Legislature(2003 - 2004)

04/16/2004 01:20 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 546 - POLLUTION DISCHARGE & WASTE TRMT/DISPOSAL                                                                            
                                                                                                                                
Number 0883                                                                                                                     
                                                                                                                                
CHAIR McGUIRE announced that the  next order of business would be                                                               
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."                                                                               
                                                                                                                                
Number 0906                                                                                                                     
                                                                                                                                
ERNESTA  BALLARD,   Commissioner,  Department   of  Environmental                                                               
Conservation (DEC), said  that HB 546 will  allow the department,                                                               
and  therefore  the state,  to  achieve  its environmental  goals                                                               
while streamlining its permitting process.  She went on to say:                                                                 
                                                                                                                                
     House  Bill 546  has to  do  with state  primacy for  a                                                                    
     portion of  the Clean Water  Act.  The Clean  Water Act                                                                    
     was  designed   by  the  United  States   Congress  for                                                                    
     implementation by the states.   Forty-five states fully                                                                    
     implement  the permitting  section of  the Clean  Water                                                                    
     Act, only  five do not; we  are one of the  five states                                                                    
     that do  not fully  implement the provisions  the Clean                                                                    
     Water  Act designed  for  implementation  at the  state                                                                    
     level.  There are two key  sections that I want to call                                                                    
     your attention to today so I  can explain to you how it                                                                    
     is that [HB  546] will allow us to  continue to achieve                                                                    
     our environmental  goals while streamlining  our permit                                                                    
     process, and  those two sections  are Sections  402 and                                                                    
     401 of the Clean Water Act.                                                                                                
                                                                                                                                
     Section 402  is the  section of  the Act  which charges                                                                    
     the   permitting    agency,   currently    the   [U.S.]                                                                    
     Environmental   Protection  Agency   [EPA],  ...   with                                                                    
     permitting discharges  to the nation's water.   Section                                                                    
     401 is the section of  the Act which requires the state                                                                    
     to [ensure] ...  that a permit written  under the Clean                                                                    
     Water  Act  will  achieve   and  maintain  state  water                                                                    
     quality  standards.     The   way  this   is  presently                                                                    
     organized  in the  five  states,  including Alaska,  in                                                                    
     which  there  is  not  state  primacy,  [is  that]  the                                                                    
     federal  government,  through  [the]  EPA,  writes  the                                                                    
     discharge  permit, and  the State  of Alaska  certifies                                                                    
     that it will achieve state water quality standards.                                                                        
                                                                                                                                
     In  other   words,  it  is  the   state  water  quality                                                                    
     standards  which support  both the  federal permit  and                                                                    
     the  state  certification.    It  is  the  state  which                                                                    
     [ensures]  ...  that  its  waters  will  be  free  from                                                                    
     pollution.   The permitting applicant has  to deal with                                                                    
     a  federal  agency  and  a state  agency  in  order  to                                                                    
     [assure] that their discharge  will achieve state water                                                                    
     quality  standards.    This  is  duplicative,  it's  an                                                                    
     unnecessary burden on the applicant,  [and] it does not                                                                    
     do anything  to achieve  water quality  protection that                                                                    
     the  state cannot  achieve  by itself.    Primacy is  a                                                                    
     complicated  process of  negotiation between  the state                                                                    
     and [the] EPA. ...                                                                                                         
                                                                                                                                
Number 1080                                                                                                                     
                                                                                                                                
COMMISSIONER BALLARD continued:                                                                                                 
                                                                                                                                
     The administration  had hoped to ask  the legislature's                                                                    
     permission  to  (indisc.)   primacy  for  all  industry                                                                    
     segments.  House  Bill 546 is a pilot case  for us - it                                                                    
     asks  for permission  to achieve  primacy just  for the                                                                    
     timber industry.   And  you might  [ask] ...,  "Why the                                                                    
     timber industry?"   And the  reason is that  the timber                                                                    
     industry  ... [is]  the industry  segment in  Alaska in                                                                    
     which  the State  of Alaska,  through the  DEC, clearly                                                                    
     has the best  expertise between the two  agencies - the                                                                    
     federal and the  state agency.  That  reason being that                                                                    
     timber ... used to be a major business for us.                                                                             
                                                                                                                                
