Legislature(1995 - 1996)

01/25/1995 08:04 AM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                        January 25, 1995                                       
                           8:04 a.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative Bill Williams, Co-Chairman                                     
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative Ramona Barnes                                                  
 Representative Pete Kott                                                      
 Representative John Davies                                                    
 Representative Eileen MacLean                                                 
 Representative Irene Nicholia                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Overview by the Department of Environmental Conservation (DEC)                
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 GENE BURDEN, Commissioner Designate                                           
 Department of Environmental Conservation                                      
 4l0 Willoughby, Ste. 105                                                      
 Juneau, Alaska   99801                                                        
 Phone:  465-5050                                                              
 POSITION STATEMENT:  Provided an overview of DEC and answered                 
  questions                                                                
                                                                               
 LEN VERRELLI, Acting Deputy Commissioner                                      
 Department of Environmental Conservation                                      
 410 Willoughby, Ste. 105                                                      
 Juneau, Alaska   99801                                                        
 Phone:  465-5100                                                              
 POSITION STATEMENT:  Provided an overview of DEC and answered                 
  questions                                                                
                                                                               
 MIKE BURNS, Section Chief                                                     
 Facilities Construction and Operation Division                                
 Department of Environmental Conservation                                      
 410 Willoughby, Ste. 105                                                      
 Juneau, Alaska   99801                                                        
 Phone:  465-5136                                                              
 POSITION STATEMENT:  Provided information and answered questions              
                                                                               
 DAN KANOUSE, Director                                                         
 Division of Information & Administrative Services                             
 Department of Environmental Conservation                                      
 410 Willoughby, Ste. 105                                                      
 Juneau, Alaska   99801                                                        
 Phone:  465-5024                                                              
 POSITION STATEMENT:  Provided information and answered questions              
                                                                               
 JOHN BARNETT, Executive Director                                              
 Board of Storage Tank Assistance                                              
 Department of Environmental Conservation                                      
 410 Willoughby, Ste. 105                                                      
 Juneau, Alaska   99801                                                        
 Phone:  465-5219                                                              
 POSITION STATEMENT:  Provided information and answered questions              
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-2, SIDE A                                                             
 Number 000                                                                    
                                                                               
 The House Resources Committee was called to order by Co-Chairman              
 Joe Green at 8:04 a.m.  No other committee members were present at            
 the call to order.                                                            
                                                                               
 CO-CHAIRMAN JOE GREEN announced the committee would hear an                   
 overview of the Department of Environmental Conservation.                     
                                                                               
 GENE BURDEN, COMMISSIONER DESIGNATE, DEC, stated he would review              
 the direction and approach the department will pursue in managing             
 the programs.  He said program performance objectives will be                 
 implemented, which is a process of establishing clear mission                 
 objectives for each of the functions and attempting to make those             
 objectives as measurable and performance related as possible.  In             
 that process the department hopes to be able to share those                   
 objectives with interested parties to ensure that the mission and             
 specific objectives are better understood.                                    
                                                                               
 MR. BURDEN stated DEC has initiated an employee attitude survey               
 which was conducted several weeks ago.  Early indications from that           
 survey indicate employees want to see a clear chain of command and            
 embrace the idea of specific and measurable objectives.  He said              
 DEC plans to instill customer service considerations into the                 
 delivery of services the department provides.  He felt that was               
 particularly important in view of several new regulatory                      
 obligations DEC has.                                                          
                                                                               
 MR. BURDEN advised DEC will also be examining how the agency                  
 interacts with the public and the regulated community in all                  
 program areas.  He noted that DEC's components are involved in                
 enforcing a very technical set of laws and regulations representing           
 a challenge to clearly communicate what is required.  He added that           
 DEC will do its best to translate very technical issues into                  
 understandable issues.                                                        
                                                                               
 Number 044                                                                    
                                                                               
 MR. BURDEN advised DEC has an organizational structure issue                  
 involving the relationship of the program-based versus the                    
 regional-based.  He stated the department hopes to eliminate the              
 versus in that issue.  There are four regions presently involved in           
 the day-to-day enforcement and program implementation activities.             
 He said there is a desire to work those two groups closer together.           
 He stressed DEC's objective is to bring a budget to the legislature           
 and respond to questions on a programmatic basis.                             
                                                                               
