Legislature(2005 - 2006)SENATE FINANCE 532
04/18/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB69 | |
| SB139 | |
| SJR11 | |
| SB151 | |
| SB110 | |
| SB147 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 139 | TELECONFERENCED | |
| + | SJR 11 | TELECONFERENCED | |
| + | SB 69 | TELECONFERENCED | |
| += | SB 151 | TELECONFERENCED | |
| += | SB 70 | TELECONFERENCED | |
| += | SB 110 | TELECONFERENCED | |
| = | SB 147 | ||
10:04:39 AM SENATE BILL NO. 110 "An Act relating to regulation of the discharge of pollutants under the National Pollutant Discharge Elimination System; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. 10:05:39 AM Senator Olson asked if the assessments on affected communities would be public information. 10:06:19 AM DAN EASTON, Director, Division of Water, Department of Environmental Conservation, testified that it would be public. 10:06:25 AM Senator Olson asked if the affected communities have been notified of the rate increase. 10:06:38 AM Mr. Easton responded that those communities have not been notified. 10:06:51 AM STEVE BORELL, Executive Director, Alaska Miners Association, testified via teleconference from an offnet location, that this issue has been discussed within the mining industry for some time. He noted that until participating in a series of meetings that the industry became convinced that State's primacy would be in the best interest of the State. He detailed a letter and attachments to the Committee from the Association dated April 4 [copy on file.] Mr. Borrell spoke to "non-Alaska" factors that could impact Alaska permits, explaining that decisions made by the federal Environmental Protection Agency (EPA) could affect other areas of the national region number ten, of which Alaska is included. In addition, the EPA could consider permit applications based the impact such permit could have on the outcome of pending court cases in other jurisdictions. 10:09:54 AM MERLE THOMPSON, testified in Juneau this bill is example of "piling off" rather than "piling on". He identified concerns with the legislation, notably that tribal governments and the general public would be excluded from the permit process. He questioned the State expenditure of $1.5 million annually to provide a service that the federal government currently conducts at no cost to the State. Mr. Thompson indicated his experience with coal bed methane and expressed concerns about the surface discharge from these activities that would have likely be required to undergo a thorough environmental impact statement process under federal management, but would not be considered under State management. Baseline studies of surface discharge were undertaken in the state of Colorado and were review of those studies by the organization, Trout Unlimited, which resulted in a significant decline in trout populations. It was determined that the eggs could not hatch in the water conditions. Mr. Thompson surmised that this legislation would reduce the number of compliance officers and permitting officers. He characterized this legislation as a "wish list from the industry". He spoke to the benefits of the public process. 10:13:13 AM KATHIE WASSERMAN, Alaska Municipal League, testified in support of the bill. She read a statement into the record as follows. AML supports SB 110. We believe Department of Environmental Conservation should have authority from EPA to implement the NPDES permitting program. Department of Environmental Conservation has successfully taken actions to assume primacy for the timber industry and, we feel, now should be able to pursue program development for full primacy. Our reasons for support are simple: Department of Environmental Conservation is better able to respond in a more timely manner to Alaska discharge and waste water issues. They are more familiar with Alaska's communities and businesses and thus know first hand the on-the-ground impacts, limitations, geography and economics related to the decisions they might make. We are (as is Senator Olson) concerned about fees. Permitting is worthless if communities cannot afford to pay permitting fees. We would suggest a sliding scale for municipalities based on population, and would be happy to work with Department of Environmental Conservation to arrive at a fair and equitable fee structure. 10:14:30 AM Senator Stedman clarified that the AML is in support of increasing the fees that the Department would charge above the normal rate. He spoke to the allowable fee percentages based on the actual amount of time spent on permit issuance activities. He asked if the intent is to transfer the costs incurred by the State to industry. 10:15:22 AM Ms. Wasserman corrected this was not the League's intent. In discussions with Mr. Eastman, she understood that the fees would increase under State primacy. She expressed this would be "one more added expense" to communities. 10:15:50 AM Co-Chair Green asked if the witness' concerns pertained to communities of all sizes. 