Legislature(2013 - 2014)BARNES 124
03/18/2013 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB158 | |
| SB27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 21 | TELECONFERENCED | |
| + | SB 27 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 158 | ||
SB 27-REGULATION OF DREDGE AND FILL ACTIVITIES
1:10:54 PM
CO-CHAIR SADDLER announced that the next order of business would
be SENATE BILL NO. 27, "An Act establishing authority for the
state to evaluate and seek primacy for administering the
regulatory program for dredge and fill activities allowed to
individual states under federal law and relating to the
authority; and providing for an effective date."
CO-CHAIR SADDLER pointed out that SB 27 is identical to HB 78,
which the committee heard on February 1, 2013.
1:12:10 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), introduced himself. He stated he previously
testified on February 1, 2013, on HB 78, which is identical to
SB 27. He recapped his testimony, noting he had presented
reasons that the Clean Water Act (CWA) Section 404 permitting
program is very important to Alaska. Additionally, Commissioner
Sullivan specifically spoke to how it fits in with the
administration's broader efforts to make permitting actions more
efficient and predictable. Lastly, he had briefly discussed the
fiscal impact of HB 78.
COMMISSIONER HARTIG said the Section 404 permitting program
(404) is one of two big Clean Water Act (CWA) programs, with the
other being the Section 402, Wastewater Discharge permitting
program (402) for which DEC recently obtained primacy. The 404
program is sometimes called the dredge and fill program or
wetlands program. The 404 program pertains to the permitting of
fill material being placed into U.S. waters, including wetlands.
Since Alaska has 174 million acres or 65 percent of the nation's
wetlands, this program is critical to the state. Basically,
most large permitting projects require 404 permits.
1:14:03 PM
COMMISSIONER HARTIG stated that the 404 program is currently
administered by the U.S. Army Corps of Engineers [Corps] with
the U.S. Environmental Protection Agency's (EPAs) oversight, but
the Clean Water Act specifically provides for state to take
primary enforcement responsibility or primacy over that program.
COMMISSIONER HARTIG reviewed the steps that would be needed for
the state to administer the program and obtain primacy. He
explained the process to develop an application as rigorous as
the 404 and to develop a program that contains the essential
elements of the federal government's program. While the state
doesn't change the rules, it can set its own priorities,
determine what permits go first, and with the legislature's
support obtain sufficient resources to give timely turnaround on
permit applications. He anticipated, based on the Section 402
application, that it will take several years to develop the
Section 404 application.
COMMISSIONER HARTIG related the EPA will review the Section 404
application and decide whether to grant the state primacy,
similar to the Section 402 process. However, if the state does
receives primary, it does not mean the state will issue all of
the Section 404 permits in the state since a geographic
limitation exists for the program. The DEC would not obtain
primacy to issue 404 permits in which fill material is going
into tidally-influenced waters, waters that are or could be used
for interstate and foreign commerce, and wetlands adjacent to
those waters. This means the DEC anticipates significant
dialogue with the Corps and the EPA with respect to the
interpretation and application of terms and to build a consensus
on exactly what areas of the state and permits within those
areas that the state would take primacy.
1:16:05 PM
COMMISSIONER HARTIG pointed out two components of SB 27. First,
one component is the aforementioned primacy for the permitting
program. Second, the final component is for the state to work
with the Corps to evaluate and issue state programmatic general
permits. These permits authorize dredge and fill operations,
but are more limited in terms of the nature of the activity that
is being permitted, including those similar in nature with
minimal cumulative impacts. Thus the DEC could issue one permit
and different permittees could ask to be authorized under that
general permit without having to pursue their own permit.
COMMISSIONER HARTIG recapped that the state has the opportunity
not only to pursue primacy, but also to pursue efforts through
the Corps for authority to administer the general permits.
These two components of the bill are not mutually exclusive.
COMMISSIONER HARTIG said lastly the department discussed the
importance of the 404 program to the state. Given the
substantial wetlands in Alaska, many projects require Section
404 permits. The state has the ability to control its own
destiny in terms of prioritizing permits. Delays to large
permitting projects often result in substantial costs to the
project. The ability to competently and quickly respond to
permit applications is essential. Additionally, it's essential
to have the permitting staff close to the permittees to answer
questions, as well as to be held accountable to the legislature
and the public, which are all critical elements to consider when
building a responsive program.
1:18:15 PM
COMMISSIONER HARTIG turned to the fiscal impacts.
Unfortunately, the department currently cannot provide details
because it depends on the contingencies set by the Corps and
what programmatic general permits will be developed. However,
the department can provide information on the resources and
costs to administer a program to evaluate the costs and benefits
of primacy and prepare an application for a program since the
DEC has done so with the Section 402 program application.
COMMISSIONER HARTIG related that by fiscal year 2016, the DEC
anticipates it will know what the program would consist of and
the department will consult with the legislature prior to
creating its 404 program.
1:19:29 PM
REPRESENTATIVE SEATON recalled the committee previously asked
how many U.S. Army Corps of Engineers' staff or other federal
staff currently work on 404 permits within Alaska.
COMMISSIONER HARTIG recalled the Corps has 49 staff located in
Alaska, but was unsure how many of the agency's staff currently
works on permitting. Many of the permits are in geographic
areas that would be excluded from the program under primacy.
1:20:28 PM
MICHELLE BONNET HALE, Director, Division of Water, Department of
Environmental Conservation (DEC), stated that the Corps has 49
employees and a budget of less than $8 million for the agency's
Section 404 permitting activity; however, she did not have a
precise breakdown of the permitting activities. As the
commissioner stated, the state does not know what percentage of
the program the DEC would be able to assume from the Corps.
Hence she was uncertain of the number of positions the state
will need for the program. She felt relatively certain the
staff would not be more than 49, but she was unsure how much
less than 49 would be necessary to conduct the program. In
response to Representative Tuck, she answered that the Corps
estimated the backlog for permits is 50 or 50 plus applications.