 MR. BURDEN stressed the time period was very brief to establish the           
 initial organization and make decisions related to staffing, which            
 are important to the success of the program.  He explained the                
 initial organization is an interim organization subject to further            
 tweaks.  He said there will be an attempt to fill positions with              
 the best qualified people possible and make those appointments on             
 the basis of vacant existing positions.                                       
                                                                               
 Number 067                                                                    
                                                                               
 MR. BURDEN noted there will be an attempt to promote from within              
 DEC on appointments when possible.  He said the technical aspect of           
 the programs generate a narrow group that can step in and get the             
 technical programs going immediately.  He stated there are benefits           
 in implementing these programs from within by recognizing staff               
 professionals who have worked within the programs and are in                  
 support of the direction being taken.                                         
                                                                               
 MR. BURDEN told committee members there are several program issues            
 needing to be addressed.  He said the public health component                 
 covers food inspections, animal industry inspections, and a variety           
 of public health areas.  This component is an increasingly                    
 challenging section of the department because there are more                  
 expectations of paying your own way.  He stressed DEC will give               
 this component more prioritization and attention as this section              
 works in conjunction with the state's efforts to promote and                  
 improve the seafood industry within the state and other basic food            
 related industries.                                                           
                                                                               
 MR. BURDEN stated the department is looking at a centralized                  
 permitting operation within the Air Quality Management section.  He           
 said DEC has obligations during 1995 to implement Title 5 - the               
 Clean Air Act.  He noted the Clean Air Act is a federal law and               
 will require permitting from the current approximately 200 air                
 permitees to approximately 600 in the fall of 1995.  Many of the              
 new permitees are small businesses making it important that DEC               
 communicate and work with the businesses to get them in compliance            
 with the law.                                                                 
                                                                               
 MR. BURDEN said DEC expects to employ seasonal task force efforts             
 to assist in getting areas cleaned up which can only be addressed             
 during a short season.  He noted the department is also looking at            
 efforts to improve the time it takes to have a permit or                      
 contingency plan reviewed and accepted or rejected.                           
                                                                               
 Number 115                                                                    
                                                                               
 MR. BURDEN stated there is great interest in pollution prevention             
 efforts and he felt every program has specific obligations to be              
 actively engaged in pollution prevention work.  He said the                   
 department plans to review that area and make it become an adopted            
 objective of every program function.  Mr. Burden distributed a hand           
 out (may be found in the House Resources Committee Room, Capitol              
 Alaska State Legislature, in the Legislative Reference Library)               
 which outlined the scope of services within the various existing              
 divisions as well as the operating budget.                                    
                                                                               
 CO-CHAIRMAN GREEN noted for the record that Representatives                   
 WILLIAMS, OGAN, DAVIES, KOTT, BARNES and AUSTERMAN had joined the             
 committee.                                                                    
                                                                               
 REPRESENTATIVE RAMONA BARNES observed that Mr. Burden had referred            
 to the Clean Air Act as a federal act.  She recalled the state                
 passed a law and now has new regulations to implement the law.                
                                                                               
 MR. BURDEN answered that was correct.  He added that law was a                
 direct reaction to the Clean Air Act amendments.                              
                                                                               
 REPRESENTATIVE BARNES clarified the state's act does replace that.            
                                                                               
 MR. BURDEN said that was correct.                                             
                                                                               
 Number 154                                                                    
                                                                               
 CO-CHAIRMAN GREEN recalled Mr. Burden had indicated there was a               
 reorganization underway and there would be an increase in the                 
 department's responsibilities.  He asked if DEC will be able to               
 handle the increased load without an increase in staff.                       
                                                                               
 MR. BURDEN stated at this time he would not be able to give a                 
 knowledgeable answer.  He said as the department goes through the             
 reorganization process and he becomes more acquainted with the                
 existing work units, he will then be able to answer the question.             
 He added that on the air program side, the department will be able            
 to meet the requirements of the Clean Air Act without additional              
 staff.                                                                        
                                                                               
