Legislature(2023 - 2024)ADAMS 519
02/22/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB39 || HB41 | |
| Fy 2024 Budget Overview: Department of Environmental Conservation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 39 | TELECONFERENCED | |
| += | HB 41 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 22, 2023
1:49 p.m.
1:49:15 PM
CALL TO ORDER
Co-Chair Johnson called the House Finance Committee meeting
to order at 1:49 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
ALSO PRESENT
Jason Brune, Commissioner, Department of Environmental
Conservation; Megan Kohler, Acting Administrative Services
Director, Department of Environmental Conservation.
SUMMARY
HB 39 APPROP: OPERATING BUDGET/LOANS/FUND; SUPP
HB 39 was HEARD and HELD in committee for further
consideration.
HB 41 APPROP: MENTAL HEALTH BUDGET
HB 41 was HEARD and HELD in committee for further
consideration.
FY 2024 BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
Co-Chair Johnson reviewed the meeting agenda.
HOUSE BILL NO. 39
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
HOUSE BILL NO. 41
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; and providing for
an effective date."
1:49:57 PM
^FY 2024 BUDGET OVERVIEW: DEPARTMENT OF ENVIRONMENTAL
CONSERVATION
1:49:57 PM
JASON BRUNE, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, introduced himself. He provided a PowerPoint
presentation titled "Department of Environmental
Conservation: House Finance Committee," dated February 22,
2023 (copy on file) beginning with the Department of
Environmental Conservation's (DEC) mission to protect human
health and the environment and to look after the economic
and social well-being of Alaskans (slide 2). The department
strove to partner with the regulated community to ensure
development (i.e., fishing, mining, tourism, cruise ships)
was done with an emphasis on protecting human health and
the environment.
Commissioner Brune briefly discussed the department's
values on slide 3. He noted that customer service was of
utmost importance to the department. He highlighted values
including collaboration, integrity, and objectivity. He
turned to slide 4 and highlighted work done by the
department in four of its five divisions. He noted that a
colleague would discuss the Administrative Services
Division later in the presentation. The department oversaw
programs put in place by Congress through the Clean Air
Act, Clean Water Act, and Safe Drinking Water Act. The
state had primacy over the aforementioned programs. He
elaborated that under a federalist system, states had the
opportunity to take over the programs. The department was
formed 51 years ago just after the formation of the
Environmental Protection Agency (EPA). The department's
divisions were similar to the programs passed by Congress
including water quality and the NPEDS [National Pollutant
Discharge Elimination System]; environmental health
including the state veterinarian and the state drinking
water program; and the Division of Spill Prevention and
Response (SPAR).
Commissioner Brune shared that he had worked on clean up
after the Exxon Valdez oil spill and it was an accident the
state wanted to ensure was never repeated. He stated it was
imperative for the department to work with the oil industry
and communities to guarantee there was a focus on
prevention. He recognized there were times when spills
occurred that required clean up, but the department's focus
was on prevention.
1:53:10 PM
Commissioner Brune turned to slide 5 titled "Working Hard
for Alaskans: Measures of Regular Duties Jan. 1 - Dec. 31."
He relayed that DEC had authorized over 10,000 items
through permits, approvals, certifications, and plan
reviews for the regulated community in Alaska. He
recognized that the number was down from 2021, but some of
the permits were renewed every other year. He relayed DEC
conducted inspections to ensure permit holders followed the
stipulations and requirements. There had been approximately
50 percent more inspections and site visits in 2022, which
was directly related to COVID-19. The department had
focused on trying to conduct virtual inspections during the
COVID-19 pandemic, which DEC was trying to incorporate more
into its daily routine in order to save travel costs and
have a better relationship with the regulated community to
help them better protect human health and the environment.