1:21:54 PM
REPRESENTATIVE TUCK asked whether the director could find out
how long it currently takes applicants to obtain Section 404
permits from the Corps, noting the time for the state to process
could vary. He wondered how the state would be able to reduce
the permitting time by obtaining primacy.
MS. HALE agreed to request the staff information from the Corps.
1:22:27 PM
CO-CHAIR SADDLER asked for the source of the delay and whether
it is from a delay in the permitting process or a delay in the
National Environmental Policy Act of 1969 (NEPA) process.
MS. HALE offered to speak to some of the delays that are
occurring in the permitting backlog. One thing has been that
the Corps has experienced significant reductions in staff and
budget, which has seriously impacted the agency's ability to
issue permits. In terms of the delays in the NEPA process, she
deferred to Mr. Crafford.
1:23:18 PM
TOM CRAFFORD, Director, Office of Project Management &
Permitting, Department of Natural Resources (DNR), said he could
not currently provide details, but pointed out that the 404
permit is basically "the" federal permit for most resource
development projects, which means the Corps is the de facto lead
agency for the NEPA process. Meanwhile, the Corps has
experienced staff reductions, which means this is potentially a
growing issue due to the agency's [reduced] capacity to handle
the workload. Previously, the responsibility had fallen on the
EPA to issue wastewater discharge permits under Section 402 of
the Clean Water Act. He reminded members the state received a
phased implementation of primacy for Section 402 permitting,
which was completed last year.
[MS. HALE nodded yes.]
MR. CRAFFORD remarked that the state needs the Corps to shoulder
an additional burden at a time when the agency is experiencing
staffing and budget reductions.
1:25:15 PM
REPRESENTATIVE P. WILSON understood the federal cuts took place
before sequestration.
MR. CRAFFORD agreed that the department heard about the budget
cuts prior to sequestration. He added that the cuts and staff
reductions have disproportionately been occurring at the higher
levels within the organization, which represents an additional
concern. Some senior staff that the department has regarded as
being the most experienced U.S. Army Corps of Engineer's staff
in Alaska have either retired or moved elsewhere.
1:26:19 PM
REPRESENTATIVE SEATON turned to the regional general permits,
pointing out his district has 70 miles of gasline in Homer and
an additional 9 miles to construct in Kachemak City. He asked
whether the state feels the general permits are not currently
being issued. He related that, in his experience over the last
two years, the general permits have been available. He
understood that the reviews typically happen in the winter, and
he recalled Homer and Kachemak City experienced a nine month
process. He asked for further clarification.
MS. HALE stated that the way she envisioned the statewide
general program permit would work will be to add to the general
permits administered by the U.S. Army Corps of Engineers
(Corps). However, the state and Corps could work together to
issue a statewide programmatic general permit, with the state
actually administering the permit. First, the joint process
would provide the DEC the ability to learn the program by
working with the Corps. Second, it would also help DEC
administer the general permit and take advantage of some of the
efficiencies that DNR and DEC have already implemented as part
of the permit reform, for example, with some of the online
permitting application systems.
1:28:17 PM
REPRESENTATIVE SEATON asked whether the state is currently
unable to do this without having primacy. He recalled the
general permit process in the Homer area, which seemed to work
fairly well.
MS. HALE answered the way the statewide programmatic general
program currently works, including the state's coordinated
effort with the Corps, does not require the state to have
primacy. She characterized it as being a two-fold approach.
One, both agencies assume primacy for the program overall, while
the agencies continue to plan to work with the Corps on issuing
statewide general programmatic permits. Additionally, the state
will have the potential opportunity to work with the Corps to
develop statewide programmatic general permits for common
activities such as addressing the backlog in placer mining
permits and for shale oil permits, if shale oil takes off.
1:29:17 PM
REPRESENTATIVE SEATON understood the state does not have to have
primacy to issue statewide general permits or regional general
permits.
MS. HALE answered that the DEC is not currently proceeding with
that issue right now, but it is part of the work which will
occur if the bill passes.
1:29:41 PM
CO-CHAIR SADDLER clarified that under the bill the state DEC
would be to pursue primacy as well as state programmatic general
permitting program.
MS. HALE answered that is correct. The idea would be to pursue
both at the same time, with significant benefits to pursue the
statewide general programmatic permits at the same time as
primacy. In the first place, it would benefit applicants, since
they would have a shorter turnaround time on permits. Secondly,
the DEC would have an opportunity to learn a lot about the
program, which would also benefit the application process.
1:30:21 PM
MR. CRAFFORD added one important point to remember is that
general permits, whether the permits are state general
programmatic general permits, nationwide, or regional general
permits, have an underlying premise is that the adverse impacts
are individually and cumulatively minimal; however, while
minimal is not a defined term, it is clear the general permits
apply to a recurring type of activity, which is of a lesser
level of impact. He stated that many large development projects
will not be eligible for a general permit. Additionally, one
real advantage of the general permits is they are applicable for
lands the state could be eligible to receive primacy for and the
lands that the federal government would have to retain primacy.
Therefore the general permits are not geographically limited,
which is one of the reasons why the state is simultaneously
considering primacy and opportunities to assume these general
permits under a state programmatic general permit.
1:31:47 PM
REPRESENTATIVE SEATON asked for a reference in the bill that
identifies the authority the agency has to issue general permits
or a reference to indicate the DEC does not currently have the
authority to issue a general permit.
MS. HALE answered that DNR has the authority now to pursue
statewide programmatic general permits. This bill would provide
the DEC with the resources to do so.
1:32:19 PM
REPRESENTATIVE TARR recalled Dave Casey, Supervisor, Kenai and
Juneau Field Offices, Regulatory Division - Alaska District,
testified before the joint Administrative Regulation Review
Committee that 62 percent of the Corps' permits are general
permits, of which 85 percent are processed in less than 60 days.
The remaining 37 percent pertain to individual permits, with 70
percent processed in less than 120 days. She did not recall Mr.
Casey mentioning a significant backlog, but those were the time
periods for permits to be issued on a completed application.
She asked for clarification on where the backlog exists.
MS. HALE answered that the figure of 50 plus backlog is a figure
she received in communication with the Corps; however, she
acknowledged that she doesn't have the precise figures.
