Legislature(2007 - 2008)BUTROVICH 205

04/11/2007 03:30 PM Senate RESOURCES


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03:34:04 PM Start
03:34:48 PM Conocophillips
04:21:42 PM SB91
05:05:37 PM SB44
05:19:30 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 91 POLLUTANT DISCHARGE PERMITS TELECONFERENCED
Moved CSSB 91(RES) Out of Committee
-- Testimony <Time Limit May Be Set> --
*+ SB 44 APPROP: FIRE ISLAND WIND FARM TELECONFERENCED
Heard & Held
-- Testimony <Time Limit May Be Set> --
+ Presentation: Natural Gas Pricing and TELECONFERENCED
Trends
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
               SB  91-POLLUTANT DISCHARGE PERMITS                                                                           
                                                                                                                                
4:21:42 PM                                                                                                                    
CHAIR HUGGINS announced SB 91 to be up for consideration.                                                                       
                                                                                                                                
LARRY   HARTIG,   Commissioner,   Department   of   Environmental                                                               
Conservation (DEC), introduced  the SB 91. He said  this issue is                                                               
important to the  Governor because it is essential  for the state                                                               
to gain NPDS primacy - that's  the right to issue water discharge                                                               
permits in the  state of Alaska. Currently, EPA does  that out of                                                               
its  offices  in Seattle.  Primacy  in  this  bill is  also  very                                                               
important to  the public  and it  is one of  the top  five issues                                                               
raised in the transition team's report to the Governor.                                                                         
                                                                                                                                
COMMISSIONER HARTIG  said primacy  is important to  industries in                                                               
the state  that require NPDS  permits. A series of  workshops has                                                               
been going  on for  the last  three years  in which  industry has                                                               
gone through  the issues it  sees with the state  gaining primacy                                                               
and they  are very supportive of  it and are even  willing to pay                                                               
fees just to see it happen.                                                                                                     
                                                                                                                                
Primacy  is not  new,  he said;  it  goes back  at  least to  the                                                               
Knowles  Administration and  perhaps further  than that.  In 2005                                                               
the Alaska legislature directed the  DEC to pursue primacy. Since                                                               
then a  lot of  effort has been  put into getting  it and  it the                                                               
state has  spent about $3.7 million  so far in hiring  people and                                                               
training them,  getting the regulations and  statutes drafted and                                                               
preparing the application to EPA.                                                                                               
                                                                                                                                
COMMISSIONER   HARTIG  emphasized   that   this   is  not   major                                                               
legislation,  but it  is  critical.  It is  part  of the  state's                                                               
application  for primacy,  which also  includes the  regulations,                                                               
the statutes,  description of program,  and a statement  from the                                                               
Attorney general that DEC has  the necessary authorities. The EPA                                                               
looks at that  as a whole package as it  decides whether to allow                                                               
the  state primacy  or  not. If  a piece  is  missing, the  whole                                                               
process is stopped.                                                                                                             
                                                                                                                                
4:26:53 PM                                                                                                                    
CAMERON LEONARD,  Assistant Attorney General, Department  of Law,                                                               
highlighted  the three  major and  the three  lesser changes.  He                                                               
began  with  section   1,  which  he  said  should   be  read  in                                                               
conjunction  with   section  5   because  they  both   deal  with                                                               
monitoring,  sampling  and  reporting  the  DEC  can  require  of                                                               
permitees  or  of  facilities  outside of  the  permit.  This  is                                                               
important because  conditions that are  placed in permits  can be                                                               
enforced  by third  parties  through what  are  known as  citizen                                                               
suits. So, DEC  needs to have the same authority  that EPA has to                                                               
require  monitoring  either in  permits  (the  part addressed  in                                                               
section  5) or  outside of  permits (address  in section  1). EPA                                                               
raised the concern  that the state's law was not  as stringent as                                                               
the federal  law in these sections.  So all sections of  the bill                                                               
are designed to align state law with the federal requirements.                                                                  
                                                                                                                                
4:28:42 PM                                                                                                                    
MR. LEONARD said  that section 2 was less substantive  and 1 of 3                                                               
sections  that  deal  with  terminology.  The  federal  law  uses                                                               
somewhat  different  terminology from  state  law  and speaks  of                                                               
"discharges  of  pollutants"  whereas   Alaska  law  talks  about                                                               
"disposal of  waste material".  EPA's concern  again is  that the                                                               
state's terms be as broad as  theirs. So the state's law has been                                                               
tweaked to borrow federal terminology.                                                                                          
                                                                                                                                