 LEN VERRELLI, ACTING DEPUTY COMMISSIONER, DEC, stated if the other            
 programs come in like the air program did, the department will                
 realize a savings on permanent full-time staff.                               
                                                                               
 REPRESENTATIVE JOHN DAVIES clarified that air regulations have been           
 adopted but still require the Environmental Protection Agency's               
 (EPA) approval.  If that is correct, he wondered if DEC had a time            
 frame established.                                                            
                                                                               
 Number 182                                                                    
                                                                               
 MR. VERRELLI stated EPA has agreed to parallel processing of the              
 regulations and DEC hopes EPA will have them completed by the end             
 of June.  It is important that DEC begin accepting permit                     
 applications and processing them July 1, 1995.                                
                                                                               
 REPRESENTATIVE BARNES noted Governor Knowles stated publicly he               
 will not be asking for increases in the budget but in the previous            
 Governor's budget which was presented, there was an increase.  She            
 wondered if DEC plans to maintain what Governor Knowles has stated            
 publicly, so the fiscal year (FY) 1996 request of Governor Hickel             
 will be at the FY 1995 level.                                                 
                                                                               
 MR. BURDEN responded that DEC's general fund budget represents a              
 slight reduction in 1996 versus 1995.  The department is reflecting           
 an increase in federal funds coming into the program and is also              
 showing an expected reduction in the response fund.                           
                                                                               
 MR. VERRELLI stressed the goal is to stay within the                          
 administration's target.  However, things do happen.  For example,            
 the air program sustained a $1.4 million cut in program receipts              
 because DEC did not have the ability to collect those program                 
 receipts.                                                                     
                                                                               
 REPRESENTATIVE BARNES reflected that program receipts are state               
 treasury dollars and she does not look upon them as something                 
 belonging to the department.                                                  
                                                                               
 CO-CHAIRMAN GREEN noted for the record that Representative NICHOLIA           
 had joined the committee.                                                     
                                                                               
 Number 225                                                                    
                                                                               
 MR. VERRELLI, referring to the hand out, said on page 2 there is an           
 overview of the department and the major tasks within each                    
 division.  He stated the seafood inspection section is one of the             
 primary goals of environmental health and is viewed as one of the             
 driving forces in allowing Alaska's seafood to be processed.  He              
 said a recent example is the problem with dungeness crabs.  The               
 department was able to interact with that fishery to determine a              
 way to eviscerate the crab and still market it.                               
                                                                               
 MR. VERRELLI stated the pesticide program is a very small program             
 with a $260,000 budget and is basically a federally funded program.           
 Initially, the department did not feel there was a problem with               
 pesticides in the state.  However, with increased farming                     
 activities in the Delta, Kenai, etc. many pesticides are starting             
 to be used in the state and are finding their way into the                    
 waterways.  He said the pesticide program, therefore, is becoming             
 more important.                                                               
                                                                               
 MR. VERRELLI informed members that DEC has laboratory monitoring              
 facilities in Palmer and Juneau which handle all the health related           
 issues.  In regard to the meat/poultry/animal health and dairy                
 program, he said one of the failures in the state was that it has             
 not come up to speed with the Midwest in farming products.                    
                                                                               
 MR. VERRELLI stated the Environmental Quality Division includes the           
 public drinking water section.  He said a goal of all                         
 administrations, particularly the current one, is to bring safe               
 drinking water to the table.  He noted there is a lot of                      
 controversy regarding drinking water regulations.  A few years ago,           
 the department only had 67 anolytes to look at and now there are              
 over 127 anolytes to review.  He noted this issue is being                    
 discussed at the National Governors Conference and in Congress                
 because there are additional costs involved.                                  
                                                                               
 CO-CHAIRMAN GREEN questioned if there is a way to review anolytes             
 regionally rather than statewide.                                             
                                                                               