REPRESENTATIVE TARR related the Corps made over 1,100 decisions
last year.
1:33:36 PM
MR. CRAFFORD added that over the past five years the Corps has
averaged over 1,536 actions per year, which means for both
general permits and individual permits. He explained that the
summary statistics merit more attention because in the
permitting process for the Section 404 permits, the actual
application or submittal of a completed application precedes the
approval. In fact, a substantial work is performed on what is
deemed to be a completed application. He recalled reviewing
some statistics dating back to 2008 that indicated approximately
700 days and $277,000 are spent in obtaining a completed
application, therefore, the statistics don't really reflect all
of the time necessary to achieve a completed application.
MR. CRAFFORD indicated beyond that some of the real difficulties
which have arisen have not been made in reference to the overall
suite of permits, but rather to some specific projects that are
of real significance to the state. For example, the CD-5
[ConocoPhillips Alaska, Inc.'s drill site inside the National
Petroleum Reserve] experienced a delay of several years
resulting in considerable costs.
1:35:51 PM
CO-CHAIR SADDLER referred to some information in members'
packets indicates one of the benefits to the state is that
activities would not automatically trigger a National
Environmental Policy Act of 1969 (NEPA) process. He asked for
the average length of time for a wetlands dredge and fill
permit.
MR. CRAFFORD responded he did not really have a specific answer
because the NEPA process is really an open-ended process. When
specific steps occur, specific opportunities and durations for
comment periods are triggered; however, the actual NEPA process
takes as long as it takes. He offered his belief that the
durations for different projects would vary in accordance with
the complexity of the project.
1:37:03 PM
CO-CHAIR SADDLER asked for an approximate timeframe.
MR. CRAFFORD, generally speaking, answered that the NEPA process
is on the order of three years for a large development project.
1:37:27 PM
REPRESENTATIVE SEATON understood it takes a fairly long time to
obtain the submitted data to achieve a completed application.
He asked whether the state can reduce the timeframe.
MR. CRAFFORD answered no. He suggested that the intent of the
bill is to evaluate and determine whether the state could
provide those efficiencies. In essence, those are the types of
questions the state would seek to answer through this process.
1:38:32 PM
CO-CHAIR SADDLER requested the wetlands primacy placed in
context of where the state stands in terms of taking over
federal air and water quality.
MS. HALE offered to address the question from a water quality
aspect. The DEC recently received primacy for the fourth and
final phase of the Section 402 wastewater discharge permitting
program. However, it has been a little more than a decade since
the state began applying for that program. In October 2008, the
DEC received the first phase and the final three phases occurred
over the years. She described the process as an incredible
learning process for the state and perhaps for the EPA, as well.
She said the state has the experience in applying for and taking
on the Section 402 program, which puts the state in a good
position for pursuing the Section 404 program.
1:40:40 PM
CO-CHAIR SADDLER asked why this would put the state in a good
position.
MS. HALE answered that the experience of taking on a program of
this magnitude is a daunting task. She explained that to apply
for the program requires the state to write a very complete
program description and to outline the program in great detail,
plus to then implement the program, including hiring and
training staff. Having just gone through that process and
having transformed the program from a fledging program to the
mature one it is today, prepares the agency to take on another
big program, both in the application and in the actual program
implementation.
1:41:46 PM
REPRESENTATIVE TARR read from the Alaska Oil and Gas Association
(AOGA) letter in members' packets, "State primacy of dredge and
fill permitting, however, may pose administrative and financial
barriers unique to Section 404 assumption." Additionally, the
letter goes on to state, "The requirement that states assume the
entire dredge and fill program all at once can result in a
complex, lengthy and expensive process with no certainty that
EPA will approve the request." She also recalled an article
from the Alaska Journal of Commerce, during the time when state
was trying to take over the National Pollutant Discharge
Elimination System (NPDES) Permit Program, referenced the cost
to the permit applicants. The article indicated that the DEC
has estimated on average the costs for the permits would
increase by 80 percent. For example, if a company or
municipality now pays $1,000 for the state certification the
federal permit costs will increase to $1,800. She asked whether
the situation would be similar and if so, to estimate any cost
increases.
MS. HALE responded that it is very hard to tell at this point
what the cost would be, but she thinks that would be part of the
process, although she anticipated there might be some increase
in costs if the DEC is performing the bulk of the work rather
than certifying projects; however, without going through the
evaluation process, it is difficult to project.
1:43:25 PM
REPRESENTATIVE TARR asked whether it would be an extraordinary
situation to consider that costs could rise similarly by 80
percent.
MS. HALE supposed that was possible; however, she was unsure of
what it will take to issue the permits so she couldn't project
the cost to do so.
CO-CHAIR SADDLER recalled information in members' packets -
although he couldn't specify the location - which indicates that
while the individual permit application process might cost more,
the net result for streamlining and shortening the process would
result in less cost for the applicant. Even though the
permitting fees would increase, the overall cost of the process
would be lower.
1:44:24 PM
CO-CHAIR SADDLER added that a question arose with respect to the
end result of the evaluation process if the state prepares the
complicated application as to whether the EPA is obligated to
grant the state primacy.
COMMISSIONER HARTIG returned to the previous question. He
indicated one of the savings the department anticipates would be
achieved by not having to go through NEPA or the Endangered
Species Act (ESA) consultation. He stated that some reasons
exist to indicate there would be actual cost savings; for
example, obtaining permits more quickly translates into not
losing a construction season, which can result in substantially
lower costs. When it comes down to the decision point and
asking for the positions and funding to move forward, he
anticipated that industry will have evaluated the process and if
the industry disagrees with the department, they will let the
legislature know. However, he suspected the industry will
support the change.
COMMISSIONER HARTIG addressed the next question by stating that
when the state was granted primacy for the Section 402 program,
it went through an appeal to the Ninth Circuit Court of Appeal.
