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Vol. 16, No. 20 Week of May 15, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Senate Finance modifies HB 106; admin: too many changes in CS

Work on House Bill 106, the Alaska Coastal Management Program reauthorization and revision, reached an impasse in the Alaska Legislature May 10, after the Senate Finance Committee introduced a committee substitute.

Joe Balash, deputy commissioner of the Department of Natural Resources, who worked with House Resources on an initial committee substitute, told the Alaska Support Industry Alliance May 12 that the administration had been working with Senate Finance on changes to the bill which passed the House 40-0 at the end of the regular session. He said committee members knew what the governor’s limits were on changes to the House bill, but pushed beyond those limits.

Balash said there was no single change in the Senate Finance CS that was a deal breaker, but a combination of changes that broke the camel’s back.

He said the governor is concerned that the totality of changes in the Senate Finance CS will create too much uncertainty going forward.

The governor is supporting the bill as passed by the House, Balash said.

Program sunsets

ACMP sunsets at the end of June without reauthorization and the administration initially proposed reauthorizing the existing program. But coastal districts — and their legislators — have been unhappy with changes made to the program in 2003 and after long discussions in House Resources a compromise was crafted which restored a policy council while leaving responsibility for ACMP in the Department of Natural Resources.

Balash said the administration engaged in the process in House Resources when faced with program changes it found unacceptable.

The governor engaged the full Resources subcabinet in a top to bottom review of the House Resources committee substitute and the version which came out of House Finance had a number of checks and balances, he said.

While no party was completely satisfied, the House Finance CS was endorsed by the Resource Development Council, the Council of Alaska Producers, the Alaska Miners Association and North Slope Borough Mayor Edward Itta, Balash said.

That bill passed the House 40-0.

Senate Finance promised changes

The Legislature was near the end of its 90-day session when HB 106 passed the House, and while Senate Finance heard the bill on April 17, the last day of the regular session, it did not act on the legislation.

Balash noted that the presentation of the bill in Senate Finance was done by the attorney general and the commissioners of the departments of Environmental Conservation and Natural Resources.

There are not very many instances where you see that level of engagement, he said.

Both Finance co-chairs, Lyman Hoffman, D-Bethel, and Bert Stedman, R-Sitka, indicated at the time that they expected to make changes in the bill.

Attorney General John Burns, who had shepherded the final compromise in the House, told Senate Finance in that April 17 hearing that the compromise in the bill was finely balanced.

HB 106 was on the governor’s call for the first special session, and Senate Finance heard an overview of the committee substitute May 10 and held the bill.

The committee had not yet held or scheduled another hearing on the bill when Petroleum News went to press May 12.

Asked what would happen if the bill failed to pass, Balash said the Legislature would have to reconstitute the program from scratch. Without reauthorization, funding for the 33 employees running the program ends June 30.

Board member removal

David Gray, a Hoffman staff member, explained the committee substitute in Senate Finance May 10, noting that it maintained the House structure, with the new coastal policy board — four commissioners or deputy commissioners, four representatives from coastal districts and one representative from industry — acting as a review and oversight of DNR ACMP activities, while DNR retains all of its responsibilities for the program.

The first change in the CS relates to the removal of board members.

The House version said a public member of the policy board “may be removed at the pleasure of the governor.”

Senators had indicated in April that they were not happy with that, and the CS gives the board authority to recommend to the governor that he remove a public member for cause, while allowing that with or without the board’s recommendation the governor may remove a public member for cause with written notice of not less than 10 days and an opportunity to be heard.

For cause is defined in the CS as including “lack of contribution to the board’s work, neglect of duty, incompetence, inability to serve, poor attendance, and misconduct in office.”

Evaluation of district enforceable policies

The CS changed how DNR considers factors in determining whether a district’s local enforceable policy employs the least restrictive means to achieve its objective, taking one group of factors out of factors that “shall be considered” and placing it in a category DNR “may require be addressed”: economic effects of alternative methods; technological feasibility of alternative methods; and any other relevant factors.

Factors remaining in the “shall be considered” category are: alternative methods of achieving the objective of the policy; local knowledge or scientific evidence supporting each alternative method; and how the alternative methods may affect other existing or potential uses.

Under approval of district plans, if DNR does not approve the plan, or approves it only in part, the district can request that the board review the plan and make recommendations. The CS made a change in one of the four options DNR has after the board has reviewed the plan and submitted recommendations. The fourth was a requirement that DNR require “any other action be taken by the coastal resource district.” The CS changes that to “require the coastal resource district to submit additional information if, in the judgment of the department, additional information is necessary for the department to approve the plan or portions of the plan.”

Designated areas

“Designated areas” for local enforceable policies have been a huge issue for coastal districts under the existing ACMP, and DNR committed to not requiring them for enforceable policies.

That was written into the Senate Finance CS.

Two definitions were eliminated in the Senate CS; Gray said the definition of scientific knowledge was already in statute, as was the definition of local knowledge, with the exception of the requirement in the House version of the bill that local knowledge is “not contradicted by scientific knowledge.”

The Senate CS also requires a second report to the Legislature.

The House version required the new board to make recommendations to the Legislature before Feb. 1, 2013, on the “DEC carve out” — the elimination of Department of Environmental Conservation permits from ACMP; the new section requires an overview of the whole program, regulations adopted and any proposed changes by the same date.

—Kristen Nelson

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