 MR. VERRELLI stated the initiatives were started during the last              
 administration and arrangements were being made with the states of            
 Oregon and Washington which would eliminate the need for Alaska to            
 have the entire array of instruments to test all the anolytes.  He            
 said the only problem is that travel might be required.  The                  
 program has not started yet however, so the pros and cons need to             
 be determined.                                                                
                                                                               
 CO-CHAIRMAN GREEN noted for the record that Representative MACLEAN            
 had joined the committee.                                                     
                                                                               
 Number 288                                                                    
                                                                               
 REPRESENTATIVE DAVIES wondered if after the first round of testing            
 no anolytes are found, whether or not that anolyte can be removed             
 from the list.                                                                
                                                                               
 MR. VERRELLI confirmed that is the ultimate goal.  Currently the              
 anolytes have to be looked at all the time and the cost is                    
 prohibitive.  He felt there is so much outcry, however, that                  
 eventually there would be a more rational approach.                           
                                                                               
 CO-CHAIRMAN GREEN noted there are several cooperative attempts to             
 reduce the number of federal mandates.  He asked if there are other           
 states involved in the attempt to reduce this mandate.                        
                                                                               
 MR. VERRELLI said the National Governors Association is organizing            
 an effort.                                                                    
                                                                               
 MR. VERRELLI stated the air quality management program is ongoing             
 and the goal is to implement the Clean Air Act program under                  
 budget.  He felt the staff has done an excellent job of                       
 consolidating what is required to be done in the Act and a good               
 service will be provided for the dollar.                                      
                                                                               
 REPRESENTATIVE EILEEN MACLEAN asked what DEC is doing in regard to            
 public drinking water, particularly the problem with hepatitis in             
 rural Alaska.                                                                 
                                                                               
 MR. VERRELLI said many of the areas in the state which have                   
 specific problems are being addressed directly.                               
                                                                               
 REPRESENTATIVE MACLEAN asked what the program is called.                      
                                                                               
 MR. VERRELLI said it is called the Village Safe Water Program.                
                                                                               
 REPRESENTATIVE MACLEAN asked if those problem areas are on the                
 priority list for DEC in the capital bill.                                    
                                                                               
 MIKE BURNS, SECTION CHIEF, FACILITIES CONSTRUCTION AND OPERATION              
 DIVISION, DEC, answered that the projects have been prioritized.              
                                                                               
 CO-CHAIRMAN GREEN noted there had been a significant effort made by           
 the prior administration to review water quality.  He wondered if             
 the current review is in addition to or a redesign of that review.            
                                                                               
 MR. VERRELLI answered it is a continuation.                                   
                                                                               
 Number 355                                                                    
                                                                               
 MR. VERRELLI continued that the water quality management program              
 addresses water quality standards which have been quite                       
 controversial.  He said DEC is in the process of bringing the issue           
 before the public again due to the challenge brought forth by the             
 Sierra Legal Defense Fund.  He stressed the solid waste management            
 problem remains and will become a major issue with the state.  He             
 noted the commissioner has ideas on how to best approach the                  
 problem and hopefully will help mitigate some of the situations               
 existing all over the state.                                                  
                                                                               
 MR. VERRELLI explained the hazardous waste management program has             
 been attempting to receive authorization over the years, but due to           
 budget cuts, the program is only at a maintenance level.  In regard           
 to the industrial and domestic wastewater control programs, he                
 determined that the new proposed regulation on mining wastewater              
 was a result of the A-J Mine and the fish kill last spring.                   
                                                                               
 REPRESENTATIVE MACLEAN asked for an update on the A-J Mine                    
 situation in regard to the dead fish.                                         
                                                                               
 MR. BURDEN stated in regard to the most recent fish kill, DEC had             
 people on the scene taking samples and fish.  It was determined               
 there was no water in the area where the fish were discovered.                
 Speculation is that due to the city taking its water, there had               
 been a draw down and the fish had been left dry.  He stressed there           
 is no indication of any relationship between the fish kill and the            
 mine.                                                                         
                                                                               