Just prior to Alaska receiving primacy, the State of Arizona
also received primacy. What the state learned is that if the
state's application is complete, EPA does not have discretion;
however, there is a lot of due deference given to the agency to
determine whether an application is complete and if the program
is a comparable program. Although it's written that the EPA
shall approve an application that is complete, it gets back to a
judgment call as to when the application is complete.
1:47:02 PM
RUTH HAMILTON HESSE, Senior Assistant Attorney General,
Environmental Section, Department of Law (DOL), agreed with
Commissioner Hartig, that there are nine criteria by which EPA
reviews an application for the Section 402 program and if the
state - any state - satisfies the criteria, they are entitled to
approval of their program. She characterized that some Section
402 criteria would pertain to the approval of Section 404
program; however, there is a lot of back and forth between the
state and federal agency as to whether the federal agency is
comfortable that sufficient information is in the state's
application to satisfy the criteria. While there is some
discretion, ultimately, if the state provides the information
that satisfies the criteria, the federal agencies are supposed
to approve it.
1:48:28 PM
CO-CHAIR SADDLER understood the Clean Water Act envisions or
intends for the state to take over the program. He asked for
clarification on efforts by the federal government to encourage
states to take on wetlands permitting.
COMMISSIONER HARTIG said he has not heard any concerted effort
by the Corps to get states to take on the Section 404 program.
He further said it doesn't surprise him that they are not lined
up to get in; in particular, for Western states with big
resource projects since they don't have a lot of wetlands. Thus
it makes sense to him that Alaska would be among the first
states to take over primacy of the program. He indicated he
considers the federal agency's reaction to date since they've
only known for a couple months that the state is considering
primacy. He offered his belief that the federal agencies have
been helpful in assisting the state to evaluate what it would
take. For example, he has a conference call scheduled on Friday
with DNR, DEC, an assistant attorney general, and the regional
administrator of the EPA, the head of the U.S. Army Corps of
Engineers in Alaska, and their senior program staff to review
what would be entailed in the application process. While he
does not see a national effort to get states to take over
primacy, he has seen a collaborative effort thus far in the
federal agency reaction to the state's potential application.
MS. HESSE added that several states have considered taking on
the program and have evaluated it in varying degrees of detail.
She thought there is ample opportunity for several states to
have had dialogue with the federal agencies on the Section 404
program.
1:50:51 PM
REPRESENTATIVE P. WILSON said the DEC's fact sheet of benefits
states that not taking primacy has consequences as the state
tries to build up its infrastructure and put citizens to work.
She asked the commissioner to elaborate.
COMMISSIONER HARTIG responded that he thinks the fact sheet
refers to a propensity of wetlands in the state and the number
of large projects in the state that will trigger Section 404
permitting, as well as NEPA and ESA consultation. Consequently
there are costs in terms of the complexity and potential delays
if issues are not handled expeditiously and efficiently. Thus a
lot is at stake in Alaska in terms of development of its natural
resources to ensure that the state has a good well-performing
Section 404 program. Due the declining federal budgets,
especially given the potential for less support for big resource
development projects in Alaska, the concerns over the Section
404 program become greater. Under the original CWA, the state
wanted to run its programs. At this juncture, it seems like the
state should at least take this opportunity to carefully
consider whether the current path of federal primacy is the best
recourse for the state. . He recommended the state consider
[the bill], given the need for more responsible resource
development in Alaska. He expressed confidence that the state
has the ability to take on the 404 permitting effort and do a
more efficient job over the long term.
1:53:11 PM
REPRESENTATIVE TARR recalled from the U.S. Army Corps of
Engineers' presentation in another committee, that even if the
state were to take over Section 404 permitting, the Corps would
still retain the jurisdiction for tidal waters in adjacent
wetlands, navigable waters in the adjacent wetlands, and
navigable waters under Section 10 [of the Rivers and Harbors Act
of 1899 (33 U.S.C. 403)]. She wanted to consider the
cost/benefit analysis since that would account for a substantial
amount of wetlands in the state and wondered if it would be
worth spending $10 million on an application. Further,
considering the DEC's 404 primacy, the state would add 18 new
positions, one of which wasn't funded this year, but is absorbed
by the department. She asked why this would be a good priority
for the department at this time.
MR. CRAFFORD responded that is why the process has been
structured as it is in this bill. He characterized this as
being an evaluation at this time. Accordingly, in terms of
primacy, the DEC would need to determine costs and positions
required and present the legislature with a fully fleshed out
program so the legislature could make an informed decision on
whether the Section 404 primacy is really worth it. Again, at
this point it is an evaluation to determine if the state wants
to pursue primacy.
1:55:14 PM
CO-CHAIR SADDLER asked to quantify the amount of wetlands in
Alaska that is tidally influenced and could be used for
interstate or foreign commerce.
MR. CRAFFORD responded the answer is unknown right now; however,
a disproportionate number of permits are in the coastal areas
due to the population. Considering the area the state could
assume primacy, it's important to consider the permitting
workload. To a degree, that's part of the evaluation, which is
to figure out the scale.
CO-CHAIR SADDLER referred to a letter in members' packets from
the Alaska Oil and Gas Association (AOGA) dated February 4, 2013
that states "We applaud the administration's spoken objective to
also pursue shared general permitting responsibility in
navigable waters." He asked whether state programmatic general
permitting authority would apply to coastal non-assumable
waters, subject to interstate and foreign commerce.
MR. CRAFFORD answered indeed it would if the state received
state programmatic general permitting authority as that would
not be geographically limited. Thus it would apply to lands for
which the federal agencies would have retained primacy as well
lands would be eligible for primacy in the state.
CO-CHAIR SADDLER understood these are answers obtained from the
evaluation process.
1:57:08 PM
REPRESENTATIVE SEATON referred to a December 2012 study
entitled, "Study of the Costs and Benefits of the State
Assumption of the Federal [Section] 404 Clean Water Act
Permitting Program." This report from the Virginia Department
of Environmental Quality reads, "Currently only two States have
assumed the § 404 program within their borders and this is due
mainly to the prohibitive costs and complexities involved with
the assumption process." He related when stakeholders were
polled they believed the cost outweighed the potential benefits.