Commissioner Brune continued to review slide 5. He
highlighted that during the pandemic, approximately 85 to
90 percent of DEC's staff were teleworking. He believed
there was a substantial opportunity to evaluate employees
based on the work they were supposed to be doing and not on
the time they were in their seat. He elaborated that the
department was evaluating employees on the number of
widgets they needed to create, the number of permits they
needed to authorize, and how many inspections they needed
to do. He estimated that about 75 percent of DEC employees
continued to telework at least two days a week. He
underscored it would help save the department money and
would help with retention in the long term. He explained
that working from home meant it was necessary to scan the
department's 51 years of material to ensure it was
available to employees electronically. He shared that over
500 file cabinets worth of material had been eliminated
over the past two years.
Commissioner Brune discussed retention on slide 5. He
relayed that when he started as commissioner, DEC had been
losing between 25 to 30 out of 100 employees per year. He
stressed it was untenable to lose three out of 10 employees
on an annual basis when the department was trying to do
timely, science-based, legally defensible permits for the
regulated community. He stressed it was necessary to put
things into place to improve the situation. He relayed that
teleworking had helped in addition to showing employees
there were career opportunities to matriculate up at DEC.
The department was working to learn about employees' goals
and what it could do to encourage staff to remain with the
department. The department put an emphasis on training, and
over 40 hours of training per employee occurred during the
past year. He underscored that the turnover rate had fallen
from 30 percent to 14 percent. He clarified he was not
excited about a 14 percent turnover rate; however, in the
year of the "great resignation" he was proud of only losing
14 percent of the department's employees. He stressed that
training was a huge component.
1:57:05 PM
Commissioner Brune reviewed an organizational chart on
slide 6. He stated the leadership team had over 100 years
of combined experience working for the state. He
highlighted various staff, their experience, and roles
within the department.
Commissioner Brune moved to slide 7 and discussed DEC
vacancy rates. He relayed that DEC put a keen emphasis on
retention and had created a leadership academy that met
regularly to talk about projects that could be taken on to
improve DEC. The slide showed a budgeted FY 22 vacancy rate
of 5.24 percent and an actual 6.37 percent vacancy rate.
2:00:29 PM
Representative Galvin thought it looked like a [positive]
record setting vacancy rate compared to other areas in the
state. She asked for the number of vacant positions.
Commissioner Brune answered there were 516 positions in the
department. He explained that it was considered a zero
percent vacancy rate if an employee left a position that
cost $100,000 and it was filled the next day. He elaborated
that if the position was vacant for a couple of months a
percentage of the salary was factored into the budgeted
vacancy rate.
Representative Galvin asked for the current number of
vacant positions.
Commissioner Brune believed there were currently 15 vacant
positions. He advocated for either filling positions or
getting rid of them. He elaborated there had been some
positions vacant for one to two years and he had emphasized
the positions either needed to be filled or eliminated. The
department tried to emphasize promotion to higher level
positions. The current number of vacant positions was
between 10 and 15.
Representative Josephson thought it sounded like the
employment situation was vastly improved. He asked about
the removal of positions. He asked if it indicated the
department was not going to do work associated with
positions that it eliminated. He asked if it was a concern.
He relayed that he had passion for the SPAR Division, which
was a historically overworked agency. He asked how the
conundrum was resolved.
Commissioner Brune replied that he also had an affinity for
SPAR. He stated that what he had to do in his first two
years [in the position] was not something he had been
comfortable with. He elaborated that the department had
eliminated 14 positions because the funding sustainability
for the division was not there. He had been told when he
started that it would be necessary to eliminate 30
positions in four years. He explained that SPAR was funded
with $0.04 per barrel [of oil] for the prevention account
and $0.01 per barrel for the response account.
Additionally, the division received .0095 cents per gallon
of the refined fuel surcharge [implemented in 2015]. He
expounded that when the 14 positions had been eliminated
there had been around 30 vacant positions at the time he
had communicated to the SPAR director to come back and
advocate for the positions if they were needed in the
future. He highlighted that the training hours at SPAR were
around 100 hours per employee, which was nearly double the
DEC average. He underscored that the division's retention
rate was the best in the department. He expressed
excitement that the department had turned SPAR around. He
indicated his support for an increase to 1.5 cents in the
refined fuel surcharge to bring sustainability to the
division. He stressed that sustainability of SPAR was
imperative.