 Number 425                                                                    
                                                                               
 MR. VERRELLI told committee members the pollution prevention office           
 is a separate group within the department.  The commissioner's plan           
 includes blending the office in with all the programs.  He said               
 most of the programs have incorporated pollution prevention                   
 efforts.  He stated the environmental analysis laboratory has been            
 controversial due to the expense of the building and equipment                
 maintenance.                                                                  
                                                                               
 REPRESENTATIVE DAVIES asked if the laboratory being referred to is            
 the one which is envisioned to be operated in conjunction with the            
 university.                                                                   
                                                                               
 MR. VERRELLI replied it was.                                                  
                                                                               
 MR. BURDEN stressed the facility is under-utilized in its present             
 arrangement and is an expensive activity to maintain.  Therefore,             
 partnerships will be looked at to attempt to get better utilization           
 of the laboratory and save money in the process.                              
                                                                               
 MR. VERRELLI continued that the Facilities Construction and                   
 Operation Division works on sewer and water projects around the               
 state.  He noted additional grants requiring matching funds are               
 being sought for that program.  He stated there is $14.9 million in           
 federal funds for the state available with the appropriate match.             
                                                                               
 MR. VERRELLI explained the Spill Prevention and Response Division             
 was a result of the Exxon Valdez oil spill.                                   
                                                                               
 REPRESENTATIVE MACLEAN asked if DEC plans to deregulate any of the            
 Alaska Clean Water regulations because they over exceed the federal           
 standards.                                                                    
                                                                               
 MR. BURNS replied statute changes occurred last spring which                  
 brought the state in line with the federal standards.                         
                                                                               
                                                                               
 Number 515                                                                    
                                                                               
 MR. VERRELLI stated everyone struggled with SB 215 resulting in               
 what is contained in the chart being handed out (may be found in              
 the House Resources Committee Room, Capitol #124, and after                   
 adjournment of the second session of the 19th Alaska State                    
 Legislature, in the Legislative Reference Library).                           
                                                                               
 DAN KANOUSE, ACTING DIRECTOR, DIVISION OF INFORMATION AND                     
 ADMINISTRATIVE SERVICES, stated he would outline the Oil &                    
 Hazardous Substance Release Prevention and Response Fund for the              
 committee, which is also called the Response Fund.  He said last              
 year, after much deliberation, the legislature passed SB 215 in the           
 form designated in the handout.  He noted the law took effect                 
 October 2, 1994.                                                              
                                                                               
 MR. KANOUSE said originally a five cents per barrel surcharge was             
 collected and put into the General Fund for appropriation to the              
 Response Fund.  The intent was to ultimately reach a $50 million              
 cap.  He noted, however, because of the language in the former law,           
 there was difficulty in reaching the $50 million cap.  He explained           
 that SB 215 provided a change providing for a split of the nickel,            
 with two cents being dedicated to reach the $50 million cap.  Once            
 the cap is reached, the two cents collection will be suspended.  He           
 stated it is anticipated the $50 million cap will be reached at the           
 end of March 1995.                                                            
                                                                               
 REPRESENTATIVE BARNES said the 470 Fund has been in effect for a              
 number of years and it has been a short time since the fund began             
 the division of the surcharge.  She felt the fact the $50 million             
 cap will be reached in March says something about what was                    
 happening to the nickel a barrel previously.                                  
                                                                               
 Number 573                                                                    
                                                                               
 MR. KANOUSE stated the two cents is for emergency spill response              
 and the three cents is for ongoing spill prevention type                      
 activities.  He explained the three cents covers a spectrum of the            
 spill prevention response division activities, as well as other               
 agencies participating in spill response type of activities.                  
                                                                               
 REPRESENTATIVE MACLEAN asked the total amount expected to be                  
 collected in the prevention mitigation account for one year.                  
                                                                               
 MR. BURDEN replied the projected flow cannot be predicted at this             
 point.                                                                        
                                                                               
 REPRESENTATIVE MACLEAN questioned what the total amount collected             
 to date is.  She felt there are many problems the department has to           
 deal with and she is concerned about the storage tank assistance              
 fund.                                                                         
                                                                               