     Sadly, it's  not so much  anymore, but over  the course                                                                    
     of  the  last three  years  there's  been a  ...  major                                                                    
     administrative   proceeding  challenging   the  federal                                                                    
     timber-related  permit, and  the  state  has taken  the                                                                    
     labor  (indisc.)  to do  the  clarifying  work and  the                                                                    
     analysis necessary to bring  that matter to conclusion.                                                                    
     So the  timber industry and  the state agreed,  and the                                                                    
     other industry  sectors - the seafood,  the mining, the                                                                    
     oil  and gas,  and the  municipal discharge,  which are                                                                    
     the  major other  industry sectors  -  have all  agreed                                                                    
     that  this is  a  good test  pilot for  us  to see  how                                                                    
     primacy  will   work  with  [the]  DEC   assuming  that                                                                    
     responsibility under the Clean Water Act.                                                                                  
                                                                                                                                
     That's  what  [HB 546]  is  all  about.   It  does,  in                                                                    
     summary, then,  two things:  it  ... partially fulfills                                                                    
     the state's responsibility, under  the Clean Water Act,                                                                    
     to assume  primacy; and, more importantly,  it directly                                                                    
     addresses  the state's  responsibility, articulated  by                                                                    
     the legislature in Title 46,  that we will maintain our                                                                    
     natural resources  safe from  pollution for  the social                                                                    
     and  economic wellbeing  of  our own  people.   I'd  be                                                                    
     happy to answer questions ....                                                                                             
                                                                                                                                
Number 1170                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM asked for clarification regarding the fiscal                                                                
note.                                                                                                                           
                                                                                                                                
COMMISSIONER BALLARD said:                                                                                                      
                                                                                                                                
     In my  remarks I  pointed out that  ... Section  402 of                                                                    
     the   Clean   Water   Act   is   intended   for   state                                                                    
     implementation.  In order to  achieve primacy, even for                                                                    
     one industry  sector, we  need to  work out  with [the]                                                                    
     EPA  all  of the  regulatory  structure  that would  be                                                                    
     necessary to achieve primacy  for all industry sectors.                                                                    
     [With regard  to] the two-year fiscal  note, for fiscal                                                                    
     years '05 and '06, in  which you see operating expenses                                                                    
     of roughly $400,000 each year  - ... half of which will                                                                    
     be  offset  by  an  EPA  grant  -  those  expenses  are                                                                    
     regulatory expenses to write the regulations.                                                                              
                                                                                                                                
     We need to work through,  in specific detail with [the]                                                                    
     EPA,  what   our  regulatory  structure  will   be  for                                                                    
     enforcement, for inspection,  for fines, for compliance                                                                    
     - what  the regulations  will actually  look like.   So                                                                    
     there's  a labor-intensive,  upfront  cost  to put  the                                                                    
     regulations in  place, and  then the  ongoing operating                                                                    
     costs, which  ... [are] referred  to in the  out years,                                                                    
     of  ...  [$132,000] is  simply  the  cost of  a  single                                                                    
     employee  running   the  program  and   the  associated                                                                    
     overhead  with that  employee.   So  that  would be  an                                                                    
     addition of  one to our  staff of roughly  24-25 people                                                                    
     that we have in our water program already.                                                                                 
                                                                                                                                
COMMISSIONER BALLARD,  in response  to questions on  an unrelated                                                               
topic,    mentioned    that    under    certain    circumstances,                                                               
municipalities  can   seek  a  "301  H   Waiver"  from  treatment                                                               
provisions   of  the   Clean  Water   Act;  that   municipalities                                                               
throughout Southeast  Alaska have such  a waiver; and  that small                                                               
boats  are  required by  the  U.S.  Coast  Guard to  have  marine                                                               
toilets  and are  prohibited from  discharging  them into  Alaska                                                               
waters.                                                                                                                         
                                                                                                                                
Number 1498                                                                                                                     
                                                                                                                                
COMMISSIONER BALLARD,  in response to another  question about the                                                               
fiscal note, relayed  that the federal receipts  for fiscal years                                                               
'05  and '04  are only  available for  developing regulations  to                                                               
achieve primacy.   On the issue  of why the state  should seek to                                                               
take over administration of the permitting program, she said:                                                                   
                                                                                                                                
