Legislature(2003 - 2004)
03/14/2003 01:03 PM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 160-EMISSION CONTROL PERMIT PROGRAM CO-CHAIR FATE announced that the first order of business would be HOUSE BILL NO. 160, "An Act relating to the emission control permit program; relating to fees for that program and to the accounting of receipts deposited in the emission control permit receipts account; and providing for an effective date." [HB 160 was sponsored by the House Rules Standing Committee by request of the governor.] Number 0134 ERNESTA BALLARD, Commissioner, Department of Environmental Conservation (DEC), testified, noting that John Kuterbach, Program Manager, Air Permits, Division of Air and Water Quality, and Tom Chapple, Acting Director, Division of Air and Water Quality, were present to answer questions but would have to leave later in the afternoon due to another commitment. COMMISSIONER BALLARD talked about Governor Murkowski's commitment to enhancing Alaska's economy through resource development and his equal commitment to protecting Alaska's environment. She said it is not an either/or proposition; a strong economy will generate the revenue base to continue funding the important regulatory programs. COMMISSIONER BALLARD said that without a strong economy, one cannot hope to have a strong government. She explained that over the last 30 years, [the state] has learned much about the environmental and health hazards associated with air pollution; much had also been learned about emission-control technologies, air modeling, and the need for and nature of ambient air- protective standards. Through national and state legislation, the shared value for environmental protection for citizens has been recognized, along with many other core values that form the framework for government regulatory programs. Environmental protection is not incompatible with resource development, she suggested; rather, it is as fundamental a component of resource development as are labor and worker safety laws. Number 0335 COMMISSIONER BALLARD said Governor Murkowski and members of his cabinet recognize that Alaska's laws form the framework for a successful resource development strategy. Environmental laws are one of the equally important pieces of public policy. She said this bill will improve the process and the function of underlying state policy to protect the environment. It does change the protective standards already in place and administered by the department through existing regulation, she explained. Through DEC's fiscal year 2004 (FY 04) budget, it intends to sharpen its focus on the core permitting and protection responsibilities. She said HB 160 is essential to achieving the results promised in [the governor's] budget proposal. COMMISSIONER BALLARD noted that she had made a commitment to the committee and each member personally to revisit [DEC's] core mission of developing protective standards and implementing them through efficient and fair regulations. She said this bill is essential to her success in that undertaking. Number 0423 COMMISSIONER BALLARD said this legislative proposal is based on two important developments of the several years. One was a benchmark study conducted in the department over the last two years; the study reviewed funding and workforce allocation in air programs of states that are considered comparable in workload and complexity to Alaska. States compared with Alaska were Colorado; New Mexico; California, which has two different air quality programs because they're organized in air districts; Oklahoma; Montana; Vermont; Washington; and Oregon. She said states with small populations were chosen, as well as states with resource development activities similar to [Alaska's], although there is nothing comparable to Alaska. Number 0494 COMMISSIONER BALLARD explained that it was felt that these states formed a similar benchmark group. Alaska has an unusual air [control] program, she explained. Although the state has a small population, it has a high number of air permits - as many operating permits as Colorado and as many new major permits as New Jersey. She explained that this is because Alaska doesn't have a power grid and thus has a far greater dependence on diesel generation and a modern, well-organized air program. It was discovered during the benchmark study that [DEC] hadn't funded, staffed, or organized the program adequately to do the job that the applicants expect. Commissioner Ballard said HB 160, and the program increase proposed by the department in the governor's budget, will allow DEC to remodel the permit program in line with the successful programs in other states. Number 0577 COMMISSIONER BALLARD explained that the second development that guided DEC's proposal for FY 04 and for the development of this legislation was the Air Permits Work Group, a stakeholder group convened by the department last year. The work group carefully reviewed DEC's program against the federal Clean Air Act and against the EPA [Environmental Protection Agency] rules that have been amended several times in recent years, establishing new programs and control concepts. COMMISSIONER BALLARD reported that the state permitting program hasn't kept pace with the national regime or with the needs of Alaskan communities and industries. Noting that the work group report is in the bill packet and that recommendations are incorporated into HB 160, she offered her belief that this bill will create a predictable, timely, and rational permitting program. It will allow the regulation of minor sources by standardizing permit conditions that are based on best management practices. For example, the department currently has a permit program that is a "self-management - implementing best practices program" for oil drilling rigs, and wants to expand it to include more situations. For Alaska's population size, there are many more mobile and portable plants and machinery than in most states. She