He asked whether DNR has reviewed the feasibility study. In
response to a question, he reiterated the excerpt from the
study.
CO-CHAIR SADDLER asked for a copy for committee members.
REPRESENTATIVE SEATON agreed to provide it to members. [provided
soon thereafter in committee].
1:58:55 PM
MR. CRAFFORD responded he is aware of the document and that the
state of Virginia recently went through a similar process. The
DNR is in the process of evaluating the similarities and
differences between other state's experiences and Alaska's
circumstances. In fact, Deputy Commissioner Lynn Kent [DEC], is
traveling to a conference of the Association of State Wetlands
Managers. The degrees that the state experienced in terms of
state primacy will be one of the topics discussed. He offered
his belief one of the organizers is the architect of the
aforementioned report.
MR. CRAFFORD further anticipated that the bulk of wetlands in
Virginia would be in the coastal areas the state would not be
eligible to obtain primacy. To a great extent, wetlands in
Alaska are more widely distributed within Interior Alaska. He
anticipated that would be a major difference between Virginia
and Alaska.
2:00:39 PM
REPRESENTATIVE SEATON referred again to the Virginia document,
and read, "Virginia's existing SPGP [general permit] provides
many of the benefits identified as potential benefits of Section
404 assumption without the costs associated with assumption."
Specifically, in lieu of assuming Section 404, Virginia is
suggesting it has the ability to proceed with the statewide
permit assumption, just as Mr. Crafford suggested the state
would have the ability to proceed with the statewide general
permits.
[MR. CRAFFORD nodded yes.]
2:01:16 PM
REPRESENTATIVE SEATON turned to the definitions and pointed out
the Corps states that "ephemeral streams" fall under the
category of non-navigable and not relatively permanent
tributaries and following the U.S. Supreme Court decision in
Rapanos v. U.S. [547 U.S. 715 (2006)] and Carabell v. United
States [Army Corps of Engineers 391 F.3d 704 (2004)] fall under
federal jurisdiction when they have a significant nexus to
traditional navigable waters. This means that streams which do
not even flow year round, primarily runoff, will still be under
federal jurisdiction according to those two U.S. Supreme Court
decisions. Therefore the amount of territory affected might be
smaller than anticipated.
2:02:09 PM
CO-CHAIR SADDLER said his experience with wetlands issues is
that there are a lot of attorneys involved. He related his
understanding that one of the benefits to having the state
assume primacy is such questions would be decided in state
jurisdictions rather than federal jurisdictions.
MS. HESSE responded the Rapanos v. U.S. [547 U.S. 715 (2006)]
that Representative Seaton referenced is still being teased out
today in terms of the guidance with respect to the two major
opinions. In essence, deciding what would be considered federal
waters may not be as "cut and dried" for the state's primacy
program, in terms of what would be tidally influenced navigable
waters. Thus the evaluation the state would be embarking upon
would be to look at the two tests and some of the issues over
the next two to four years. She characterized it as a difficult
case to grapple with and many attorneys will disagree as to how
it should be applied and interpreted.
2:03:43 PM
CO-CHAIR SADDLER asked for the effect of locally impacted
communities to comment if the state assumed primacy, and whether
they would have a larger or smaller opportunity to weigh in on
development activities.
COMMISSIONER HARTIG responded that question came up in the
state's 402 primacy effort. The DEC worked closely with the EPA
to hold discussions with tribes and develop a communication
protocol for tribes and rural Alaska. The DEC was awarded a
national grant to put in place a pilot program for enhanced
communication developed with a series of villages on the Yukon
River. Thus the DEC took this effort seriously and he assumed
the same thing for the 404 program effort. The goal would be to
have comparable if not better communication with rural
stakeholders, including the tribes.
2:05:11 PM
REPRESENTATIVE HAWKER asked whether he could discuss the fiscal
note.
CO-CHAIR SADDLER asked to hold the question.
2:05:29 PM
REPRESENTATIVE TARR referred to testimony prepared by the [DEC]
for the Senate Finance Committee, which compared the fiscal
impacts between the 402 and the 404 process. She read, as
follows [original punctuation provided]:
One difference in the two paths to primacy is that DEC
was already operating a robust wastewater permitting
program and the existing 29 positions were transferred
to the 402 program. While DEC and DNR have
significant experience on large projects with the 404
program, the current DEC investment is about 3-4 FTE
spread over approximately 7 employees."
REPRESENTATIVE TARR said it is difficult for her to make a
determination on whether [the 404 process] is even worth the
evaluation since it would cost several million dollars without
having some direction about the anticipated fiscal impact of a
program. She asked whether this could be part of the discussion
with Representative Hawker's questions on the fiscal note.
CO-CHAIR SADDLER recapped the question is whether it's worth it.
REPRESENTATIVE TARR agreed, especially if the department doesn't
have positions it can transfer to the [404 program]. She
wondered what type of permanent commitment would be made in
terms of staffing levels since the federal government could take
the program back, which could cause further delays [in
permitting].
CO-CHAIR SADDLER believed the actual costs are indeterminate.
2:07:26 PM
REPRESENTATIVE HAWKER recalled the 2/1/13 committee meeting
indicated this is a two-stage process. He characterized this as
the germinal and exploratory work to consider how a program
might be administrated. However, the fiscal note does not
represent an all-encompassing cost of the program put in some
time after 2016. The fiscal note for SB 27 does state that some
costs will be offset by program receipts. While he recalled the
fiscal note is a research rather than a program implementation,
he previously asked for an estimate about the cost after 2016
for truly implementing the program, but has not received it. He
asked for an estimate based on prior experience.
REPRESENTATIVE P. WILSON requested clarification on the fiscal
note.
REPRESENTATIVE HAWKER stated his aforementioned comments were
general comments about the fiscal notes and the process within
the DEC; however, the lead fiscal note is from the DEC, water
quality. Furthermore, the department anticipates ongoing, long-
term commitments from DNR and potentially the Department of Law
to continue to operate the program. He expressed an interest in
the long-range cost.