4:29:39 PM                                                                                                                    
SENATOR  STEVENS asked  him  to  define what  the  waters of  the                                                               
United States means in terms of Alaska.                                                                                         
                                                                                                                                
MR. LEONARD replied  that the definition of "waters  of the U.S."                                                               
is  dynamic  and  controversial  and is  the  subject  of  recent                                                               
Supreme  Court  opinions.  He  didn't know  that  there  was  any                                                               
significant difference.  But in order  to get a  program approved                                                               
by  EPA the  state  has to  essentially have  the  same scope  of                                                               
coverage that  it has  and the  easiest way,  and maybe  the only                                                               
way, to  do that is to  use the same terminology.  The definition                                                               
used by the EPA is in federal  regulation and goes on for one and                                                               
a half pages. So, he wouldn't read it at this time.                                                                             
                                                                                                                                
4:30:56 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  what  was deleted  at  the  end  of                                                               
section 2.                                                                                                                      
                                                                                                                                
MR. LEONARD replied that redundant  language was taken out and it                                                               
was  making it  consistent  with federal  language.  He said  the                                                               
reason the  change is proposed  for section  4 is the  DEC cannot                                                               
exclude activities  from the permit requirement  any more broadly                                                               
than  federal law  does. Under  federal law,  persons discharging                                                               
domestic  sewage  into  a publicly-owned  treatment  work  (POTW)                                                               
don't  need  a permit.  The  way  it reads  now  if  a person  is                                                               
discharging into  a sewerage  system, he  doesn't need  a permit,                                                               
but that term is defined broadly  in state law and would include,                                                               
for example, conduits  that didn't require any  treatment at all.                                                               
So, this  is one  area where EPA  said that state  law is  not as                                                               
inclusive as federal law.                                                                                                       
                                                                                                                                
4:32:49 PM                                                                                                                    
MR. LEONARD  said that section  3 is less substantive  and simply                                                               
clarifies that the  department is the one that  decides what form                                                               
of  authorization  to use  for  a  particular activity  -  again,                                                               
responding to an EPA concern.                                                                                                   
                                                                                                                                
MR. LEONARD  said section  4 is substantive  with and  deals with                                                               
three issues.  They are  all exclusions  to the  requirement that                                                               
people obtain  a permit. He'd  talked about the one  for domestic                                                               
sewerage  into  POTWs where  "surface  water  of the  state"  was                                                               
changed to  "waters of the United  States" to make it  align with                                                               
the federal terminology. The third  issue, "(e)(7)", in section 4                                                               
has to  do with munitions,  which are included in  the definition                                                               
of a  pollutant under the Clean  Water Act. So if  one discharges                                                               
munitions at an  active range and that discharges  into waters of                                                               
the Unites States,  you need a permit. So, again,  the breadth of                                                               
state exclusion language had to be cut back.                                                                                    
                                                                                                                                
CHAIR HUGGINS  asked if EPA  does the permitting for  Eielson Air                                                               
Force Base  and if the  state will  be taking over  permitting on                                                               
military ranges.                                                                                                                
                                                                                                                                
MR. LEONARD  replied that  it's all done  through EPA  right now,                                                               
but if this bill passed, the  state would take over permitting on                                                               
the military ranges.                                                                                                            
                                                                                                                                
4:34:41 PM                                                                                                                    
SENATOR WIELECHOWSKI asked what  if the munitions were discharged                                                               
into a salmon stream, not waters of the United States.                                                                          
                                                                                                                                
MR.  LEONARD  replied  if  this  change  were  to  be  made,  the                                                               
exemption  would only  apply  if  it wasn't  into  waters of  the                                                               
United States.                                                                                                                  
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  what  kind  of  pollutants  are  in                                                               
munitions.                                                                                                                      
                                                                                                                                
MR. LEONARD replied white phosphorus, but he wasn't an expert.                                                                  
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if  pollutants  from munitions  were                                                               
significant.                                                                                                                    
                                                                                                                                
MR.  LEONARD  replied  that  he  couldn't  speak  to  that.  It's                                                               
included in the definition of pollutant so it has to be covered.                                                                
                                                                                                                                