said the [department] needs the tools to work with this unusual but essential fleet. The bill will also exempt sources from permitting to the extent allowed under federal law, and it will achieve efficiency through adopting several rules by reference. Number 0778 COMMISSIONER BALLARD said there are many changes that [DEC] is proposing to change the terminology in state statute; those are essential to reflect federal terminology. If a federal rule is adopted using a term of art and Alaska's statute uses a different term for the same thing, that rule can't be adopted easily; the [department] has to go through a more elaborate rule-making process. Commissioner Ballard said this is time consuming and does not give the advantage that "we believe our permitting applicant's deserve." The efficiency that [the department will achieve] will also make it easier for the permitting of rural power plants in the state's small, outlying Bush communities, she explained. She said the [department] will be able to use the so-called "clean unit test" to avoid what is done now, which is a detailed, site-by-site technology analysis. Number 0778 COMMISSIONER BALLARD addressed the fiscal note and said the bill itself does not warrant an increase in staffing; however, without additional staff as proposed in [DEC's] budget for FY 04, the important statutory changes that will be achieved through the legislation cannot be delivered because [the department] will not have adequate staff to implement them. In order to operate an air permitting program that issues timely permits, [DEC] has requested additional staff through the budget process, she explained. COMMISSIONER BALLARD said that, in the spirit of full disclosure, the entire permit increment was put in this fiscal note and the box was checked which stated that this amount is [included] in the governor's FY 04 proposal. Therefore, the fiscal note represents the cost for reinvigorating the entire air-permitting program for the state. She told members that while there is an increase in this very important program, other services in the department have been reduced, so that only services essential to [the department's] mission of protecting public health and the environment are being provided. With this increment, as well as several other small increases in core permitting programs, the department still has an overall net reduction of 13 full-time equivalent (FTE) employees and $153,000. She said she was pleased to bring forward a true example of what permit streamlining will look like. Commissioner Ballard told the committee that [HB 160] represents an effort to truly take advantage of "all of the tools in the federal tool box," to the benefit of state permit applicants. Number 0964 REPRESENTATIVE GUTTENBERG observed that the work group's final report was very helpful and informative. Number 1009 TOM CHAPPLE, Acting Director, Division of Air and Water Quality, Department of Environmental Conservation, testified, noting that Commissioner Ballard had given a good overview of the bill. He mentioned that there are a lot of changes in definitions that take advantage of the federal program. Mr. Chapple said the sectional analysis provides a helpful "walkthrough" of the bill. He offered to meet with committee members to help in their understanding [of the changes]. Number 1068 REPRESENTATIVE KERTTULA referred to changes in the definitions section and asked what's happening with stationary sources versus mobile sources. She also asked if the mobile sources are covered or if they are somehow removed from the permitting process. MR. CHAPPLE said the bill doesn't change the system. This bill and the permitting program are designed principally for stationary sources, he explained. Sources like oil drilling rigs, asphalt plants, or soil-remediation units move around and have been under state permit for a number of years, and will continue to be so. The cutoffs for the size of the facility that will be permitted won't change; however, some of those currently listed in the "major source" category will be moved to the newly created "minor source" permitting program for which there is hope to accomplish more streamlining. REPRESENTATIVE KERTTULA observed that "reconstruction" doesn't seem to be included in the list of permits requiring a construction permit. Therefore, she asked how reconstruction situations will be addressed. She asked whether it will be picked up in federal language. MR. CHAPPLE deferred to Mr. Kuterbach. Number 1223 JOHN KUTERBACH, Program Manager, Air Permits, Division of Air & Water Quality, Department of Environmental Conservation, explained that the term "reconstruction" wasn't used because it isn't found in federal law for major source permits. Under federal law, "reconstruction" is used to qualify changes at a facility as a new facility. Therefore, the concept of reconstruction would be carried through, although the term itself wouldn't. REPRESENTATIVE KERTTULA asked if the lack of the term "reconstruction" would result in any change in the current manner in which review occurs. She asked, "Would we drop anything out?" MR. KUTERBACH answered that currently reconstruction at the federal level is under review, and some of the recently adopted federal rule changes were intended to clarify what is reconstruction versus routine maintenance. The state would follow suit with those federal changes, and thus that change would be reflected in the state's program. In further response to Representative Kerttula, Mr. Kuterbach explained that a reconstruction is a replacement of components at a facility without necessarily increasing emissions. However, a modification is an increase in emissions, and thus the [department] would continue to regulate the modifications. Number 1354 REPRESENTATIVE KERTTULA turned to Section 23, which says adjudicatory hearings will only be allowed if a public hearing process is required or solicited. She asked if anything is being lost