2:05:44 PM
MEGAN KOHLER, ACTING ADMINISTRATIVE SERVICES DIRECTOR,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, introduced
an overview of the operating budget beginning on slide 8.
Co-Chair Johnson stated that the committee had received the
official vacancy rates, which had been significantly higher
[than the rates provided during the presentation]. She
reviewed vacancy rates the committee had previously
received including admin 15.9 percent, air quality at 13.1
percent, SPAR at 9.3 percent, and water at 7.4 percent. She
asked how the department had calculated the vacancy rate
[previously spoken to by Commissioner Brune].
Commissioner Brune deferred to his staff.
Ms. Kohler replied that the department was running at a 10
to 15 percent vacancy rate. The vacancy rate was a monetary
value planned for by the department as people moved through
the system and left state service. The department's actual
monetary vacancy rate for FY 22 in personal services was
6.37 percent. She noted the percentage did not reflect
actual positions.
2:08:09 PM
Co-Chair Johnson requested follow up with a reconciliation
showing the current vacancy rate.
Commissioner Brune replied in the affirmative. He
referenced positions approved by the legislature the
previous year associated with the [federal] Infrastructure
Investment and Jobs Act (IIJA). He relayed that some of the
positions had not yet been created by the Office of
Management and Budget (OMB), which may account for some of
the discrepancies. He agreed to follow up with the
information.
Co-Chair Johnson noted that the slide specified FY 22. She
stated the rate received from OMB was significantly
different. She asked the department to follow up.
Commissioner Brune agreed to follow up.
Representative Stapp stated his understanding of the
numbers. He surmised the department took the vacancy factor
out of the equation and showed the percentage of vacant
positions above the actual budgeted rate.
Commissioner Brune believed the statement was accurate. He
added that the numbers given to the committee by OMB were
at a given point in time and did not reflect an average
over the course of the year. He believed the information in
the presentation may reflect the final fiscal year figure.
He would follow up with specifics.
2:10:11 PM
Ms. Kohler discussed slide 8 showing FY 22 actuals, the FY
23 management plan, and the FY 24 governor amend. She
highlighted an influx of IIJA funding beginning in FY 23.
She addressed the budget for the Division of Administration
on slide 9. She highlighted a one-time funding request for
office furniture replacement. She detailed that DEC offices
had not been updated since the early 1990s in Anchorage and
other locations. She explained that the [2018] earthquake
had caused substantial damage and the department was
looking to rectify the issues from a safety standpoint. She
noted the funding was federal. The other item shown on the
slide was a fund source change to better utilize federal
funding.
Co-Chair Johnson asked if the state had insurance for
damaged office furniture.
Ms. Kohler answered DEC had used insurance to fix large
scale damage. She detailed the roof had come off of the
building and resulted in water damage. She explained that
the scale of the problem had progressed as time had gone
by.
Representative Hannan asked if the $2.5 million was for the
Division or Administration or the entire department.
Ms. Kohler answered that the funding was for the entire
department.
Ms. Kohler briefly discussed the buildings, maintenance,
and operations budget on slide 10. The department owned one
building housing the environmental health lab, which was
funded primarily with undesignated general funds (UGF) and
a small amount of indirect federal funding. The specific
budget contained no significant changes.
2:13:41 PM
Ms. Kohler moved to slide 11 and discussed the budget for
the Division of Environmental Health. She noted the
division included the environmental health lab, but the
building, maintenance, and operations were billed
separately. She highlighted a large influx of IIJA funding
for permitting and testing programs. The budget included an
increment to enable the department to accept the associated
fees commensurate with the FY 23 supplemental. She
explained the division was consistently seeing unbudgeted
reimbursable services agreements (RSA); therefore, the
budget included a technical adjustment in order to
eliminate paperwork.
Representative Galvin asked what the "other" funds
represented in the graph on slide 11.
Ms. Kohler replied that the segment reflected interagency
receipts for DEC's ability to accept funds.
2:15:34 PM
Ms. Kohler discussed the operating budget for the Division
of Air Quality on slide 12. She highlighted an increment
for three state implementation plans (SIPs) through 2026.