10:15:56 AM Ms. Wasserman affirmed. 10:15:59 AM Senator Stedman expected that 80 percent of the costs would be paid by the State and 20 percent by local governments. He asked if Ms. Wasserman requested that the 20 percent assessed to communities be reduced. 10:16:44 AM Ms. Wasserman had not seen proposed fee amounts and hoped that municipalities would be involved in the establishment of the fees. If the increase were small, the matter would be insignificant. If the increase were substantial, communities would be required to consider whether "it would be beneficial." 10:17:14 AM Senator Hoffman cited a memorandum dated April 8, 2005, from the Department of Environmental Conservation [copy on file], indicating that the rates would increase 80 percent. 10:18:03 AM Senator Stedman identified two components to the fee situation, the first being "the absolute increase cost at the local level", i.e. municipalities and businesses, which would cost more for local governments and industry. However total cost of implementation, the other component of the fee situation, would be paid 80 percent by the State and 20 percent by local entities. 10:18:41 AM Co-Chair Green referenced the aforementioned letter as stating the increase would be a factor of 1.8 for every community. She surmised this would be "fairly nominal for smaller cities". 10:18:56 AM Senator Stedman cited pie charts titled, "Department of Environmental Conservation, NPDES Primacy, Distribution of Program Costs" [copy on file], and the pie titled, "Incremental Alaska investment in wastewater discharge permitting to achieve NPDES primacy (legislation fiscal note) $1,547,900" showing: fees 19 percent, general funds 81 percent and federal funds zero percent, which demonstrated his argument. 10:19:11 AM Mr. Easton directed attention to the pie titled "Full Alaska investment in wastewater discharge permitting at full NPDES primacy implementation $4,826,100" showing: fees 19 percent, general funds 56 percent, and federal funds 28 percent. Mr. Easton furthered that the 80 percent increase is an average; generally fees would increase by that factor. The actual increase would be a function of the direct costs and the fees for some types of permits could increase more than others. The permits issued for municipalities are "generally easier for us to write" and would therefore likely increase by a factor or 1.2 or 20 percent, rather than the average of 80 percent. 10:21:09 AM Senator Stedman noted the differences of the two pie charts, with the incremental implementation of the program entailing a higher portion of the costs be paid by the State. 10:21:44 AM Co-Chair Green requested a review of the reasons for assuming State primacy to provide understanding for the proposed fee increases. 10:21:58 AM Mr. Easton explained that most of the permit applications in question are from small businesses, including placer miners and small seafood processors. Unlike in other states, two permits are required for operations in Alaska: one from the federal EPA and another from the State Department of Environmental Conservation. Most other states require one permit issued by the state agency, which acts as an agent for the EPA and must comply with the provisions mandated be the federal Clean Water Act. This process is less expensive and time consuming. 10:23:11 AM Co-Chair Green spoke to concerns that the quality of permit application review would be reduced. The State would be less careful and less discriminate because the State would not be required to comply with federal regulations. Mr. Easton assured that the Department must comply with the Federal Clean Water Act. Receiving permits would not be any easier. 10:23:46 AM Co-Chair Green asked the location of the nearest EPA headquarter office. Mr. Easton replied the regional headquarters is located in Seattle, Washington. It is possible that a permit reviewer has never traveled to Alaska. 10:24:06 AM Ms. Wasserman shared that she once had a discharge permit for NPDES through her community, and that in the process of obtaining this permit, the EPA required ten months to locate a necessary waiver. The agency was unresponsive. Comparatively, the State Department of Environmental Conservation has been very responsive. 10:24:44 AM Co-Chair Green asked if the witness surmised that the Department of Environmental Conservation without any standards approved the State permit. Ms. Wasserman replied that the process never progressed to the point of Department of Environmental Conservation involvement. 10:25:05 AM Co-Chair Green opined that some functions are better undertaken by the State. 10:25:16 AM Senator Olson clarified that the AML is in favor of this legislation despite the fee increases of more than twice the current amounts. 10:25:35 AM Ms. Wasserman reported that Mr. Easton hoped the increases would not be as high. Most communities favor a quicker, speedier and more complete process than the current EPA system. 