                                                            
message to developers."                                                                                                         
                                                                                                                                
Commissioner Irwin  responded that the four-year sunset  clause does                                                            
send the wrong  message to developers  and that, instead,  the State                                                            
should  send a message  to developers  conveying  that the State  is                                                            
committed "to  making this work." He expressed that  the Legislature                                                            
could  conduct an  annual  review  of the  process and  require  the                                                            
Department to be accountable for moving the process forward.                                                                    
                                                                                                                                
Co-Chair Wilken surmised  that a future administration might possess                                                            
a different  approach to the purpose  of this legislation,  and that                                                            
the  approach might  "be  an automatic  retreat  from  this type  of                                                            
development in the State."                                                                                                      
                                                                                                                                
Commissioner  Irwin noted that the  "power of an Administration  can                                                            
speed up or close down  any process." He stated that the omission of                                                            
the sunset  clause would assist this  Administration's efforts;  but                                                            
he  voiced  that,  "it doesn't  cure  the  problem  of  what  future                                                            
administrations might do."                                                                                                      
                                                                                                                                
Amendment #1:  This conceptual amendment transfers  $36,200 from the                                                            
Department  of Environmental Conservation  personal services  budget                                                            
to provide  funding  for Department  of Natural  Resources  expenses                                                            
that would be generated by this bill.                                                                                           
                                                                                                                                
Senator  Olson offered  a motion to  adopt Amendment  #1. He  stated                                                            
that this bill appears  to reduce the demand on services provided by                                                            
the Department  of Environmental Conservation  while increasing  the                                                            
demand for services in the Department of Natural Resources.                                                                     
                                                                                                                                
Co-chair  Wilken objected.  He asked which  of the two accompanying                                                             
fiscal notes would be affected.                                                                                                 
                                                                                                                                
Senator Olson identified  the affected fiscal note as the Department                                                            
of Environmental Conservation fiscal note #1.                                                                                   
                                                                                                                                
A roll call was taken on the motion.                                                                                            
                                                                                                                                
IN FAVOR: Senator Hoffman and Senator Olson                                                                                     
                                                                                                                                
OPPOSED: Senator Bunde, Senator B. Stevens, Senator Taylor, Co-                                                                 
chair Green, and Co-chair Wilken                                                                                                
                                                                                                                                
The motion FAILED (2-5)                                                                                                         
                                                                                                                                
Amendment #1 FAILED to be adopted.                                                                                              
                                                                                                                                
Senator Bunde moved to  adopt the original bill, SB 142, Version 23-                                                            
GS1070\A as the working document.                                                                                               
                                                                                                                                
[Note:  Co-chair  Wilken  identified  this motion  as  Amendment  #2                                                            
during discussion on the bill.]                                                                                                 
                                                                                                                                
There  being  no  objection,  SB 142  was  ADOPTED  as  the  working                                                            
document.                                                                                                                       
                                                                                                                                
Co-chair  Wilken  asked for  confirmation  that  the Administration                                                             
supports this action.                                                                                                           
                                                                                                                                
Commissioner Irwin concurred.                                                                                                   
                                                                                                                                
AT EASE 9:22 AM / 9:24 AM                                                                                                       
                                                                                                                                
Senator  Taylor moved  to report  the original  bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There being  no objection, SB 142  was REPORTED from Committee  with                                                            
zero  fiscal   note  #1   from  the  Department   of  Environmental                                                             
Conservation and zero fiscal  note #2 from the Department of Natural                                                            
Resources.                                                                                                                      
                                                                                                                                
AT EASE 9:26 AM / 9:27 AM                                                                                                       
                                                                                                                                

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