Legislature(2003 - 2004)
04/16/2003 09:04 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 160(FIN)
"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."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated that this bill, introduced at the request of
the Governor, "establishes standardized air permit conditions based
on best management practices. The legislation differentiates
between major and minor sources air pollution and focuses the
Department of Environmental Conservation accordingly. Senate
companion bill 116 passed out of Senate Resources with a
recommendation of seven 'do passes'."
TOM CHAPPLE, Director, Division of Air and Water Quality,
Department of Environmental Conservation, testified that the
Governor is committed to resource development as well as protecting
the environment. Mr. Chapple asserted these are not exclusive
goals. He told of a legal dispute "to ensure that Alaska's rights
are not eroded", relating to a mining operation with the federal
Environmental Protection Agency (EPA) that is currently under
consideration by the United States Supreme Court.
Mr. Chapple stressed this technical legislation would not change
the air quality standards relative to the protection of public
health, but would rather change the permitting process "to be more
responsive to our economic development, while also preserving our
excellent air quality."
Mr. Chapple stated this legislation would change the terminology
used in Alaska to match national terminology. He exampled
"contaminant", a term utilized in the State, would be replaced with
"pollutant", a national term. He expressed this would simplify the
process of adopting federal "rules" and increases understanding by
Department staff, the regulating community and consultants. He
predicted this would result in efficiencies.
Mr. Chapple continued that this bill distinguishes between major
and minor sources of pollution for the purposes of permitting,
pointing out that current State statute addresses all pollution as
major sources. He listed major sources as oil and gas development,
larger mines, power plants in most cities and rural hub
communities, military bases and seafood processing plants. He then
listed minor sources as many rural community power plants, asphalt
plants, rock crushers, and fuel storage tanks. He explained that
this bill would allow the Department to streamline the permitting
process for minor sources and implement standardized conditions. He
predicted this would also improve efficiencies.
Mr. Chapple furthered that this legislation would change the
structure of permit fees, to "accomplish more predictable and
reliable fees."
Mr. Chapple informed that this legislation represents the
recommendations of a working group comprised of "the oil and gas
community, mining industry, military, seafood processors and power
industries" made the previous summer.
Senator Olson understood the intent to streamline the permitting
process. He asked how this would affect operations of existing
industries.
Mr. Chapple replied that this bill would result in timelier
permitting. He commented on the irony that the EPA has recently
adopted changes to its permitting laws that are consistent with the
permits the State granted to the mining operation in the case
currently before the US Supreme Court.
Senator Hoffman asked if this legislation addresses the sulfur
emissions from aircraft.
Mr. Chapple replied that this bill is unrelated to aircraft.
Senator Taylor referenced Sections 33 and 34 on page 17 of the
committee substitute, surmising that these provisions would create
a dedicated fund within the Department. He cited the language
stipulating that all funds generated from permit fees may only be
utilized to cover the "reasonable direct and indirect" costs
required to support the permit program. He asked if this would also
provide receipt authority to expend those funds without legislative
authority.
Mr. Chapple responded that receipt authority would be requested
though the operating budget process. He noted this bill changes the
fund management and accounting structure. He reported that the
Clean Air Protection fund was appropriated $2.7 million for the
current fiscal year to support the program.
Senator Taylor asked how this legislation would improve efficiency
in issuance of permits.
Mr. Chapple answered that by streamlining the process to better
match the federal permitting guidelines for larger industries,
uncertainties would be removed and dialog improved. He noted that
the Department has reviewed the processes employed in other states
to identify efficient methods. He furthered that the Department has
not been timely in permitting due to inefficiencies and inadequate
staffing levels. He informed that to improve timeliness,
contractors would be utilized during periods when more permits are
pending.
Senator Taylor requested a quantitative example of the length of
time required to issue a permit under the existing statute compared
to the length of time required under the proposed statute.
Mr. Chapple listed the construction permit, which is required
before construction begins, and the operating permit, which is
issued after construction is completed and pertains to ongoing
operations. He reported that construction permits are usually
issued 254 days after application and that the goal is to reduce
the amount of time to between 90 and 110 days. He remarked that
this bill, the subsequent regulatory changes, as well as adequate
staffing assignments would allow this goal to be reached. He
expressed this would be "responsive to resource development and our
business needs in Alaska."
Senator Hoffman asked if a sectional analysis is available for this
legislation. He also asked for an explanation of the proposed
terminology change of "facility" to "stationary sources".
JOHN KUTERBACH, Program Manager, Air Permits, Division of Air and
Water Quality, Department of Environmental Conservation, explained
the change in definition from "facility" to "stationary sources" is
intended to make the State terminology consistent with the federal
terminology as well as that of "most other jurisdictions". He
pointed out that the federal definition does not specify property
as a designator for the facility and also considers a stationary
source using the standard industrial code in determining whether a
permit is required, which differ from the State definition. He
stated that this differences hamper the Department's ability to use
federal case law and decisions rendered in other jurisdictions when
making determinations in Alaska.
Mr. Kuterbach assured that most facilities that currently require a
major permit would continue to require such, although technical
difference would occur in the grouping of those operations. He was
unable to predict which specific facilities would have permit
requirement changes.