2:10:22 PM
REPRESENTATIVE HAWKER referred to fiscal note 1 from DEC, Water
Quality [dated 1/11/2013]. One thing that caught his attention
is that the personal services expenses level to FY 19, funded by
a [Reimbursable Services Agreement (RSA)] adds an additional new
[personal] services required for DEC/DNR, of approximately $1.3
million. He expressed concern that the personal services
funding does not increase, yet it is not likely staff costs
would stay the same over six years. He suggested that some type
of escalator clause be included. He characterized his concerns
as being "truth in budgeting." Incidentally, the services
analysis on page 2 of the fiscal note does not match the figures
for services in FY 14 and FY 15, which are $879.5 and $908.2,
specifically, but the analysis accounts for $849.0 and $850.0.
He asked for an explanation of the discrepancy.
MS. HALE offered to research this and report back to the
committee.
2:12:32 PM
REPRESENTATIVE HAWKER turned to fiscal note 2 for DNR [dated
1/14/13]. He referred to page 2 of the DEC fiscal note to the
$361.0 RSA to DNR, which is fine, as is page 3 of the DEC's
fiscal note listing $566.7, which is matched by the DNR fiscal
note. However, the DOL fiscal note does not show the
interagency receipt authority for the $187.5 RSA. Since the DOL
fiscal note is a zero fiscal note, it implies that DOL will be
able to accommodate the DEC and the fiscal note will be
basically transferring spending authority to the department. He
wondered why there isn't an increase in the DOL's interagency
receipt authority to match the DEC fiscal note.
MS. HESSE offered to try to answer the question even though she
is not adept at the fiscal note policy.
CO-CHAIR SADDLER referred to page 2 of DOL fiscal note analysis,
which indicates the DOL has sufficient interagency receipt
authority for the proposed $187.5 agreement.
REPRESENTATIVE HAWKER interpreted the fiscal notes as written as
giving the DOL an additional $187.5 to spend "as they wish."
MS. HESSE answered the DOL would not be "looking to pad the
agency's budget" through this process. She explained the intent
is similar to the 402 program in which the services the DOL
rendered, not to add discretionary budget. She said the DOL
reviewed the DOL's effort with the 402 program and estimated
that to evaluate the 402 program and prepare a package to apply
for the 404 program. If necessary, the DOL could amend the
fiscal note.
REPRESENTATIVE HAWKER asked the DOL to consider amending the
fiscal note to reflect the agency acknowledging the receipt. He
asked whether the money disappeared.
MS. HESSE answered no, it did not. She will get back to the
committee
2:18:48 PM
CO-CHAIR SADDLER asked whether the $187.5 per year would provide
legal services as DEC goes through the primacy application
preparation, but not necessarily to provide a legal defense if
an appeal is filed.
MS. HESSE believed it does not, but said she will check.
COMMISSIONER HARTIG stated the appeal would be an appeal of
EPA's decision so DOL would be the party responding. The state
at most would look at intervening in the case, while the EPA
would have the "laboring oar."
2:19:38 PM
CO-CHAIR SADDLER asked whether any financial assistance is
provided by the EPA for states, such as Alaska, for taking over
primacy.
MS. HESSE responded there are some grant funds available. She
deferred to the DEC.
COMMISSIONER HARTIG deferred to Ms. Hale.
MS. HALE answered the EPA has a grant program, called the
Wetlands Program Development Grant Program, which includes work
which might be done to submit an application, but is more broad
than that so it also would apply to a lot of states that are not
applying for 404 primacy. For instance, it would include things
like developing a wetlands program plan, but also work that
includes "up to submitting an application for 404." She said it
is competitive among different states, but the DEC is currently
in the process of applying for the grant.
2:21:42 PM
REPRESENTATIVE TARR inquired whether other department priorities
will be pushed aside and how this proposal fits in overall
priorities.
COMMISSIONER HARTIG answered that is a good question because
adding anything to the department brings rise to how it will
affect things during a declining revenue scenario. His view is
that the state will solve its fiscal problem with resource
development. Because the state doesn't have manufacturing or
large population growth, economic growth will come from natural
resource development. Of the critical permits over 30 years,
this is certainly one of them. Additionally, the 404 process
for a particular project can influence other companies to decide
whether to move forward with another project. He said without
examining it solely from the DEC's perspective, he thinks that
the 404 process becomes more magnified. Granted, just viewing
from a DEC perspective he becomes more worried. He anticipated
the project would be supported by general fund, but also by
permitting fees. From the state's perspective, he thinks 404
permitting primacy should have a pretty high priority. The
state should take a "really solid look at it" and consider the
best path forward in terms of the state's future development.
He said, "From a DEC perspective, I guess I'm willing to take my
chances is the way I'd put it. We'll keep advocating for the
priorities. We'll try to look for efficiencies within the
department and put those priorities in front of the legislature
and ask you guys to make the hard decision."
2:24:30 PM
REPRESENTATIVE TUCK said he does not have enough information to
decide if there is a problem. After all, the state is
considering spending millions of dollars just to see if there is
a problem [with Section 404]. He was unsure if complaints about
the process exist. In any event, the problems with the CD-5
[ConocoPhillips Alaska, Inc.'s drill site inside the National
Petroleum Reserve (NPR)] may have been a sole problem, which
might also have been fixed with changes to permitting.
Likewise, the state removed the coastal zone management recently
and he has concerns about growing government. Besides, without
knowing the backlogs or how long it takes to go through the
process, and being able to forecast the process, it is difficult
to know if this [404 process] should be considered. It would be
helpful to have concrete evidence presented to see how the state
can be more effective.
REPRESENTATIVE P. WILSON said Southeast Alaska experiences
permitting problems all the time. She receives numerous calls
in this regard.