 CO-CHAIRMAN GREEN thought the amount would total approximately                
 $13-15 million.                                                               
                                                                               
 MR. BURDEN commented that prevention efforts are the biggest and              
 most important aspect of the program DEC has.  He said if the                 
 interest in expanding the development of the oil and gas industry             
 is reviewed, the avoidance and preparedness for an accident is the            
 department's best defense in not having the problems and delays in            
 development which occurred following the Exxon Valdez spill.                  
                                                                               
 CO-CHAIRMAN GREEN added that the committee, as well as the                    
 legislature, feels prevention is better than trying to clean up and           
 there is no question that it is a justifiable use of the money.  He           
 noted criticisms are due to misappropriations from the fund.                  
                                                                               
 REPRESENTATIVE BARNES clarified the commissioner could not project            
 the amount the three cents surcharge would bring in.  She wondered            
 if the commissioner is aware of how many barrels of oil go down the           
 pipeline daily.                                                               
                                                                               
 MR. BURDEN replied approximately 1.5 million barrels a day.                   
                                                                               
 REPRESENTATIVE BARNES stated if 1.5 million barrels a day go down             
 the pipeline a day and there is a three cents surcharge collected             
 on each barrel, it should not be too difficult to calculate the               
 total amount to be collected in a year.                                       
                                                                               
 Number 705                                                                    
                                                                               
 CO-CHAIRMAN GREEN stated there have been changes in the fees DEC              
 charges, many of which have received negative reactions.  He                  
 wondered if there had been a projection on the user fees required             
 to cover DEC's operating costs.                                               
                                                                               
 MR. VERRELLI replied a savings will be appreciated in the reduced             
 overall budget.  He said the air program, based on program receipts           
 and federal dollars coming into the state, should not have any                
 drawdown except for the matching part of the grant.  With other               
 programs, there is some resistance to paying for a service.                   
                                                                               
 TAPE 95-2, SIDE B                                                             
 Number 000                                                                    
                                                                               
 MR. VERRELLI said many are used to getting services for free.                 
 Therefore, there is a large resistance to pay a fee.  He stressed             
 as funds available for these services decline, the only alternative           
 other than stopping the service is collecting fees.                           
                                                                               
 CO-CHAIRMAN GREEN wondered if user fees will increase the need for            
 staffing or a shifting of responsibilities.                                   
                                                                               
 MR. VERRELLI responded that a core group will be developed to                 
 handle the fees but added that with a consolidation of efforts, a             
 savings will be realized.                                                     
                                                                               
 MR. BURDEN added that as the department sees expanded funds coming            
 in from other program receipts, it is possible a centralized                  
 accounts receivable and billing function will be developed to                 
 service all of the programs.  Therefore, duplicated efforts will be           
 avoided.                                                                      
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN recalled an earlier discussion on the           
 Clean Water Act.  DEC took the regulations mandated by the federal            
 government and expanded on them.  Now the department has gone back            
 and is now on a level basis with the federal government.  He hoped            
 that was an indication that DEC will continue to evaluate the                 
 programs and determine how far the regulations have gone from the             
 original intent.  He asked Mr. Burden what his top priorities are             
 as commissioner of DEC.                                                       
                                                                               
 Number 049                                                                    
                                                                               
 MR. BURDEN replied he has four top priorities but cannot rate them.           
 He noted the administration has established a high priority of                
 moving further along with the elimination of the honey bucket scene           
 in rural Alaska.  He stressed that is a program the department will           
 vigorously support and attempt to expand.  He said another high               
 priority is to improve the consistency and predictability of the              
 services provided by DEC.  He felt it was important to avoid                  
 situations where the regulated community is confronted with new               
 regulations and requirements, without having those communicated               
 adequately.                                                                   
                                                                               
 MR. BURDEN stated another priority is to have clearly defined                 
 program objectives which the department can interact on with the              
 community and the legislature, enabling everyone to understand the            
 direction a certain program is going.                                         
                                                                               