She detailed the processes were multiyear/multidecade with
thousands of pages of reporting, requirements, and
planning. The second increment on the slide was for the
Rural Community Monitoring Network responsible for
monitoring wildland smoke across the state.
Ms. Kohler moved to the SPAR budget on slide 13. The
department had would receive $7 million in federal funding
over five years for assessment and verification of Alaska
Native Claims Settlement Act (ANCSA) contaminated lands.
Representative Coulombe asked about air quality on slide
12. She noted the request for two additional positions for
air quality monitoring. She looked at an explanation
specifying the change would require less staff time. She
asked for the reason for the positions.
Ms. Kohler replied that additional monitors were going out,
which had been obtained through federal funding. She
explained that many communities were investing in the low
cost sensors. She detailed that the positions would help
maintain the year-round operation.
Representative Coulombe asked if the monitoring network
used new technology.
Commissioner Brune replied it was new technology. He
elaborated that many people were buying their own "purple
air" monitors. The department needed to ensure it had the
experts that were talking about where to position the
monitors. He stated it was great to have citizen
scientists, but they could often have their own agendas.
The department needed to make certain it was working with
the individuals. He detailed that DEC had received
substantial IIJA funding to purchase the systems around the
state. The department needed to make sure the monitors were
installed in the correct locations and that data from the
monitors was properly interpreted. The network was used to
understand where air quality issues were coming from such
as fires in Russia, coal burning in China, or issues in
Alaska.
2:19:26 PM
Representative Josephson asked where the department stood
on the regulation of effluent discharge and air quality
monitoring for the cruise industry.
Commissioner Brune replied that every cruise ship entering
the state was inspected within the first few weeks of
coming to port. He explained that inspections had not
previously been done on small ships; at the time, only
large ships had ocean rangers onboard. He explained there
were not ocean rangers on every ship, but the department
was using the funding to inspect ships with DEC staff. The
department also conducted unannounced inspections on a
regular basis. The department was monitoring the water
quality in common corridors and ports used by ships and
fishing boats. He noted that immediately prior to the
pandemic, there had been good progress on legislation to
redo the ocean ranger program. The work had stalled due to
the pandemic and the idea had not been reintroduced. The
department hoped to use the money collected for the ocean
ranger fee to upgrade the shoreside wastewater treatment
facilities and electrify docks, which would have incredible
improvement on the environment resulting in fewer
emissions.
Commissioner Brune explained that many of the communities
visited by cruise ships were called 301(h) waiver
communities exempted from the Alaska Pollution Discharge
Elimination System requirements. For example, Ketchikan was
allowed to discharge 1.5 million fecal coliform units per
100 milliliters of water from its wastewater treatment
plant. He stressed that the maximum for the cruise industry
was 40 fecal coliform units per 100 milliliters of water.
He highlighted that the state held its communities to a
different standard (than the cruise industry) because of
the Environmental Protection Agency (EPA) 301(h) waiver. He
explained that if legislation was introduced, DEC would try
to upgrade those communities.
Commissioner Brune relayed that DEC was inspecting all
cruise ships and making it a point to communicate its
findings, especially to smaller ships. He stated that "Nat
Geos" were discharging 2 to 3 million fecal coliform units
per 100 milliliters of water. He did not find them to be
good actors. He reiterated his earlier statement that
smaller ships had not previously been inspected. The state
was finally holding them accountable.
2:23:00 PM
Representative Josephson asked for an explanation of the
term "Nat Geos."
Commissioner Brune replied the term stood for National
Geographic. He stated that the company that published
photos of Alaska and worked to "lock up" Alaska was in the
state's waters discharging higher levels of fecal coliform
than many of Alaska's communities. He stated the boats were
not being good actors.
Representative Josephson asked if the 301(h) waiver was for
local municipalities.
