Legislature(2003 - 2004)
04/16/2004 01:20 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ 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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