 REPRESENTATIVE DAVIES wondered if the storage tank assistance                 
 program is an area of concern with the department and asked if the            
 fund provided for the program is adequate.  He said his question              
 also relates to the bulk fuel issue in rural Alaska and the                   
 contaminated sites remediation issue.                                         
                                                                               
 Number 097                                                                    
                                                                               
 MR. BURDEN responded the bulk fuel storage issues facing Alaska are           
 enormous.  The costs associated with addressing those problems                
 could be in the hundreds of millions of dollars.  Although he did             
 not have specifics, he said in dealing with those issues, the                 
 department must first focus on how to best protect the public's               
 health in areas that have deteriorated or deteriorating storage               
 facilities.  Hopefully, the department will be able to determine              
 measures to prevent and mitigate further degradation of the water             
 supply in those communities.  He stated in terms of contaminated              
 site remediation, he does not have a full appreciation of the scope           
 of that issue at this time.                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN noted there is a lot of talk around the              
 capitol in regard to privatization.  He asked if the department is            
 looking at areas within the department which may be privatized.               
                                                                               
 MR. BURDEN replied at this time he has not looked at anything                 
 related to privatization.  He felt privatization is an option which           
 has to be looked at in terms of the alternatives available when               
 trying to more efficiently do the job.                                        
                                                                               
 MR. VERRELLI stated in regard to the air program and the small                
 business assistance program, there will be consulting firms                   
 performing much of the work.  He said there are other areas, such             
 as inspections, where private people may be less expensive than               
 state employees.  He added one of the reasons the laboratory is in            
 such poor financial shape is because of privatization.  All of the            
 labs in the state doing drinking water samplings are taking                   
 business away from the state.                                                 
                                                                               
 REPRESENTATIVE AUSTERMAN said he was confused as to why the                   
 laboratory was built originally.                                              
                                                                               
 MR. VERRELLI responded the lab was built because the state is                 
 required to have a laboratory fully capable of doing samples.  He             
 added that EPA has a mirror image behind the state.  If the state             
 fails, EPA is required to have a laboratory.  He advised if the               
 state turns the program over to the federal government, it would be           
 more stringent and additional costs would be involved.  He said the           
 state is allowed to operate below the national standards which is             
 a benefit.  For that reason, privatization usually makes sense.               
                                                                               
 Number 179                                                                    
                                                                               
 CO-CHAIRMAN GREEN wondered if the department might be able to                 
 return to the committee in two to three months and review some of             
 these issues.                                                                 
                                                                               
 MR. BURDEN stated they could definitely talk to the committee with            
 a lot more authority at that time.                                            
                                                                               
 REPRESENTATIVE SCOTT OGAN said he was aware of several cases of               
 hostility by DEC towards certain businesses, including                        
 inappropriate comments and actions and withholding food permits               
 without a normal hearing process.  He noted DEC has a lot of                  
 authority to shut down a business, which prevents a business from             
 recovering.  He wondered if DEC is willing to look into the                   
 problem.  He felt the situation is self-defeating when the state is           
 trying to diversify its economy and an agency with a lot of                   
 authority is putting people out of business, instead of working               
 with them to try and resolve the problem.                                     
                                                                               
 MR. BURDEN stressed the department needs to be aware of any                   
 regulated entity which has been treated unfairly.  He noted if an             
 inspector encounters a situation which poses an eminent threat to             
 the public health and safety, presently there is that authority to            
 stop the operation until the problem is corrected.  He said the               
 manner in which that is done and communicated is important.                   
                                                                               
 REPRESENTATIVE OGAN said the specific case he was referring to                
 involved a business who hired an attorney.  The attorney was                  
 attempting to show DEC the regulation and the fact that the                   
 inspector was not following the regulation.                                   
                                                                               
 MR. BURDEN told Representative Ogan to contact him or someone in              
 the department and provide a brief description of the incident so             
 it could be reviewed.                                                         
                                                                               
 Number 228                                                                    
                                                                               
 REPRESENTATIVE DAVIES stated a laboratory is required because the             
 state has the responsibility to certify the private sector labs.              
 As a consequence, the state laboratory has to maintain the                    
 instrumentation in order to accomplish that certification.  He                
 wondered if Alaska could use Washington State's labs to satisfy the           
 certification requirement, therefore eliminating the need to                  
 maintain such an expensive array of instruments.                              
                                                                               