with the aforementioned language. MR. KUTERBACH specified that current law provides that anyone who wanted to appeal a decision made by the department [on a permit] must have provided comment during the time a permit was out for public review. He pointed out that another part of HB 160 gives the department discretion for minor sources for which the department may choose not to have a public review. Therefore, Section 23 specifies that [the department] isn't removing the right of an individual to appeal a departmental decision if there wasn't a comment period. Number 1539 TADD OWENS, Executive Director, Resource Development Council (RDC), began by informing the committee that RDC is a statewide nonprofit trade association that represents Alaskan individuals and companies in the mining, oil and gas, timber, tourism, and fisheries industries. The mission of RDC is to help grow Alaska's economy through the responsible development of the state's natural resources. Mr. Owens said that while RDC didn't formally participate in the work group referenced by Commissioner Ballard, several of RDC's members were directly involved in the process. MR. OWENS reported that RDC is very pleased that the administration and DEC have come forward with this legislation, which is the implementation of many of the work group's recommendations. The RDC believes that HB 160 is a very important part of a comprehensive effort to streamline the state's permitting regime. He noted that RDC has worked closely with DEC and the legislature over the years in regard to streamlining fees and making permit fees more predictable. Furthermore, RDC has worked to move permitting toward general permits based on best management practices, as well as to move the agency toward consistency with federal requirements. As has been stated, HB 160 achieves progress on all of the aforementioned fronts, he told members. Therefore, RDC strongly supports HB 160. Number 1662 CHARLOTTE MacCAY, Member, Air Permits Work Group, began by informing the committee that the work group emphasized the need for air permitting that is more simplified, timely, and predictable. This legislation removes the necessary obstacles in order to allow DEC to follow the work group's recommendations. However, the work to reconstruct is yet to be done, and the (indisc.) will help enable this process to continue. Ms. MacCay noted that DEC has been very open and receptive to the outside suggestions that the work group has been making. She related her belief that following the work group's recommendations DEC will be able to maintain a high level of protection while concurrently making air permitting more attractive to developers and industry. Number 1724 MARILYN CROCKETT, Deputy Director, Alaska Oil & Gas Association (AOGA), noted that AOGA is a trade association whose members represent the majority of the oil and gas activity in the state. She informed the committee that AOGA was a participant in the work group process and supports the recommendations coming out of that process. Ms. Crockett mentioned that AOGA is in the process of thoroughly analyzing HB 160 and was recently involved in a meeting held by DEC to discuss the intent behind the changes, which AOGA supports. She said DEC has done a good job putting down on paper the changes necessary to get the state's program to look more like a federal program, to make it easier to administer, and to reduce the burden on the department as well as the permittees. From that perspective, Ms. Crockett said that AOGA supports the intent of HB 160, although it will continue to review it and participate in future hearings. Number 1862 REPRESENTATIVE KERTTULA directed attention to Section 17, page 9, and relating her understanding that it deletes the portion of the statute requiring the permit to be issued before operation. Furthermore, Section 17 seems to allow a 12-month operation before obtaining a permit for stationary source. She asked if that's correct, or whether another section in federal law requires that the permit be obtained before operating. MR. KUTERBACH explained that the current federal law for major operating permits doesn't require that the permit be issued before the source can begin operation; rather, it allows for 12 months of operation to issue the permit. The federal major- source operating permit does not authorize new pollution, but merely collects existing requirements into a legal document. [Alaska's] current statute established an additional deadline - beyond federal law - for application for an operating permit, not for issuance of an operating permit. MR. KUTERBACH said the proposal is to eliminate the additional application deadline that is currently in statute but not in federal law, because with the change to the minor source program, virtually all the major source operating permit facilities first will have to obtain a construction permit. Therefore, there is no need for an advanced application deadline for those facilities. In further clarification, Mr. Kuterbach specified that any entity [in those classified facilities] that is [producing] new pollution will have to obtain either a major or minor permit; for those, the authorization would be before the new pollution happens. For an existing, operating minor source, the department doesn't see the need to have that [authorization] before operation. Number 2031 REPRESENTATIVE KERTTULA highlighted that a construction permit would have to be obtained before building the plant. The [department] is just addressing the operating aspect for the air. MR. CHAPPLE said that is true. He pointed out that in Alaska [a source of pollution] that is large relative to the amount of pollution a year is required to obtain a permit, while [smaller entities relative to the amount of pollution] aren't required to do so. He explained that every state is obligated to determine what size of sources will cause an air quality problem. He related that in California, small