     The  federal  government  is  not   set  up  to  run  a                                                                    
     permitting program for any state,  much less a state as                                                                    
     large  and complex  as the  state of  Alaska.   We were                                                                    
     called  on not  too long  ago by  ... a  state industry                                                                    
     that asked  whether we could  help them  (indisc) NPDES                                                                    
     [National   Pollutant  Discharge   Elimination  System]                                                                    
     discharge permit,  ... [when the] EPA  told them they'd                                                                    
     have to wait three years  before even the file could be                                                                    
     opened.    [The]  EPA is  not  staffed  to  accommodate                                                                    
     running  a program  that  is designed  to  [be run]  by                                                                    
     states; they do  it by default because  the five states                                                                    
     that  haven't asked  for primacy  haven't done  so, but                                                                    
     the EPA  program is  a very  process-driven, inflexible                                                                    
     program.  The state uses risk-based tools. ...                                                                             
                                                                                                                                
     Through its  certification that  a discharge  will meet                                                                    
     water  quality standards,  the state  uses a  number of                                                                    
     site-specific, risk-based tools such  as a mixing zone,                                                                    
     sight    specific    criteria,   naturally    occurring                                                                    
     conditions  - any  number of  similar modifications  to                                                                    
     permit conditions.  ... Because  it's a  state program,                                                                    
     we  are able  to use  state authorities  to make  those                                                                    
     kinds  of  risk-based   decisions  about  a  discharge.                                                                    
     [With the] EPA  (indisc. - coughing) at the  end of the                                                                    
     pipe, you  have to  meet our  numeric standards  or you                                                                    
     don't get  a discharge.  ... There'd  be no  ability in                                                                    
     this  state   at  all   for  seafood   processors,  for                                                                    
     municipal  treatment  plants,  for any  of  the  permit                                                                    
     holders  to  discharge  if the  state  were  not  able,                                                                    
     through  the 401  part of  the permit  process, to  use                                                                    
     those site-specific and risk-based tools.                                                                                  
                                                                                                                                
     So our  permit applicants  are now,  basically, needing                                                                    
     two permits -  they need to get a federal  permit and a                                                                    
     state permit;  it's the state  permit which  gives them                                                                    
     the tools  that they  need to  operate, [and]  it's the                                                                    
     state   permit  that   protects  state   water  quality                                                                    
     standards.  The federal  permit is simply a placeholder                                                                    
     until  the state  is able  to  take responsibility  for                                                                    
     this program.                                                                                                              
                                                                                                                                
Number 1601                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA asked what the state will get in return for                                                                 
the money it spends in developing this program.                                                                                 
                                                                                                                                
REPRESENTATIVE OGG opined that that is a question that should be                                                                
asked in the House Finance Committee, not the House Judiciary                                                                   
Standing Committee.                                                                                                             
                                                                                                                                
REPRESENTATIVE GARA disagreed.                                                                                                  
                                                                                                                                
COMMISSIONER BALLARD, in response to questions regarding the                                                                    
notice provision of Section 5, said:                                                                                            
                                                                                                                                
     We've attempted, in this administration,  to get all of                                                                    
     our   notice  procedures   to   conform   to  the   ...                                                                    
     Administrative Procedure  Act (APA), so ...  this was a                                                                    
     conforming  change that  attempted to  do that.   As  a                                                                    
     practical  matter, the  department  generally has  more                                                                    
     notice  than  less  notice;  our  permits  tend  to  be                                                                    
     controversial and  they also tend to  be interesting to                                                                    
     many stakeholders.   The only  comment I guess  I would                                                                    
     have  for the  committee about  any proposed  amendment                                                                    
     here is,  if you do  change the language  here, perhaps                                                                    
     you could at least change  it to be consistent with the                                                                    
     other  language  which  went through  our  other  water                                                                    
     bill,  which has  already gone  through  the House,  so                                                                    
     that  at  least  we'd  have  consistent  public  notice                                                                    
     requirements within the department.                                                                                        
                                                                                                                                
CHAIR McGUIRE  observed that in  many small towns there  may only                                                               
be one publication.                                                                                                             
                                                                                                                                
REPRESENTATIVE GRUENBERG  clarified that  he wants the  notice to                                                               
be  published  twice,  that  it  must  appear  in  two  different                                                               
publications.                                                                                                                   
                                                                                                                                
MS.  BALLARD  suggested changing  "one  publication"  on page  3,                                                               
lines 26-27, to "two publications".                                                                                             
                                                                                                                                
Number 1836                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG made  a motion  to adopt  the foregoing                                                               
suggestion as Amendment  1.  There being  no objection, Amendment                                                               
1 was adopted.                                                                                                                  
                                                                                                                                
