Legislature(1993 - 1994)

01/20/1993 08:00 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               HOUSE RESOURCES STANDING COMMITTEE                              
                        January 20, 1993                                       
                            8:00 a.m.                                          
  MEMBERS PRESENT                                                              
  Representative Bill Williams, Chairman                                       
  Representative Bill Hudson, Vice-Chairman                                    
  Representative Con Bunde                                                     
  Representative Pat Carney                                                    
  Representative John Davies                                                   
  Representative Joe Green                                                     
  Representative Jeannette James                                               
  Representative Eldon Mulder                                                  
  MEMBERS ABSENT                                                               
  Representative David Finkelstein                                             
  OTHER HOUSE MEMBERS PRESENT                                                  
  Representative Gene Therriault                                               
  Representative Irene Nicholia                                                
  COMMITTEE CALENDAR                                                           
  Overview Hearing for the Department of Environmental                         
  WITNESS REGISTER                                                             
  Janice Adair, Assistant Commissioner                                         
    and Legislative Liaison                                                    
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5010                                                               
  POSITION STATEMENT: Provided information pertaining to the                   
  Mead Treadwell, Deputy Commissioner                                          
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5050                                                               
  POSITION STATEMENT: Provided information pertaining to the                   
  Keith Kelton, Director                                                       
  Division of Facility Construction and Operation                              
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5180                                                               
  POSITION STATEMENT: Provided information pertaining to the                   
  Kit Ballentine, Acting Director                                              
  Division of Environmental Health                                             
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5280                                                               
  POSITION STATEMENT: Provided information pertaining to the                   
  Keith Kelton, Director                                                       
  Division of Facility Construction and Operation                              
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5180                                                               
  POSITION STATEMENT: Discussed the Sanitation Task Force                      
  Kurt Fredriksson, Deputy Director                                            
  Division of Spill Prevention and Response                                    
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5250                                                               
  POSITION STATEMENT: Discussed the Division's programs                        
  Mike Menge, Director                                                         
  Division of Environmental Quality                                            
  Department of Environmental Conservation                                     
  410 Willoughby Avenue, Suite 105                                             
  Juneau, AK  99801-1795                                                       
  (907) 465-5260                                                               
  POSITION STATEMENT: Provided information pertaining to the                   
  Traci Cramer, Budget Analyst for the                                         
    Department of Environmental Conservation                                   
  Office of the Governor                                                       
  Office of Management and Budget                                              
  P.O. Box 110020                                                              
  Juneau, AK  99811-0020                                                       
  (907) 465-3568                                                               
  POSITION STATEMENT: Answered questions related to the DEC's                  
                      operating budget                                         
  ACTION NARRATIVE                                                             
  TAPE 93-4, SIDE A                                                            
  Number 000                                                                   
  The House Resources Committee was called to order by                         
  Chairman Bill Williams at 8:05 a.m.  Members present at the                  
  call to order were Representatives Williams, Hudson, Bunde,                  
  Carney, Davies, Green, James, and Mulder.  Member absent was                 
  Representative Finkelstein.                                                  
  CHAIRMAN BILL WILLIAMS announced an overview by the                          
  Department of Environmental Conservation (DEC) would be the                  
  topic for the meeting and that a folder had been provided by                 
  the DEC for the members.  He said the DEC had been asked to                  
  present a basic overview, including the structure of the                     
  DEC, functions and duties of the various Divisions,                          
  legislative priorities, and a brief description of key                       
  issues that the DEC was involved in currently.  He asked                     
  specific issues be discussed in later meetings.                              
  CHAIRMAN WILLIAMS noted for the record that Representatives                  
  Bunde, Nicholia and Therriault joined the committee at 8:10                  
  CHAIRMAN WILLIAMS introduced Janice Adair, Assistant                         
  Commissioner and Legislative Liaison for the DEC.  Mead                      
  Treadwell, Deputy Commissioner joined her at the committee                   
  LIAISON, DEC, introduced Keith Kelton, Director, Division of                 
  Facilities, Construction and Operations; Kit Ballentine,                     
  Acting Director, Division of Environmental Health; Mike                      
  Menge, Director, Division of Environmental Quality; Kurt                     
  Fredriksson, Deputy Director, Division of Spill Prevention                   
  and Response; Traci Cramer, Budget Analyst for DEC, Office                   
  of Management and Budget; and John Barnett, Executive                        
  Director, Board of Storage Tank Assistance.                                  
  Number 047                                                                   
  MEAD TREADWELL, DEPUTY COMMISSIONER, DEC, stated John                        
  Sandor, Commissioner of DEC, had asked him to speak about                    
  partnerships.  He wanted the committee to know that the DEC                  
  was working to improve its relationships, especially with                    
  communities.  He said the DEC had signed off over fifty                      
  community agreements around the state and was working to                     
  sign more.  These agreements listed basic environmental                      
  problems within the community and strategies to solve them,                  
  he added.                                                                    
  MR. TREADWELL said a second partnership involved the                         
  military, including the Coast Guard, in order to solve                       
  environmental problems.  He cited contaminated sites left by                 
  the military as a large problem.  At a meeting last week of                  
  the Regional Response Team, a federal and state team that                    
  responded to oil spills, the Corps of Engineers had                          
  indicated the working relationship between government                        
  agencies had improved greatly.                                               
  MR. TREADWELL said other partnerships involved the                           
  Department of Natural Resources and Fish and Game on the                     
  Resource Cabinet which helped set state policy on issues                     
  related to natural resources.  He also stated there was a                    
  new pollution prevention program which worked with industry                  
  finding solutions to problems outside regulations.  He said                  
  permission had been given by the Environmental Protection                    
  Agency (EPA) to focus some federal grant funds toward                        
  pollution protection.  He felt this enabled the DEC to work                  
  with industry in ranking those problems and seeking long                     
  term solutions based on the environmental risks.  He said                    
  federal law did not always fit the Alaska situation.                         