sources of pollution such as lawnmowers and household furnaces are regulated, while Alaska's regulation targets larger sources of pollution. For those sources that look large enough to necessitate obtaining a permit [under the existing statutes], under the proposed changes the construction permit would still be required, as would the operating permit. Number 2087 REPRESENTATIVE MASEK referred to a memorandum from the commissioner of [DEC], which she quoted as follows: "Our state permitting program has not kept pace with the national regime or the needs of the Alaskan community or the industry." She asked about the size of the backlog with this permit program. MR. CHAPPLE answered that the department hasn't been able to issue permits in the timeframe that it believes to be responsible for business or community needs. In a multi-year average for a construction permit, it takes 254 days to issue a permit. The department believes that those permits should be issued in 90-110 days. Furthermore, the EPA has notified Alaska that Alaska isn't meeting the schedule for the relatively new federal requirement for operating permits. He noted that the department is under a commitment to complete all outstanding permits by November 2003. Alaska is one of several states that are lagging behind. Number 2180 REPRESENTATIVE MASEK asked what industries HB 160 would impact beyond the construction industry, the oil industry, and the rural power plants. MR. CHAPPLE said Representative Masek had identified the largest entities impacted by this legislation. He pointed out that most facilities in Alaska burn fuel and thus cause a large enough emission to require a permit. He noted that all of the rural hubs have power plants large enough to be identified as major sources. The smaller rural communities are a mixed bag. He mentioned that any significant seafood processing plant has diesel-powered generators and other heat sources. Most mines in Alaska have to generate their own power, and thus mines have large enough power plants to require permits. He said that Mr. Kuterbach could describe the size of communities that are generally small enough that a permit isn't required and those communities that are large enough and thus require a permit. REPRESENTATIVE MASEK asked if, after the passage of HB 160, Alaska would face any federal Clean Air Act or EPA rules and thus more changes to the existing law would be required. MR. CHAPPLE answered that the statutory changes have been reviewed [and constructed] such that the statute would provide the ability to adopt federal regulations and do so in a streamlined manner. He related his expectation that there will be other federal regulation changes. For instance, there are a number of industrial classifications that the EPA will be reviewing due to its obligation under the Clean Air Act. Some of those industrial classifications will impact sources in Alaska. Therefore, there will be new federal rules, he said. Number 2315 REPRESENTATIVE GATTO highlighted that the word "contaminant" had been replaced by the word "pollutant". He asked about the definition of pollutant. MR. KUTERBACH explained that the federal definition is that pollutants are basically those compounds regulated under the Clean Air Act. He said [the federal government regulates] pollutants; he mentioned that there are six actual compounds, and indicated 189 hazardous air pollutants are listed in the Act. Thus [pollutants] are a well-defined set of chemical compounds. Number 2395 REPRESENTATIVE GATTO inquired as to what happens as more [pollutants] are discovered. For example, if an individual generates a pollutant that has never been identified, would that pollutant have to be added to the list and be approved, and meanwhile, could the pollutant be generated freely until added to the list? Or is the pollutant covered until it's excluded? MR. CHAPPLE responded that the statute would allow the department to adopt changes that are necessary when the EPA has defined a new pollutant. Mr. Chapple said, for these 189 hazardous air pollutants, that the EPA hasn't set what are safe or hazardous levels to breathe, which it has for pollutants such as sulfur dioxide and carbon monoxide. He explained that sometimes the EPA takes a different approach: it suspects a compound to be a carcinogen and there is fairly good medical data to show that it's a carcinogen, and thus the EPA establishes emission limitations for certain types of operations that emit or process that [carcinogen]. When the EPA adopts those new emission rules, this statute and the existing law would allow Alaska to implement those requirements because they are federally mandated and the state is obligated to implement them. That would occur without another statutory change, he noted. MR. CHAPPLE highlighted that if Alaska is going to do something different from federal law, there is a provision in current law that places certain requirements on the department to show that there is a compelling scientific need to do it and that the work done by the department is peer-reviewed by another entity before an action is taken. Number 2523 REPRESENTATIVE GUTTENBERG turned to Section 30 and asked how Title 5 defines "small business." MR. CHAPPLE answered that generally "small business" is defined as 25 employees or less, and there may be other requirements linked to the definition. He noted that current statutes and this legislation provide certain free services for small businesses. When the statute was adopted originally in 1993, he said Alaska thought it was necessary to have the small-business assistance program efforts available for small rural communities; however, most rural communities don't qualify because they are a government [entity]. Number 2600 REPRESENTATIVE WOLF moved to report HB 160 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 160 was reported from the House Resources Standing Committee.
| Document Name | Date/Time | Subjects |
|---|