Number 1873                                                                                                                     
                                                                                                                                
JONATHAN   TILLINGHAST,   Lobbyist   for   Sealaska   Corporation                                                               
("Sealaska"),  said  Sealaska supports  HB  546,  and offered  to                                                               
answer questions from a regulated industry's perspective.                                                                       
                                                                                                                                
REPRESENTATIVE GARA  asked what activity  the state will  get via                                                               
passage of HB 546.                                                                                                              
                                                                                                                                
MR. TILLINGHAST replied that the  existing process costs Sealaska                                                               
a great deal of money that  it shouldn't need to spend because it                                                               
has to get two permits for a single activity.                                                                                   
                                                                                                                                
CHAIR McGUIRE  surmised that  Representative Gara's  question is,                                                               
what can Sealaska do better or differently if HB 546 is passed.                                                                 
                                                                                                                                
MR. TILLINGHAST replied:   "We will have more  money available to                                                               
spend on productive  economic activity in the state  of Alaska if                                                               
this bill  passes, because we won't  have to spend it  in Seattle                                                               
chasing EPA bureaucrats."                                                                                                       
                                                                                                                                
REPRESENTATIVE GARA,  expressing a desire to  understand the bill                                                               
before  moving it  from committee,  relayed that  his concern  is                                                               
whether passing HB 546 constitutes good policy.                                                                                 
                                                                                                                                
REPRESENTATIVE GRUENBERG turned attention to  page 5, lines 8 and                                                               
12, and pointed  out that the language in essence  reads in part:                                                               
"(b)  The department may modify  a permit ... for a permit issued                                                           
under a  federally approved program".   He suggested that  "for a                                                       
permit" should  be deleted so  that the language would  then read                                                           
in part:   "(b)   The department may  modify a permit  ... issued                                                           
under a federally approved program".                                                                                        
                                                                                                                                
Number 2074                                                                                                                     
                                                                                                                                
TERRY   THURBON,   Assistant  Attorney   General,   Environmental                                                               
Section,  Civil  Division  (Juneau),  Department  of  Law  (DOL),                                                               
replied:                                                                                                                        
                                                                                                                                
     The purpose for the modifier for a permit is to limit                                                                      
      this particular cause for modification to just these                                                                      
     federal Clean Water Act permits.                                                                                           
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  he understood  that concept,  but                                                               
reiterated  his belief  that as  currently  written the  language                                                               
appears to be duplicative.                                                                                                      
                                                                                                                                
CHAIR McGUIRE agreed.                                                                                                           
                                                                                                                                
MS. THURBON  indicated agreement as  well, and surmised  that the                                                               
error  might  have  occurred  because  of  the  use  of  residual                                                               
language  from when  the  [DEC]  was doing  much  more with  this                                                               
section of law.                                                                                                                 
                                                                                                                                
Number 2138                                                                                                                     
                                                                                                                                
CHAIR McGUIRE made a motion to  adopt Amendment 2, to delete "for                                                           
a  permit" from  page  5, line  12.   There  being no  objection,                                                           
Amendment 2 was adopted.                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG directed attention  to Section 3 on page                                                               
3, lines  4-10, and  opined that  a reading  of the  proposed new                                                               
paragraph does not indicate what  it modifies.  He suggested that                                                               
they make  a technical  amendment for the  purpose of  having the                                                               
forthcoming CS contain that information.                                                                                        
                                                                                                                                
MS. THURBON  said she had no  objection to that, adding  that the                                                               
statute being  amended by Section  3 is  merely a list  of powers                                                               
and  duties  the  DEC  has  and  starts  with  the  phrase,  "The                                                               
department may".                                                                                                                
                                                                                                                                
CHAIR McGUIRE  surmised that  an amendment  would not  be needed;                                                               
rather, committee staff  could simply ask the  drafter to include                                                               
that information in the forthcoming CS.                                                                                         
                                                                                                                                
REPRESENTATIVE GARA  asked whether the  DEC will be able  to pass                                                               
on the  costs for implementing  the program onto those  that will                                                               
be getting the permits.                                                                                                         
                                                                                                                                
MS.  THURBON  said  they  are anticipating  user  fees  from  the                                                               
industry,  since the  bill  contains a  provision  that says  the                                                               
department's authority to  collect user fees would  apply to this                                                               
program.                                                                                                                        
                                                                                                                                