 REPRESENTATIVE DAVIES agreed that privatization often results in              
 cost savings but not always.  He stated in the case of the septic             
 tank certification program, it appears the state is getting double-           
 dipped.  The private sector is getting their nickel and the state             
 is still charging an unreasonable amount for that stamp of approval           
 of the private sector inspection.                                             
                                                                               
 MR. BURDEN responded he is familiar with the situation.  He added             
 that the department feels there are ways to address the situation             
 and eliminate the duplication.                                                
                                                                               
 REPRESENTATIVE MACLEAN questioned if the state laboratory is still            
 being used.  She recalled last winter the lab froze up.                       
                                                                               
 MR. BURDEN replied the laboratory is in operation and is very busy.           
                                                                               
 REPRESENTATIVE MACLEAN agreed that the laboratory should be                   
 privatized and felt privatization would save the state dollars,               
 especially in light of the benefits involved.                                 
                                                                               
 Number 272                                                                    
                                                                               
 CO-CHAIRMAN GREEN recalled the legislature had a painful two years            
 in connection with the 470 fund.  He wondered in light of the costs           
 involved with a contingency plan, if DEC might be looking at                  
 helping small entities who may contribute to a potential for a                
 spill, to either make the costs less or proportionate to a                    
 potential spill.  He stated the oil industry has a burden on them             
 through the 470 fund but there are other industries who may be                
 involved in a fineable offense such as cruise ships, harbors, etc.            
 He questioned whether other potential discharges might be charged             
 some sort of user fee or be required to file a contingency plan.              
                                                                               
 MR. BURDEN said he would add it to the growing list.                          
                                                                               
 CO-CHAIRMAN GREEN observed this legislature is incensed with                  
 requirements and mandates from the federal government and noted               
 many of DEC's requirements are an outgrowth of federal acts.  He              
 wondered if there are other issues which may not have justification           
 or applicability for Alaska.  If there are, he requested that DEC             
 bring those issues to the attention of the legislature.                       
                                                                               
 REPRESENTATIVE AUSTERMAN suggested privatization may be the answer            
 in regard to the bulk fuel tanks issue in the rural areas.  He said           
 there is technology now available to add fuel tanks which are safe            
 and to regionally monitor those tanks.                                        
                                                                               
 REPRESENTATIVE OGAN encouraged DEC to develop a program to help               
 small businesses follow the law.                                              
                                                                               
 MR. BURDEN responded there is a small business assistance program             
 on the air side.  He added one of the objectives in having                    
 centralized permitting activities is to enable the department to              
 provide assistance to a broader range of permit applicants.                   
                                                                               
 REPRESENTATIVE IRENE NICHOLIA wondered which division in DEC the              
 small business assistance program will fall under.                            
                                                                               
 MR. BURDEN stated it will be under the Environmental Quality                  
 Division.                                                                     
                                                                               
 Number 382                                                                    
                                                                               
 MR. VERRELLI introduced the staff present.                                    
                                                                               
 MR. BURNS told committee members the Facilities Construction and              
 Operation Division has three sections:  Village Safe Water Program;           
 Municipal Grant and Loan Section; and Operations Section.                     
                                                                               
 JOHN BARNETT, EXECUTIVE DIRECTOR, BOARD OF STORAGE TANK ASSISTANCE,           
 DEC, said he works with DEC in the Spill Prevention and Response              
 Division to address underground storage tank problems throughout              
 the state and the rural bulk fuel program.                                    
                                                                               
 CO-CHAIRMAN GREEN thanked the DEC staff for their presentation.               
                                                                               
 CO-CHAIRMAN GREEN informed committee members that meeting packets             
 will be available in Room 126 at 3:00 p.m. on the day prior to each           
 committee meeting.                                                            
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House Resources            
 Committee, Co-Chairman Green adjourned the meeting at 9:20  a.m.              
                                                                               

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