CHAIR  HUGGINS  added  that  there  is  lots  of  pollution  from                                                               
munitions.                                                                                                                      
                                                                                                                                
4:36:13 PM                                                                                                                    
MR.  LEONARD  said   that  section  5  was   tied  to  monitoring                                                               
requirements   and  he   characterized  sections   6  and   7  as                                                               
clarification  of  terminology  that "waste  materials"  includes                                                               
"pollutants" which is what federal law uses.                                                                                    
                                                                                                                                
4:36:46 PM                                                                                                                    
He said  section 8 deals  with a substantive issue.  He explained                                                               
that under the Clean Water  Act, negligent violations of the NPDS                                                               
can  subject the  violator to  criminal enforcement.  Under state                                                               
law in  contract, DOL could  only pursue criminal  enforcement if                                                               
the  violations were  done with  gross negligence  and those  are                                                               
defined differently in the law  - gross negligence being a higher                                                               
level  of negligence.  EPA pointed  out the  DEC was  requiring a                                                               
higher state of culpability to  support criminal enforcement than                                                               
was required  under the  federal law.  So, the  bar needed  to be                                                               
lowered. Section  8 changes current  state law that  provides for                                                               
criminal penalties  for violations of  DEC statutes and  says for                                                               
this  program   only  mere  negligence  would   support  criminal                                                               
sanctions.                                                                                                                      
                                                                                                                                
4:37:58 PM                                                                                                                    
CHAIR  HUGGINS  asked  where  the   provision  is  that  requires                                                               
sampling.                                                                                                                       
                                                                                                                                
MR.  LEONARD replied  section  1  deals with  it  outside of  the                                                               
context of a  permit; section 5 deals with the  same subject, but                                                               
within the discharge permits.                                                                                                   
                                                                                                                                
4:38:17 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked how  many additional  state employees                                                               
will be needed to assume primacy.                                                                                               
                                                                                                                                
4:38:39 PM                                                                                                                    
LYNN   KENT,  Director,   Division   of   Water,  Department   of                                                               
Environmental Conservation  (DEC), answered that  the legislature                                                               
passed SB 110  in 2005 that directed her to  proceed with primacy                                                               
and  it had  a  fiscal  note. So,  implementing  this program  is                                                               
already in DEC's base budget. Hence,  this bill has a zero fiscal                                                               
note. She clarified  that the resources came with SB  110 and the                                                               
number of  positions that include  both the existing  program and                                                               
the  new positions  that  will implement  the  program when  it's                                                               
approved by EPA total 43 positions.                                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI  asked how much assuming  primacy would cost                                                               
the state.                                                                                                                      
                                                                                                                                
MS.  KENT replied  that the  existing program  requires that  the                                                               
state review all of the EPA  permits and certify that they comply                                                               
with  the  state's water  quality  standards.  It  is kind  of  a                                                               
parallel   program  in   terms  of   permitting  with   EPA.  The                                                               
incremental cost to  get from the program to the  NPDS program is                                                               
about $1.5  million. That was the  amount that was in  the SB 110                                                               
fiscal note.                                                                                                                    
                                                                                                                                
4:40:16 PM                                                                                                                    
SENATOR STEVENS said he understood  that industry would pick up a                                                               
major share of  the cost. He asked if the  state assumes primacy,                                                               
would industry  still pick up  a major share  of the costs  or is                                                               
the state assuming more.                                                                                                        
                                                                                                                                
MS. KENT  replied that the program  is designed to rely  upon the                                                               
existing  state  policy  for  the   fee  it  charges  for  direct                                                               
services. So,  under SB 361  a number  of years ago,  DEC charged                                                               
for its direct  services, which they do  for state certifications                                                               
of the  federal permits today.  With NPDS primacy, that  same fee                                                               
structure will apply,  but it will go up a  little bit to reflect                                                               
the  state's additional  work load.  The fiscal  note for  SB 110                                                               
estimated that at full implementation  of primacy, about $300,000                                                               
of the  $1.5 million would  be replaced  with fees as  opposed to                                                               
general funds.                                                                                                                  
                                                                                                                                
SENATOR  STEVENS  asked  if  industry  would  pick  up  about  70                                                               
percent.                                                                                                                        
                                                                                                                                
MS.  KENT  couldn't recall  the  actual  percentage, but  it  was                                                               
somewhat less than 70 percent.                                                                                                  
                                                                                                                                