Commissioner Brune answered that the 301(h) waiver allowed
seven to nine of Alaska's communities to remain under the
oversight of the EPA rather than the state of Alaska. He
elaborated that Alaska gained primacy of the NPDES program
over a period of time from 2008 to 2012. The permits were
usually renewed every five years and had gradually come
under state oversight; however, communities with the 301(h)
waivers wanted to remain under the waiver program because
it had lower requirements (they did not have to put in
secondary or tertiary discharges). He highlighted that
Anchorage was the largest community still on the waiver and
the cost to upgrade the system would be between $1.5
billion and $2 billion in addition to operational expenses
on an annual basis. He explained that the costs would be
put on ratepayers. The same was true if there were upgrades
to Ketchikan. The communities on the waiver were happy to
remain under the waiver because it kept their costs down.
However, there was an environmental impact in some cases,
especially for subsistence harvesters in some of the
Southeast communities.
2:24:59 PM
Representative Josephson remarked that he received
correspondence about Anchorage's lack of secondary and
tertiary backup and he had known about the issue for over
20 years. He stated that the issue struck him as an
externality that needed to be addressed in the budgets
rather than continuing to operate at "this baseline." He
thought it was an example of underfunding something that
would be good for Alaska.
Commissioner Brune completely agreed. He highlighted there
were billions of dollars of IIJA funding available to help
the communities upgrade. He relayed that the ongoing
operating expenses would still be put on the ratepayers. He
relayed that the Village Safe Water Program and State
Revolving Loan Fund Program had been funded significantly
to help the communities get off of the 301(h) waiver and
upgrade the quality of their wastewater discharges. He
believed it was incredibly important.
Representative Galvin stated her understanding that federal
funding may provide an opportunity for the state,
especially given that Anchorage was the largest 301(h)
community, and the waiver was essentially allowing the city
to pollute the water. She understood it would be an
additional cost to citizens, but there would be an
opportunity to make the change in the near term.
Commissioner Brune answered it was absolutely true for the
smaller 301(h) waiver communities in Southeast. He stated
that DEC used science as the foundation of its decision
making and the science for the AWWU [Anchorage Water and
Wastewater Utility] Asplund facility had shown there were
not fecal impacts to Cook Inlet due to the daily flow in
and out of the inlet. He had seen that secondary and
tertiary treatment were not necessary in Anchorage. He
stated it did not mean the changeover should not be done.
He highlighted there were several billion dollars for the
communities, yet the work in Anchorage would cost that
amount. He believed a funding request for Anchorage would
be a separate issue.
2:28:31 PM
Representative Galvin surmised that perhaps Anchorage would
not be as important considering the science and impact. She
stated her understanding that Ketchikan and other Southeast
communities with the 301(h) waiver were impacted based on
the science the department had. She understood there was
opportunity, but there would be costs in addition to the
federal dollars.
Commissioner Brune confirmed there was funding available
for communities like Ketchikan. He explained that the
systems needed to be upgraded with UV treatment,
chlorination, or something similar because there were
impaired water bodies around Ketchikan due to high fecal
levels. He stressed that that the issue had to be addressed
scientifically and from a management perspective,
otherwise, DEC could not get a 401 certification of the
permit (an extension of the waiver). He stated that DEC had
to ensure water quality standards were maintained and it
could not do so without some kind of upgrade. He confirmed
IIJA money was available to upgrade the systems. There
would be additional cost, but the funds were a great
opportunity.
Representative Galvin asked for detail about the 401
permit.
Commissioner Brune answered the Division of Water gave 401
certifications of water quality standards for 301(h) waiver
permits or Section 404 permits. He remarked that the state
was interested in assuming the 404 dredge and fill program.
He explained that the 401 certification was DEC's way to
ensure an authorized federal permit would be maintained to
meet water quality standards.
Co-Chair Johnson reminded committee members the present
meeting was to discuss the budget.
Representative Stapp remarked on Commissioner Brune's
statement that part of the funding would be paid by local
utility ratepayers. He asked for verification that in order
to access the federal funds, public utilities would be
leveraging those funds without the legislature's
involvement.
Commissioner Brune answered that DEC had a loan program
that allowed the communities to borrow money through the
State Revolving Loan Fund at low interest rates of 1.5 to 2
percent. He explained that 49 percent of the borrowed
funding was forgivable. He clarified that the action did
come through the legislature from the EPA and out to
communities through the State Revolving Loan Fund.
