Legislature(2003 - 2004)

04/21/2004 01:53 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 546                                                                                                            
     An  Act  relating  to regulation  of  the  discharge  of                                                                   
     pollutants  from  timber-related  activities  under  the                                                                   
     National   Pollutant   Discharge   Elimination   System;                                                                   
     relating  to  waste  treatment   and  disposal  permits;                                                                   
     making  conforming  amendments;  and  providing  for  an                                                                   
     effective date.                                                                                                            
ERNESTA  BALLARD, COMMISSIONER,  DEPARTMENT OF  ENVIRONMENTAL                                                                   
CONSERVATION  (DEC), explained  that  Governor Murkowski  has                                                                   
discussed   permit  streamlining.   The  Governor   envisions                                                                   
efficient   and   effective    resource   development   while                                                                   
maintaining the State's environmental  goals. This bill would                                                                   
help to ensure achievement of those goals.                                                                                      
Commissioner   Ballard  informed   the  Committee   that  the                                                                   
National Permit Discharge Elimination  System (NPDES) program                                                                   
is designed  in the  Clean Water  Act for  delegation to  the                                                                   
states. Forty-five states have  delegation, but Alaska is one                                                                   
of the  five states without it.  The Clean Water  Act intends                                                                   
that permitting  be  done at the  state level  where a  state                                                                   
regulatory  agency  can  be  in  contact  with  industry  and                                                                   
municipal  dischargers  to  make   the  important  risk-based                                                                   
decisions effective in protecting a state's waters.                                                                             
Commissioner Ballard  pointed out that  the key parts  of the                                                                   
Clean Water  Act fall  under Sections 402  and 401.   Section                                                                   
402 allows the permit to be written  and issued, while 401 is                                                                   
the  "heart"  of  the program  that  requires  the  state  to                                                                   
certify that the permit will protect  the state's waters. The                                                                   
DEC   issues  the   401  certification   and  currently   the                                                                   
Environmental Protection Agency  (EPA) issues the 402 permit,                                                                   
which requires a  state applicant to get two  permits. In the                                                                   
45  states with  delegation, only  one  permitting action  is                                                                   
necessary  because the state  issues the  402 permit  and the                                                                   
401  certification. Both  of these  water protection  actions                                                                   
are based on a state's water quality standards.                                                                                 
Commissioner  Ballard  explained  that  the  DEC  is  seeking                                                                   
primacy for  only a  portion of  the industries that  receive                                                                   
permits in the State because the  Department is not ready for                                                                   
the  other  industry  segments   to  submit  a  full  primacy                                                                   
package.  The timber  industry requested  partial primacy  to                                                                   
give them the services it needs  from the DEC. She noted that                                                                   
this  would   allow  other  industries   to  observe   how  a                                                                   
regulatory package comes together.  The Department intends to                                                                   
use this as a  pilot project and to seek full  primacy in the                                                                   
Commissioner  Ballard  referred   to  the  fiscal  note,  and                                                                   
pointed  out that  it  is "frontloaded"  with  the first  two                                                                   
years  requiring a  more concentrated  effort by  the DEC  to                                                                   
write regulations  and negotiate with the EPA.   The bill has                                                                   
a relatively small fiscal impact  in future years because the                                                                   
timber industry is currently small.                                                                                             
Representative   Chenault  referred   to   the  fiscal   note                                                                   
reflecting  in   the  Analysis  Continuation   one  full-time                                                                   
position from FY 2005 to FY 2010  and one permanent position.                                                                   
He  questioned  the  two  long-term  non-permanent  positions                                                                   
under Contractual,  noting the  change from $300  thousand to                                                                   
$56 thousand for those two positions.                                                                                           
Commissioner  Ballard  explained that  during  the first  two                                                                   
years,  FY 05  and  FY 06,  the contractual  positions  would                                                                   
write regulations  and would  not remain  part of the  staff.                                                                   
The  permanent  position  would   work  with  the  regulation                                                                   
writers and stay on with the Department.                                                                                        
DAN EASTON,  DIRECTOR, DIVISION OF FACILITY  CONSTRUCTION AND                                                                   
OPERATION, DEPARTMENT OF ENVIRONMENTAL  CONSERVATION, thought                                                                   
that the  Committee might not  have an accurate  fiscal note.                                                                   
Representative  Chenault said  that  the fiscal  note in  his                                                                   
packet was dated  3-9-04, and Commissioner  Ballard clarified                                                                   
that it was the fiscal note she was discussing.                                                                                 
Commissioner   Ballard   continued    explaining   that   the                                                                   
frontloading expense would allow  contractors to complete the                                                                   
regulatory  package under the  Department's supervision.  The                                                                   
remaining staff  position is a  permanent state  employee. In                                                                   
response   to   a  question   by   Representative   Chenault,                                                                   
Commissioner Ballard  explained that  $56 thousand is  in the                                                                   
Department's budget  as an RSA  to the Department of  Law for                                                                   
on-going legal expenses.                                                                                                        
RON WOLFE,  CORPORATE FORESTER,  SEALASKA CORPORATION,  spoke                                                                   
in support of HB 546 that would  allow timber primacy for the                                                                   
NPDES  program.  The  Corporation believes  that  the  action                                                                   
would help a struggling industry  whose survival is important                                                                   
to Alaska's healthy  economy. He pointed out  that the timber                                                                   
industry  is also  important to  the  Native communities  who                                                                   
receive revenues under ANCSA in  the form of dividends. State                                                                   
primacy would give  local access to the regulators  on permit                                                                   
issues rather  than the EPA in  Seattle. Mr. Wolfe  said that                                                                   
the  Sealaska Corporation's  NPDES permits  for log  transfer                                                                   
facilities were  completed three  years ago and  amended last                                                                   
Co-Chair Harris asked  if it would be possible  to change the                                                                   
$177  thousand in  General Funds  for this  year's budget  to                                                                   
Receipt Supported Services on  the fiscal note.  Commissioner                                                                   
Ballard explained  that it would  be difficult to  charge for                                                                   
the services  of writing  regulations.  In future years,  the                                                                   
Department would propose  a fee structure as it  has done for                                                                   
other permit programs.                                                                                                          
Co-Chair Harris pointed out on  the fiscal note that only $30                                                                   
thousand is  indicated in  later years. Commissioner  Ballard                                                                   
said  that  the  DEC  would  propose  to  the  Legislature  a                                                                   
modified  fee  structure  similar  to  its  other  permitting                                                                   
programs that  have a  "slightly stronger contribution"  made                                                                   
by the permit holder.                                                                                                           
Representative Croft  asked if there  would continue to  be a                                                                   
significant General  Fund component and the DEC  would not be                                                                   
fee-based.  Commissioner Ballard  commented on balancing  the                                                                   
General Fund  subsidy of a  permit program having  the public                                                                   
effect  of protecting  the  state's  resources  but also  the                                                                   
direct  effect  of  benefiting   a  municipal  or  industrial                                                                   
discharger.  She pointed out  that the  DEC has General  Fund                                                                   
support  of  all  its permit  programs,  and  said  that  the                                                                   
Legislature's  intent  would  be  some  continuing  level  of                                                                   
General  Fund   support  for   the  Department's   permitting                                                                   
programs.  Future administrations  would  discuss the  issue,                                                                   
she said.                                                                                                                       
Representative  Foster MOVED to  report CSHB 546(JUD)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note.  There being NO  OBJECTION, it was                                                                   
so ordered.                                                                                                                     
CSHB 546(JUD)  was REPORTED out of Committee  with individual                                                                   
recommendations  and one previously  published fiscal  impact                                                                   

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