MR. CRAFFORD shared Representative Tuck's concerns. Granted,
there is a lot the state doesn't know at this time. He has been
involved in the coordination of the permitting process for
numerous projects. The Department of Natural Resources, Office
of Project Management and Permitting (OPMP) has project
coordinators involved with oil and gas, alternative energy, and
mining over a wide spectrum of projects. He reiterated that the
404 permit is the lead federal permit and the Corps is the de
facto NEPA lead federal agency. During the NEPA process the DNR
is a cooperating agency, which means the DNR's member does not
have a "full seat" at the table. A frustration is that once the
NEPA process is completed, "the door is shut." The federal
agency then makes permitting decisions behind the closed door,
which is precisely the table the DNR would like to be present at
to help assure the best interests of Alaska, and Alaska specific
technical information is included. Absent the greater role, the
state feels it is at a disadvantage and unable to fully
participate.
2:28:19 PM
CO-CHAIR FEIGE observed that CD-5 represents an example of
resource development delays and he anticipated other issues will
arise. However, CD-5 is the gateway to NPR-A and further
development there will provide revenues to the state. To have
significant delays on significant projects because the state
lacks control over the 404 permitting process translates into
perhaps a couple of billion dollars. He asked whether this is a
fair observation.
MR. CRAFFORD concurred, saying part of the evaluation process is
to determine what it might be worth to the state. He said,
"These are big ticket issues. And I think it behooves the state
to take a serious look at what those advantages might be and
what it might cost to make an informed decision."
2:30:12 PM
CO-CHAIR SADDLER inquired how long the evaluation process was
for seeking primacy for water quality.
MS. HALE answered the evaluation process for primacy occurred
several times, but at the time the process was approved probably
spanned a five-year period. She described this as including the
evaluation, the back and forth with EPA, and determining whether
to move forward. Additionally, probably the process was
preceded by a couple of years of work group efforts, she said.
Even so, it's a longer process than the one outlined in SB 27,
in part, because the DEC did not have the experience it now has,
which gives the agency the confidence to proceed with the
evaluation. In response to a question, she agreed the DEC has
gained knowledge in the process.
2:31:38 PM
REPRESENTATIVE SEATON fully understood the impact of delays, but
maintained that the types of large projects would still fall
under federal purview because of navigable waters. He wondered
whether it's worth investing $14 million and 12 new employees,
since the statewide general permit process currently used is
available. After all, Virginia felt like it obtained most of
the benefit through the aforementioned process without the
expenses. In any case, wouldn't it be better for the DEC step
up its statewide general permitting process instead of spending
four years in the process of considering Section 404 primacy.
COMMISSIONER HARTIG suggested there is a misconception that the
programmatic general permits under discussion are for projects
with a common impact, similar to placer mining in the Interior
or shale gas projects at wetland sites. These projects look
alike, but have the same impacts, which must be individually and
cumulatively minimal. Still, that's quite a distinction from
the other types of projects such as CD-5, which are relatively
unique and have a large impact relative to the other types.
Thus more general permits is not a panacea, but are used to
maximize efforts while pursuing the primacy authority to issue
individual 404 permits for the larger and more unique projects.
2:35:05 PM
REPRESENTATIVE P. WILSON commented it is important the state be
able to do some general permits because in her district projects
permitting has held up small projects for years, such as
driveway culverts or building houses. She said something must
be done because it's so frustrating and costly.
REPRESENTATIVE SEATON concurred, citing an example of 80 miles
of gas pipelines on the Kenai Peninsula. Granted, the state
needs to concentrate efforts on statewide general permits.
However, for large projects which invariably impact navigable
waters, the Corps would still retain primacy. Therefore, he was
unsure how the 404 permitting would solve any problem since
navigable waters or ephemeral streams are likely to be present.
COMMISSIONER HARTIG answered that during the first year the DEC
will work with the Corps to parse out how many of the permits
would be excluded from primacy and how many would be within the
area in which primacy would apply. However, to leap towards
saying, "we know the answer to that right now" is scary because
"we don't know the answer right now." It would take some effort
for the agencies to provide an estimate to the legislature. He
anticipated that it would likely be closer to a decision in FY
2016.
2:38:53 PM
CO-CHAIR SADDLER asked for the future decision points for the
legislature in the event the SB 27 is passed by the legislature.
COMMISSIONER HARTIG answered the legislature controls the budget
so it will have opportunities. He anticipated the DEC should
have information at the end of fiscal year 2015, in terms of the
types of permits, the jurisdiction, the types of permits, as
well as having held discussions with the Corps on general
programmatic permits. At that point, the departments would be
back before the legislature with an assessment of what resources
are necessary for the next step, which is to build up the
program. Naturally, this would be based on whether the decision
is that the 404 primacy process will benefit the state and
should move forward.
2:40:27 PM
REPRESENTATIVE TARR recapped the 402 process, such that the work
group started in 2003 and the application was completed in 2008,
which wasn't fully implemented until 2012. It seems the process
took a decade. She asked whether the department anticipates a
work group would need to be convened since that work hasn't
already been done.
COMMISSIONER HARTIG responded that the state was starting with
an unknown when it began the 402 process, which was also true
for the EPA Region 10 since it was a pretty new experience for
them, tool. He came in as the commissioner in 2007, and he
recalled the EPA discovered over 200 deficiencies with the
application. He further recalled the department quickly got
that reduced to a handful and approached the legislature for
statutory changes necessary for primacy. Collectively, the EPA
and the state agreed to phase in the primacy. Currently, he
anticipates shortening up the timeframe. In terms of a work
group, he envisioned a parallel process being used, one in which
public input could be obtained; however, he does not see that as
adding time to the project.
2:43:11 PM
CO-CHAIR SADDLER opened public testimony on SB 27.
2:43:37 PM
JAMES SULLIVAN, Representative, Legislative Organizer, Southeast
Alaska Conservation Council (SEACC), stated he has been
listening to the proceedings on this bill. It seems to him that
the commissioners of DEC and DNR keep mentioning all the
unknowns. One of the difficulties is there is a great deal that
is known. In fact, it would be easy access the Corps' website
and obtain a listing of every navigable river in the state that
falls under Section 10 of the Rivers and Harbors Appropriation
Act of 1899 (33 U.S.C. 403). Although he wouldn't want to
deface the committee room map, this information could be
superimposed on it. He pointed out numerous references have
been made for huge delays on CD-5. He emphasized that the
Colville River, which is where the substantial delays happened,
was due to the Corps denial to allow a bridge to be built across
the Colville River.