2:32:10 PM
Representative Stapp asked if the loan funding was
forgivable for the Municipality of Anchorage as well.
Commissioner Brune replied that there were forgivable
programs through the State Revolving Loan Fund that he
believed the Municipality of Anchorage was able to utilize.
He noted that typically there had to be an income issue. He
would follow up.
Ms. Kohler discussed the Division of Water on slide 14. The
first was a one-time reversal of $1 million associated with
a 404 feasibility study. She explained that the funding had
been appropriated by the legislature in FY 23 and the
increment had been inadvertently included in the FY 24
budget. The second increment highlighted on the slide was
money awarded to BLM through the Gravel to Gravel Keystone
Initiative. The department was excited to expand its
partnership with BLM to increase assessments of baseline
conditions of surface waters over a larger area in the
Arctic-Yukon-Kuskokwim region.
Ms. Kohler continued to review Division of Water budget
highlights on slide 14. She addressed budget items for the
Sewer Overflow and Stormwater Reuse Municipal Grants
program. She explained that the funding source should be
corrected from UGF to general fund match for federal
dollars. The program was intended to address sanitary sewer
overflows and storm water management.
Co-Chair Johnson referenced the increments funded with IIJA
money on slide 14. She asked if the items would have to be
funded with general funding the following year.
Ms. Kohler answered that the federal BLM funding ran
through 2028 and the department did not anticipate
requesting general funds in the future. The cost moving
forward associated with the Sewer Overflow and Stormwater
Municipal Grant Program was $42,600 in general funds.
Representative Josephson asked what Gravel to Gravel
Keystone Initiative was.
Ms. Kohler responded that she would follow up with the
information. She remarked that BLM had received the funding
to pursue the program.
2:36:09 PM
Commissioner Brune looked at slide 15 titled "DEC FY2024
Operating Budget: Assumption of CWA 404 Program." He stated
that the increment had been introduced in the governor's
amended budget the previous week. The federal government
passed laws including the Clean Air Act and Clean Water Act
and under a federalist system, states had the opportunity
to assume primacy over the programs. The state had primacy
over the Clean Air Act and NPDES for over 51 years and for
15 years respectively. He elaborated that the previous
th
year, the legislature approved Alaska as the 49 state to
apply for primacy for the Resource Conservation and
Recovery Act (RCRA) program. The department would submit
its application and would hopefully get approval from the
EPA in July of 2024.
Commissioner Brune highlighted that the legislature had
appropriated $1 million to DEC for a feasibility study of a
404 program. He relayed that SB 27 had passed the
legislature in 2013, instructing DEC to pursue primacy of
the 404 dredge and fill program. He elaborated that oil
prices had crashed soon thereafter. He detailed that the
program had not yet been fully assumed by the state and due
to reduced oil prices, DEC's efforts to pursue the program
had been cut. He shared that in 2018 the governor had asked
about the one thing Commissioner Brune could do to improve
the investment climate in Alaska as well as the
environment. His answer had been to do what the legislature
instructed, which was to assume the 404 program. In 2022,
the numbers had been included in the budget. He expounded
that DEC hired the firm Jade North to do an independent
study and the recommendation was for the state to move
forward on assuming the program. He explained that three
states had primacy over the 404 program including New
Jersey, Michigan, and most recently Florida. There were a
number of other states pursuing primacy.
Commissioner Brune highlighted the ~$5 million UGF
increment and 28 positions related to state assumption of
the 404 program for FY 24 on slide 15. The next year the
number of positions would increase to 32 positions and the
UGF increment would reduce to $4.7 million. He explained
that the application process had to be UGF funded, but like
the NPDES, RCRA, and Air Quality programs, primacy programs
were typically funded through a combination of federal and
state dollars and fees charged to the regulated community.