10:25:55 AM Senator Olson understood the fee increases would average 1.8 for the communities he was concerned about and therefore some permits would increase over this amount. Mr. Easton affirmed. Senator Olson asked if these permits would be issued primarily to municipalities or businesses. Mr. Easton responded that the larger increases would apply mostly to large businesses, such as a water treatment facility located in Valdez. 10:26:50 AM Co-Chair Wilken noted the aforementioned letter addressed the issue of including revenues generated from the imposition of fines in the fiscal note. He asked for an estimate to offset the $1.5 million cost to operate the program. 10:27:15 AM Mr. Easton replied that this was considered, although he was unsure how to demonstrate collection of fines in a fiscal note. He surmised it would be appropriate to assume that a certain amount of revenue would be collected from fines; however, these revenues are deposited directly into the general fund. Co-Chair Wilken interpreted the fiscal note to state that no violations would occur and therefore no fines would be levied. He deferred to Co-Chair Green to pass judgment on the correctness of the fiscal note. 10:28:09 AM STEPHANIE MADSON, Vice President, Pacific Seafood Processors Association, testified about the Association and its members. She spoke as a member of a workgroup reviewing the pros and cons of State primacy. Currently the State has two types of permits: a general permit applied across the state, and a site-specific permit issued to larger processors or in areas of increased water quality concern. She understood that the cost of permits would increase under State primacy; however the benefits would be worth the extra expense. She assured that the public process would not change. Rather the State would not be required to concur with tribal groups other federal agencies, such as the National Oceanic and Atmospheric Administration (NOAA) and other groups. She qualified that the EPA would retain authority to override the issuance of a permit. 10:32:36 AM Co-Chair Green took Co-Chair Wilken's advice to further review the fiscal note. She commented that fines should not be viewed as revenues sources; however their collection impacts the fiscal cost of a program. Co-Chair Green ordered the bill HELD in Committee. [The bill was heard again after the recess. AT EASE 10:33:30 AM/10:33:37 AM AT EASE 10:33:51 AM/10:42:53 AM SB 110-POLLUTION DISCHARGE & WASTE TRMT/DISPOSAL This bill was heard earlier in the meeting. Co-Chair Green noted a proposed committee substitute was distributed to members. 10:43:12 AM Co-Chair Wilken moved for adoption of CS SB 110, 24-GS1009\G as a working document. Co-Chair Green objected for an explanation. 10:43:31 AM Mr. Easton explained that the committee substitute "recognizes that the fiscal note reflects a substantial investment of State funds" and establishes an annual reporting system to appraise the legislature and the governor of the status of achieving primacy. 10:43:53 AM Co-Chair Green removed her objection and the committee substitute was ADOPTED without further objection. 10:44:12 AM Co-Chair Green relayed a suggested made by Co-Chair Wilken to report this bill from Committee with the intent that the Department would prepare a new fiscal note that would be adopted by the Senate Rules Committee. The fiscal impact of revenue generated from fines would not be significant to the total cost of the program. AT EASE 10:45:01 AM / 10:45:28 AM 10:45:43 AM Co-Chair Wilken offered a motion to report CS SB 110, 24-GS1009\G from Committee with individual recommendations and accompanying fiscal notes. Senator Hoffman objected because, although the State would receive some benefit from primacy, the federal government currently provides the services. This program would add two new positions and cost the State approximately $1.5 annually. 10:46:30 AM Co-Chair Wilken amended his motion to clarify that a new fiscal note would be forthcoming from the Department of Environmental Conservation. 10:46:52 AM Senator Olson shared concerns expressed to him from affected municipalities. Beside the increase costs, smaller communities that are federally recognized as tribal governments have a developed relationship with the EPA that he characterized as "government-to- government" The Department has not demonstrated that this relationship would continue. 10:47:45 AM A roll call was taken on the motion. IN FAVOR: Senator Dyson, Senator Stedman, Co-Chair Wilken and Co- Chair Green OPPOSED: Senator Hoffman and Senator Olson ABSENT: Senator Bunde The motion PASSED (4-2-1) CS SB 110(FIN) MOVED from Committee with zero fiscal notes #1 from the Department of Fish and Game, #2 from the Department of Natural Resources, #4 from the Department of Transportation and Public Facilities, and a new fiscal note for $874,200 from the Department of Environmental Conservation.
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