Senator Taylor opined that differences in permit types are
insignificant, given the limited industrial development in the
State and therefore questioned the length of time required to issue
permits.
Mr. Chapple assured that not every permit issuance requires 254
days, giving examples of general permits for asphalt plants and
rock crushers that are handled rapidly. He stated that the longer
time periods are related to more complex projects, such as a mine
or oil and gas development needing a Review for Significant
Deterioration of Air Quality. He stressed that industry
representatives are aware of these time requirements and plan
accordingly.
Senator Taylor asked if the permits in question also apply to those
"sources that move", such as a large ship.
Mr. Chapple answered that this permitting rule generally applies to
stationary sources with exceptions including portable oilrigs and
portable asphalt plants. He stated that this program does not cover
ships unless that ship is part of a permanent facility, such as a
near shore-based seafood processing plant. He noted that the State
is prohibited from imposing air quality regulations to aircraft,
which are regulated by the EPA.
Senator Hoffman asked whether fees would be imposed or increased as
a result of this legislation.
Mr. Chapple affirmed that fees would change. He informed that the
current hourly rates for "a direct service on a permit review"
would become a flat rate, although he expected the amount paid for
a permit would be reduced due to the efficiencies gained. He
continued that emission fees could increase. He told of significant
discussions on this matter.
Senator Hoffman asked the current fee amounts.
Mr. Chapple listed the hourly fee of $78, qualifying that he was
unable to predict the amount of the proposed fee. He indicated that
the total fees of average projects would be reviewed to determine a
reasonable amount for the flat fee. He explained a correlation
between the amount of emissions measured and the amount of the
emissions fee imposed. He reported that because emissions have been
reduced the fees paid have also reduced, and although this is
positive, the amount of revenue collected does not cover the
operating costs of the program.
Senator Olson asked why these changes were not implemented earlier
to avoid the "dire straits" of promoting resource development.
Mr. Chapple informed that the original statute was created nine
years prior in 1993 and that the permitting procedures were adopted
five years ago. He stated that three years ago serious problems
were identified and internal reviews and benchmark analyses of
other states were conducted.
Senator B. Stevens asked if the designation of major or miner
project was applied to both the construction permit and the
operating permit.
Mr. Kuterbach replied that only major projects would require both
an operating and a construction permit. The minor permit program
would apply to the construction and operation of minor sources or
minor modifications to a major source.
Senator B. Stevens clarified that major sources are governed by
different regulations than minor sources.
Mr. Chapple affirmed.
AT EASE 9:43 AM / 9:43 AM
Senator Hoffman referenced Section 23 of the committee substitute
and asked what the proposed changes would accomplish. The language
on page 11, lines 18 - 26 read as follows.
Sec. 23 AS 46.14.200 is amended to read:
Sec. 46.14.200. Review of permit action. A person
who has a private, substantive, legally protected
interest under state law that may be adversely affected
by the permit actions, the owner or operator, or, if a
public comment process is required or solicited, a person
who participated in the public comment process may
request an adjudicatory hearing under the department's
adjudicatory hearing procedures. After the issuance of an
adjudicatory hearing decision, a party to the hearing may
obtain judicial review of that decision as provided in
the Alaska Rules of Appellate Procedure.
New Text Underlined
Mr. Chapple relayed that it was "envisioned" that some of the minor
permits would not have a public comment process. Therefore, he
stated that this language would retain the right to appeal for
those projects that involve a public comment process.
Senator Hoffman clarified that under current statute, public
comment is required and the proposed language allows the Department
to determine whether the public would have an opportunity to
comment.
Mr. Chapple affirmed.
Co-Chair Green offered a motion to report the bill from Committee
with individual recommendations and accompanying fiscal note.
MARILYN CROCKET, Deputy Director, Alaska Oil and Gas Association,
testified via teleconference from an off net location to emphasize
this legislation represents the recommendations of the stakeholder
group that met to address the permitting issue. She stated that the
Association supports the bill.
Senator Taylor noted that the provision of Section 23 provides
"jurisdictional grant of opportunity" for stakeholders and asked if
it also provides an individual the right to request a public
comment hearing.
STEVE MULDER, Assistant Attorney General, Environmental Section,
Civil Division, Department of Law, testified via teleconference
from Anchorage, and agreed the Section provides the right to
request a hearing. However, he emphasized that the requestor of the
hearing must demonstrate that a decision on the issuance of the
permit would impact him. He clarified that the "commenter" is not
required to have ownership interest in the property but rather
"could have standing if they're an adjacent property owner or
they're a user of parklands in the vicinity."
Senator Taylor characterized those who own neighboring property as
having a legally protected interest and has "every right to be
there" as a truly affected party in the matter. He compared this to
others, who occasionally visit a nearby park, and he determined
these parties do not have the same legal qualification.
Mr. Mulder spoke to Department regulations relating to adjudicatory
hearings and commissioner determinations of whether the requestor
is impacted and would be adversely affected by the Department's
decision.
Senator Taylor requested this information be provided to his office
and he indicated he might offer an amendment on the subject when
the bill is before the full Senate.
There was no objection and CS HB 160(FIN) MOVED from Committee with
zero fiscal note #2 from the Department of Environmental
Conservation.
AT EASE 9:51 AM / 9:52 AM
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