4:41:48 PM                                                                                                                    
SENATOR STEDMAN asked  how many states have primacy  and how many                                                               
don't.                                                                                                                          
                                                                                                                                
MS.  KENT replied  that 45  states already  have primacy;  Alaska                                                               
will  make  the 46th.  She  said  the  Clean Water  Act  actually                                                               
envisioned that states would run the program rather than EPA.                                                                   
                                                                                                                                
CHAIR HUGGINS asked  what the state has learned to  date in terms                                                               
of industry support.                                                                                                            
                                                                                                                                
4:42:56 PM                                                                                                                    
COMMISSIONER HARTIG replied that  more people in industry support                                                               
this than  ever before. Timing  is everything  and if you  have a                                                               
real  large project,  no matter  what the  industry is,  even one                                                               
month's delay  is extremely expensive.  He said one of  the other                                                               
primary  drivers   is  getting   modifications  to   permits.  He                                                               
explained that the permits have  a five-year life under the Clean                                                               
Water Act. So, any time there  is any minor change to a discharge                                                               
even  the  frequency,  a  modification  is  required.  Under  EPA                                                               
regulations, you  have to go  through the same public  process as                                                               
getting  the original  permit.  So, they  are  very reluctant  to                                                               
issue modifications, which holds up businesses, too.                                                                            
                                                                                                                                
COMMISSIONER HARTIG said the DEC  is getting a lot of cooperation                                                               
from EPA  in turning this program  over to the state.  During all                                                               
the discussions,  an awareness has  developed about  the benefits                                                               
of having local people be  responsive to the local businesses and                                                               
government in writing  these permits. So, there has  been more of                                                               
a consensus  and people  are becoming  more comfortable  with the                                                               
state's level of competence.                                                                                                    
                                                                                                                                
4:46:37 PM                                                                                                                    
CHAIR  HUGGINS asked,  assuming  this bill  passes this  session,                                                               
when would the state actually take primacy.                                                                                     
                                                                                                                                
COMMISSIONER  HARTIG replied  that the  plan right  now is  to go                                                               
back  to the  EPA with  revisions to  the draft  application this                                                               
fall  and they  will  turn  it around  and  the  state will  have                                                               
primacy  by this  time  next  year. There  will  be a  three-year                                                               
phase-in.                                                                                                                       
                                                                                                                                
CHAIR HUGGINS asked if EPA would retain oversight.                                                                              
                                                                                                                                
COMMISSIONER  HARTIG replied  yes EPA  retains the  authority and                                                               
duty to review permits. EPA can veto permits.                                                                                   
                                                                                                                                
4:49:15 PM                                                                                                                    
CHAIR HUGGINS  asked if  he had concerns  about operating  in the                                                               
military environment in the state.                                                                                              
                                                                                                                                
COMMISSIONER HARTIG  replied no; his  own experience with  DEC is                                                               
that the military has worked with them if something comes up.                                                                   
                                                                                                                                
4:49:53 PM                                                                                                                    
SENATOR GREEN  asked if  any changes  that are  made to  the U.S.                                                               
code would automatically be picked up by the state.                                                                             
                                                                                                                                
MR. LEONARD replied yes.                                                                                                        
                                                                                                                                
SENATOR GREEN  asked if  the term "waters  of the  United States"                                                               
has  any reference  in  SB  91 that  would  lead  someone to  the                                                               
definition in U.S. Code.                                                                                                        
                                                                                                                                
MR. LEONARD  replied that  actually that term  is not  defined in                                                               
the U.S.  code; it is defined  in the federal regulations  and it                                                               
is also  not defined  in this  bill; it is  defined in  the state                                                               
regulations that  implement this  bill. He  offered to  get those                                                               
for her.                                                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI asked  if all little creeks  in Alaska, like                                                               
Chester Creek, are considered waters of the United States.                                                                      
                                                                                                                                
MR.  LEONARD  replied  that generally  they  are  all  considered                                                               
waters of  the U.S.,  but it  is an  area of  ongoing litigation.                                                               
Chester Creek  is definitely waters of  the U.S. - as  long as it                                                               
is a tributary.                                                                                                                 
                                                                                                                                