The department had made a commitment on the record that it
would be looking at a fee program to help diversify the
funding sources for the program going forward. He relayed
that $4.7 million would be the annual cost of administering
the program. There was not currently federal funding for
assumption of the program but the state was pursuing the
concept with its federal delegation and the Environmental
Council of States (DEC colleagues nationwide). He
anticipated that the cost of the program would be
diversified within a couple of years.
2:41:01 PM
Representative Josephson stated his understanding that
Michigan was interested in returning the program to the
federal government. He wondered if Commissioner Brune knew
if it was true.
Commissioner Brune answered that one of his close
colleagues on the Environmental Council of States was the
commissioner for Michigan's version of DEC and she had
never vocalized anything of the sort. He stated that his
colleague had communicated the program was going well and
Michigan liked having the local oversight and knowledge
that helped the state permit projects and protect the
environment, while responsibly developing its wetlands.
Representative Josephson pointed out that Florida had to
request funding for an additional 17 positions [associated
with 404 primacy]. He had concerns about growing government
in the program given that the Army Corps of Engineers had
about 50 staff and an [annual] cost of approximately $8
million to monitor the program. He asked why it would be
possible for Alaska to do the work with 32 staff and less
than $5 million.
Commissioner Brune replied that Florida had a great problem
that "we all want to have." He elaborated that Florida had
so much development going on because people were wanting to
telework and build their homes that 404 permits were going
through the roof. He relayed that Alaska had more wetlands
than the Lower 48 combined. He elaborated that Alaska had
175 million acres of wetlands and had only developed 0.1
percent, whereas the Lower 48 had developed over half of
its 200 million acres of wetlands. He stated the issue was
about the amount of development occurring and not about how
many wetlands a state had. He emphasized that Florida had
many more projects occurring and needed additional staff.
Commissioner Brune spoke to Representative Josephson's
question about the state's suggestion that it could operate
the program with 32 staff versus the Army Corps of
Engineers' 48 staff. He explained that the corps would
continue to maintain around 25 percent of the permitting
authority even if the state assumed authority over the 404
program. He referenced the Rivers and Harbors Act and
relayed that Congress did not allow the corps to delegate
its authority. The department believed it would have the
ability to do 18 actions [per employee] per year versus the
corps' 16 actions per employee per year.
Representative Josephson was interested to know whether
stakeholders would welcome the fees Commissioner Brune had
mentioned. He looked forward to seeing the correspondence.
Commissioner Brune answered he had conversations with
placer miners, homebuilders, and individuals with the
Associated General Contractors (AGC) who were willing to
pay for the increased customer service, accountability, and
Alaska expertise overseeing the programs. He stated that a
number of organizations had endorsed the idea including RDC
[Resource Development Council], AGC, the Alaska Support
Industry Alliance, the state chamber, and others. He
reported he had been transparent about the department's
commitment to talking about fees during the process. He
shared that he had been involved in helping pass an agency
fees bill in 2000 or 2001, which allowed the department to
pass the cost of permitting onto the regulated community.
The same had been done for the NPDES program.
2:45:45 PM
Representative Galvin asked for verification that the goal
was to get more control over the permitting to make it more
efficient for stakeholders.
Commissioner Brune answered it was a goal. He discussed the
goal of a more efficient process and dealing with only one
entity. He referenced the 401 certifications he had
mentioned earlier and explained that when the Army Corps of
Engineers did its 404 permit it had to go to DEC to do a
401 certification. He explained that the 401 certification
would no longer be necessary [if the state assumed primacy
of the program]. Additionally, the state had the
opportunity to improve the environment with the program. He
stressed that the compensatory mitigation program and
flexibility the state would have over the program would
have huge environmental benefits. For example, the Lower 48
had developed over half its wetlands. He highlighted the
need for wetlands due to the ecological benefits they
provided. He stated that destroying them was not always a
good thing. He used the term compensatory mitigation (no
net loss) and explained the idea that if one acre of
wetlands were developed that between one and 15 acres of
new wetlands should be created. He stated that Alaska had
so many wetlands that it was not necessarily the best
alternative. Another option provided by the corps was
putting lands in perpetual conservation easements. He
remarked that there were 150 million acres of lands in the
state in perpetual conservation easements. He stated that
was not needed either. He suggested that development
projects (e.g., roads, fish processing plants, oil
facilities, mines) clean up a contaminated site, put in new
fish passages, or eliminate honey buckets in a community.