MR. SULLIVAN pointed out the Colville River very clearly falls
under the rivers and harbors act so state would still have been
unable to start the work on CD-5. Certainly, this is important
information to note prior to spending $7 million per year to run
the program. "You don't buy a truck and drive it off the lot
until you look under the hood and see if you've got the engine
you've paid for," he said. He expressed concern the legislature
is going in the wrong direction and moving very quickly on this,
in particular, since the commissioner mentioned a conference
call on Friday. Perhaps some information could be obtained.
2:46:02 PM
MR. SULLIVAN discussed what the department learned through the
402 process. First, it's important to note that the 402
permitting process allows for a phasing in process. Even though
the 402 primacy just happened this past year, the DEC was
issuing permits - at some scale - very early on. Second, the
404 process is an all or nothing prospect. It seems as though
staff is being put in place, yet permits will not be issued for
5 to 10 years.
MR. SULLIVAN said the state could spend millions of dollars on
issuing the permits, yet, "we're never gonna be the boss of this
program." The state will always need approval through the EPA.
EPA will always have a veto authority on every permit that is
issued through 404. He found this to be disconcerting. He
understood the frustration; however, he could not think of
anything more frustrating than spending $7 million to put dozens
of people in place, yet, the EPA can say no.
MR. SULLIVAN the delays have been very anecdotal with little
evidence of what the actual delays have been. The Corps has a
Juneau office so direct contact can be made. The general
permits seem to have been done very efficiently, with over 85
percent of general permits completed in 60 days. He wondered if
spending $7 million would increase it to 89 percent, which he
did not think would be the best use of funds. "I think we're
putting the cart before the horse," he said. He suggested the
importance of viewing a map, which would more clearly highlight
what the state would obtain.
2:49:23 PM
CO-CHAIR SADDLER closed public testimony on SB 27 after
ascertaining no one else wished to testify.
2:49:33 PM
REPRESENTATIVE TARR referred to the two phases, which would
authorize the ability to make the application. She asked what
level of confidence the commissioner has that the application
will be successful since only two other states have done this.
The worst outcome would be to spend millions on the application
only to have the application denied. She further asked what
gives the commissioner confidence.
COMMISSIONER HARTIG strongly objected to the concept that this
would be wasted effort if the state failed to obtain the 404
primacy. From the state's perspective, it would evaluate
whether to obtain primacy and file an application. He said the
state would not be going after the 404 primacy if the department
did not think the state would get it, which is a view he
believed is shared by the state's team. Likewise, putting a
spotlight on the whole 404 permitting program - both the general
and the individual permits - highlight the question of whether
the state can do better or if it is the best that can be done.
In any case, asking those questions will be beneficial to
everyone. Yet, no one is currently asking those questions.
Hence, bringing that attention and finding out the weaknesses in
permitting - whether it is the state or the federal government -
is a good thing, especially in times of declining revenue. In
essence, he said he views the 404 primacy as a worthy effort.
COMMISSIONER HARTIG said the likelihood of obtaining primacy
depends on the quality for the state's application as well as
the willingness of the federal agencies to work with the state.
Thus far the state's experience has been with the 402 process
and now the beginning of the 404 primacy process is for open
collaboration from the federal agencies. He anticipated "give
and take" and "back and forth" efforts as the agencies evaluate
the opportunities and the best way to proceed; however, he has
no reason to believe that the [administration] wouldn't be able
to put together an application which will be successful.
2:52:31 PM
REPRESENTATIVE JOHNSON remarked he could not help but laugh at
someone's comment about spending time and effort only to have
the permit denied. To begin with, he thinks of all the people
who have tried to build houses, culverts, or CD-5, only to have
their permits denied. Indeed, if the state can attempt to take
some control over [permitting], it would give him comfort. Of
course, businesses attempt to operate in Alaska every day not
knowing whether their permits will be issued or denied. He
offered his belief the [legislature and administration] owe it
to the citizens and the government to take as much control as
possible for Alaska's future. In essence, this is just one way
to do it.
2:53:37 PM
CO-CHAIR FEIGE, referencing to a letter to the Senate Finance
Committee [in members' packets] mentioned 49 positions and an
annual budget for the Corps of $8 million. He asked whether the
commissioner is aware of any plans by the federal government to
scale back or if the possibility exists the agency will lose
positions and lose the ability to process permits.
COMMISSIONER HARTIG replied that, as previously mentioned by Mr.
Crafford, the DEC and DNR have two concerns. First, the Corps
has been experiencing declining budgets; and second, the agency
has lost key permitting people. Hence, the state has observed a
loss of capacity on several fronts. At the same time, the state
has also seen a growing need for 404 permitting in the state.
He acknowledged it isn't a good situation. Whether the state is
in a better position to handle this or if the Corps is or if the
agencies can collectively work on permitting needs is something
that needs to be explored.
2:55:22 PM
REPRESENTATIVE SEATON recalled several references to a
presentation to the Administrative Regulation Review committee
by the Corps. He requested the co-chairs ask the Corps to
testify directly to the committee. The committee has been
discussing permits that "are happening or not happening" and
apparently information including pie charts are available, which
could be of benefit to the committee to review.
CO-CHAIR SADDLER offered to make the request.
REPRESENTATIVE TARR reported that under the current program
"less than one percent of one percent" of the permits has been
denied. Basically, very few denials are taking place, she said.
2:56:48 PM
CO-CHAIR SADDLER held over SB 27.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB27 Version A.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Sectional Analysis.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Transmittal Letter.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Nunamta Aulukestia Letter.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Fiscal Note DOL.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Fiscal Note DNR.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 Fiscal Note DEC.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Testimony.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Response to SFIN Questions.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Factsheet - Public Process.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Factsheet - Primacy.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Factsheet - Primacy Methods.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 DEC Factsheet - Primacy Benefits.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |
| SB27 AOGA Letter.pdf |
HRES 3/18/2013 1:00:00 PM |
SB 27 |