Number 2246                                                                                                                     
                                                                                                                                
DAN   EASTON,   Director,   Division  of   Water,   Division   of                                                               
Environmental  Health, Department  of Environmental  Conservation                                                               
(DEC), explained  that the DEC  charges an annual  fee associated                                                               
with   log   transfer  facility   permits,   and   that  of   the                                                               
approximately $130,000  annual cost  of implementing  the primacy                                                               
program, the DEC anticipates recovering about $30,000.                                                                          
                                                                                                                                
REPRESENTATIVE  GRUENBERG directed  attention to  Section 4,  and                                                               
asked  why they  were  eliminating the  60-day period  referenced                                                               
therein.                                                                                                                        
                                                                                                                                
MR. EASTON replied:                                                                                                             
                                                                                                                                
     This  is  a  conforming  amendment.  ...  In  order  to                                                                    
     qualify  for primacy,  we  would have  to  use the  EPA                                                                    
     regulations.  The EPA regulations,  instead of 60 days,                                                                    
     require 180  days notice prior to  commencement, so ...                                                                    
     this  would  go  out  of state  statute  and  would  be                                                                    
     replaced  in  regulation  ... with  a  regulation  that                                                                    
     conforms  to federal  regulation that  requires 180-day                                                                    
     prior [notice].                                                                                                            
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked  about emergency  situations  in                                                               
which an entity claims it needs to discharge immediately.                                                                       
                                                                                                                                
MR.  EASTON opined  that such  would not  arise because  entities                                                               
that seek  permits to discharge  can plan ahead and,  thus, would                                                               
be capable of complying with the 180-day requirement.                                                                           
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked whether it  would be a  good idea                                                               
to reference,  in Section  4, either  the 180-day  requirement or                                                               
the federal  regulations, because, as written,  Section 4 appears                                                               
to take away all time-period requirements.                                                                                      
                                                                                                                                
TAPE 04-67, SIDE B                                                                                                            
Number 2374                                                                                                                     
                                                                                                                                
MS. THURBON said the purpose  of striking out the 60-day advanced                                                               
filing  deadline  rather than  substituting  180  or a  range  of                                                               
different dates  for different  programs is to  allow the  DEC to                                                               
use  its regulations  to  set deadlines  for  advanced filing  of                                                               
[permits]  according to  the nature  of the  program.   She added                                                               
that  AS 46.03.110(a),  which  is being  altered  via Section  4,                                                               
applies to a  broad universe of waste  disposal permits including                                                               
those in which  the department might need only  a 30-day advanced                                                               
filing  deadline.   Deleting the  language specifying  the 60-day                                                               
advanced  filing   deadline  would   allow  the   DEC  regulatory                                                               
flexibility.   In  response to  another  question, she  explained                                                               
that Section  3 would grant  the DEC the authority  to promulgate                                                               
regulations for this particular program.                                                                                        
                                                                                                                                
REPRESENTATIVE GARA,  regarding Mr. Tillinghast's  comments about                                                               
the  extra expense  of the  current  permitting procedure,  asked                                                               
whether the  current procedure also results  in substantial delay                                                               
[of projects].                                                                                                                  
                                                                                                                                
MR.  TILLINGHAST  said it  can  involve  substantial delay.    He                                                               
elaborated:                                                                                                                     
                                                                                                                                
     At  the present  time, our  primary facilities  that we                                                                    
     get permits for  have a general permit.   But it's also                                                                    
     possible in the future, and  has been true in the past,                                                                    
     that we have to get  individual permits.  And [the] EPA                                                                    
     has, at times, just refused  to issue them because they                                                                    
     don't have the staff to  process them, which leaves the                                                                    
     industry,  particularly if  it's an  existing facility,                                                                    
     in  [the] difficult  situation of  deciding whether  to                                                                    
     continue  operations unlawfully  -  because they  don't                                                                    
     have a permit  - or whether to shut down.   It puts the                                                                    
     discharger  in a  difficult situation,  and that's  not                                                                    
     something unique to the timber  industry; [the] EPA has                                                                    
     its priorities in the state,  and naturally their major                                                                    
     facilities  -   primarily  oil   and  gas   and  mining                                                                    
     facilities - is where they put their resources first.                                                                      
                                                                                                                                
CHAIR  McGUIRE, after  ascertaining that  no one  else wished  to                                                               
testify, closed public testimony on HB 546.                                                                                     
                                                                                                                                
Number 2269                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG  moved to  report HB 546,  as amended,  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  note.    There  being no  objection,  CSHB  546(JUD)  was                                                               
reported from the House Judiciary Standing Committee.                                                                           
                                                                                                                                

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