He stated they were environmental benefits the state would
recognize instead of money being thrown into a mitigation
bank where its benefits were unknown. He concluded there
were many opportunities from a permitting and streamlining
perspective, but also from an environmental perspective.
Representative Galvin noted that DEC was eventually looking
at federal, state, and fees to pay for the assumption of
primacy. She observed the department was initially
requesting 28 positions, which would increase to around 40.
She stated the Army Corps of Engineers currently had 48
staff overseeing the program. She did not want to have
lawsuits down the road claiming the state was not providing
enough coverage. She asked if DEC believed the 40 positions
would be sufficient to get the work done.
Commissioner Brune stated that the corps currently had 48
positions, but some of the positions would be eliminated
and he did not know how many the federal government would
keep. Through the feasibility study, DEC looked at length
into the number of activities done on an annual basis. He
reported that the Jade North study had specified that 32
positions would be sufficient to maintain the program at
the current level of economic activity. He stated if there
was a boom with new mines, fish processing plants, and
housing developments, it would be a great problem to have
because additional economic activity would lead to more
royalties and taxes to the state. He saw it as a win-win.
2:50:25 PM
Representative Josephson considered the commissioner's
suggested change of remedies from no net loss to cleaning
up something instead. He wondered if the Clean Water Act
would let the state change mitigation remedies if it
assumed 404 primacy.
Commissioner Brune answered that he wondered the same
thing. He stated that the Army Corps of Engineers currently
had the flexibility through a 2018 memo, but it was rarely
implemented. He highlighted the CD5 oil development as an
example and detailed that ConocoPhillips had written a
check for $7 million into a mitigation bank and no one had
any idea where the money went and whether it helped
anything in Alaska. He cited the Donlin [gold] project that
wanted to clean up the historic Red Devil Mine, but the
company had not been allowed to do so. He had worked at
CIRI at the time and had negotiated a deal for a
conservation easement on land that was never going to be
developed. He stated there was no added environmental
benefit. He reported that the flexibility existed for the
corps, but it did not implement it. He underscored that if
the state had primacy, it would be a priority to clean up
contaminated sites on ANCSA land, eliminate honey buckets,
install new fish passages, and things that positively
benefited the watersheds where activity was occurring. He
stated it would be an improvement for the areas.
Co-Chair Johnson thanked the department for the
presentation.
2:52:57 PM
Representative Cronk looked at slide 8 showing the
department's overall budget. He asked for the difference
between "IIJA other" and "IIJA fed" fund sources.
Ms. Kohler answered that IIJA other included capital
improvement projects receipts and clean and drinking water
admin funding. She explained that IIJA fed was the
department's ability to accept federal dollars.
Representative Cronk asked if the state would be on the
hook for covering items in the future once federal IIJA
funds ended. He wondered if the budget would return to a
normal level once the IIJA funding had been used.
Commissioner Brune answered that he insisted on having IIJA
funding separated on the budget graph. He did not want to
see growth of government for DEC going forward. He relayed
that Governor Dunleavy had advised the commissioner to
always be careful about the allure of free money because
there would always be ongoing operating expenses once the
free money stopped. He agreed, but a lot of the funding
would go towards replacing honey buckets and bringing clean
water to 32 communities without safe drinking water during
a pandemic. He reiterated he had insisted breaking out the
IIJA funds in the department's budget in order to avoid the
continued growth of DEC staff after the federal funds had
been used.
HB 39 was HEARD and HELD in committee for further
consideration.
HB 41 was HEARD and HELD in committee for further
consideration.
Co-Chair Johnson reviewed the schedule for the following
day.
ADJOURNMENT
2:56:00 PM
The meeting was adjourned at 2:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DCCED- HFIN FY2024 DEC Department Overview Updated02.22.2023.pdf |
HFIN 2/22/2023 1:30:00 PM |
HB 39 |