4:51:44 PM                                                                                                                    
VICKI  PORTWOOD, Executive  Officer,  Alaska State  Homebuilder's                                                               
Association, supported  SB 91. She  explained that right  now her                                                               
members struggle with having any  kind of a relationship with EPA                                                               
personnel who  come up  and get  off the  plane, inspect  the job                                                               
sites, fine  the company and  then get back  on the plane  and go                                                               
back to the Lower 48. There is no  one to talk things over with -                                                               
to help  mitigate their  problems and  to learn  what it  is that                                                               
they are doing incorrectly.                                                                                                     
                                                                                                                                
4:54:17 PM                                                                                                                    
CHAIR  HUGGINS asked  if  the EPA  scenario  Ms. Portwood  talked                                                               
about was common.                                                                                                               
                                                                                                                                
COMMISSIONER HARTIG  replied that  his impression  is that  it is                                                               
fairly common. EPA  has one permit writer in the  state of Alaska                                                               
and he  didn't know how  many in Seattle,  but a majority  of the                                                               
permits  are  written  out  of  Seattle and  a  majority  of  the                                                               
enforcement is out of Seattle as well.                                                                                          
                                                                                                                                
CHAIR HUGGINS asked if Alaska  had this authority, what would its                                                               
presence look like to industry.                                                                                                 
                                                                                                                                
MS.  KENT replied  that  DEC  intends to  have  a compliance  and                                                               
enforcement  that  is as  stringent  and  as expansive  as  EPA's                                                               
program.  So  their goals  would  mirror  EPA's  and that  is  to                                                               
inspect  every major  facility once  a  year and  to inspect  the                                                               
minor  facilities  once   every  five  years  -   so  they  would                                                               
definitely  have a  field  presence. She  intends  to have  staff                                                               
located in Anchorage, Fairbanks and Juneau.                                                                                     
                                                                                                                                
4:55:18 PM                                                                                                                    
SENATOR GREEN  moved Amendment 1 as  follows: On page 4,  line 4,                                                               
to   delete   "listed"   and  insert   "as   defined"   following                                                               
"pollutants" and  on page  4, line  10 insert  "and(d)" following                                                               
"(a)".                                                                                                                          
                                                                                                                                
MR. LEONARD  said that both  changes are minor tweaks  and really                                                               
just reflect the fact that they  were running out of time between                                                               
concluding  their  discussions with  EPA  and  getting this  bill                                                               
introduced.  EPA   made  these  suggestions  a   few  days  after                                                               
discussions were finished.                                                                                                      
                                                                                                                                
4:56:37 PM                                                                                                                    
On the  first change the  EPA didn't want  it to be  implied that                                                               
only the list  was incorporated. The second one  only makes sense                                                               
if you  look at  AS 46.03.790 to  see what it  says now,  but the                                                               
basic  concern underlying  this  change was  section 790(d)  that                                                               
deals with  oil spills.  The EPA was  concerned that  because oil                                                               
spills are  in violation of  the act  when there's no  permit for                                                               
someone to discharge oil into the  water, that they have the same                                                               
state of mind  of negligence to enforce  criminal enforcement for                                                               
oil spills.  Their concerns  were addressed  by adding  "and (d)"                                                               
after "a".                                                                                                                      
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if this  means that  an organization                                                               
that negligently  spilled oil would  still potentially  be guilty                                                               
of a Class A misdemeanor.                                                                                                       
                                                                                                                                
MR. LEONARD  replied yes. Basically,  it means there is  a choice                                                               
of which enforcement tool to use. You  can only get up to a Class                                                               
A misdemeanor under new section 790(i).                                                                                         
                                                                                                                                
     If  the spill  is  big  enough, you  can  go under  the                                                                    
     existing  790(d) and  pursue felony  charges, but  then                                                                    
     you would have to meet  the higher standard of criminal                                                                    
     negligence  or   alternatively,  you  could   do  civil                                                                    
     enforcement  and seek  penalties. So,  the state  would                                                                    
     have that  choice if this  bill were to be  amended and                                                                    
     passed.                                                                                                                    
                                                                                                                                
4:59:40 PM                                                                                                                    
Amendment 1 was adopted without objection.                                                                                      
                                                                                                                                
4:59:55 PM                                                                                                                    
SENATOR STEDMAN moved  to pass from committee SB  91, as amended,                                                               
with individual  recommendations. There  were no  objections, and                                                               
CSSB 91(RES) moved from committee.                                                                                              

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