  Number 105                                                                   
  MR. TREADWELL stated the third partnership was with the                      
  Environmental Crimes Unit set up between the DEC, the                        
  Department of Law and the Department of Public Safety.                       
  Because some people violated environmental laws with                         
  malicious intent, forty staff members had received training                  
  at the trooper academy in Sitka to enable them to recognize                  
  environmental crimes and some prosecutions were pending.  He                 
  hoped these prosecutions would have a deterrent effect.                      
  MR. TREADWELL said the fourth partnership was with the                       
  University of Alaska.  He felt there were not just economic                  
  and regulatory, but also technical solutions that needed to                  
  be addressed.  He said four times a year the senior staff of                 
  the DEC met with the Deans of the University campuses for                    
  global change research, more cost effective ways for                         
  sanitation, air quality, and other aspects of problem                        
  solving.  He stressed the state and federal relationship was                 
  important to watch, especially in light of the fact that                     
  this administration's goal was to bring more decision making                 
  home to Alaska.                                                              
  MR. TREADWELL pointed out most of the environmental programs                 
  run by the DEC were delegated to the state by the federal                    
  government which made this partnership one of the most time                  
  consuming.  He was happy to announce an order had been                       
  signed to create a separate EPA region for Alaska.  The                      
  problems that face Alaska:  Sanitation, drinking water,                      
  permits for placer mines in the interior, etc., were not the                 
  same as in the lower states.  He said the DEC looked forward                 
  to working with the Clinton administration to set up a new                   
  partnership in terms of federal and state work for Alaska.                   
  Number 186                                                                   
  MS. ADAIR pointed out much of what the DEC must deal with                    
  had its roots in federal law.  She asked members to look at                  
  page 2 of the handout titled "The Alaska Department of                       
  Environmental Conservation" which showed major state and                     
  federal environmental laws.  (The Alaska Department of                       
  Environmental Conservation, December 1992, Departmental                      
  Goals and Summary of Programs may be found in the Resources                  
  Committee Room, Capitol #124, and after the adjournment of                   
  the second session of the 18th Alaska State Legislature, in                  
  the Legislative Reference Library.)                                          
  MS. ADAIR stated that since 1986 over 88 federal laws had                    
  been added or expanded that impacted and placed a tremendous                 
  burden on the DEC.  She said the lack of input on these laws                 
  made it difficult for the legislature to get a handle on the                 
  DEC's responsibilities.  She also provided an organization                   
  chart for the Commissioner's office.  (Office of the                         
  Commissioner organization chart may be found in the                          
  Resources Committee Room, Capitol #124, and after the                        
  adjournment of the second session of the 18th Alaska State                   
  Legislature, in the Legislative Reference Library.)                          
  MS. ADAIR further stated that the Regional and District                      
  Office Boundaries map outlined the divisions and could be                    
  found in the handout cited above.  She said directors                        
  operated divisions that developed programs and those                         
  programs were implemented by the regional administrators.                    
  She said two exceptions were the Facilities Construction and                 
  Operation Division and the Environmental Health Division                     
  which were run out of the Juneau office.  She said the                       
  internal goals for the Department were included in the                       
  handout.  A strategic management planning process had been                   
  successfully started in July 1992.  Instead of being                         
  reactive, the DEC was striving to be pro-active.                             
  MS. ADAIR explained regional administrators, division                        
  directors, and the staff of the Commissioner's office met                    
  quarterly and outlined department goals, environmental                       
  problems, solutions and successes, and wanted more public                    
  input brought into the process.                                              
  MS. ADAIR felt rural Alaska had not been getting the                         
  attention it needed from the DEC mainly because of its                       
  remoteness.  The DEC wanted to create a rural initiative and                 
  after meeting with the Bureau of Land Management (BLM),                      
  learned about their mentor program for students.  Students                   
  from rural Alaska would have the opportunity to work with a                  
  mentor from the DEC for the summer on local environmental                    
  issues.  She said the program might include seafood                          
  processing, bulk fuel storage, or fuel delivery.  Eight DEC                  
  employees were signed up for the summer of 1993 and the BLM                  
  would find the students for the program.  She iterated a                     
  partnership theme had been adopted by the DEC and team                       
  spirit within the DEC was also a challenge because of budget                 
  Number 280                                                                   
  MS. ADAIR said the handout contained fact sheets on                          
  different DEC programs.  She pointed out the Division of                     
  Environmental Health included restaurant inspection, except                  
  in Fairbanks and Anchorage where ordinances had been passed                  
  to take over that function at a local level.  Once the Lt.                   
  Governor had signed the user fee regulation and after the 30                 
  day waiting period, restaurants would pay the DEC for their                  
  inspections, she added.                                                      
  Number 330                                                                   
  HEALTH, pointed out the Division also handled the seafood                    
  inspection program, which included testing for paralytic                     
  shellfish poisoning in crabs and clams, meat and poultry                     
  inspection program, and an animal health program which                       
  included the state dairy farms' transporters and processors                  
  of milk, and monitoring of domestic animals.  She said their                 
  laboratory component supported all other DEC Division                        
  programs located in Palmer.                                                  
  Number 340                                                                   
  MS. ADAIR explained the DEC had two laboratories, one                        
  chemistry lab in Juneau and a lab in Palmer which supported                  
  environmental health.  She said the other division related                   
  to sanitation was the Division of Facility Construction and                  
  Operation.  It included the Village Safe Water program,                      
  fifty percent matching grants for facility construction, and                 
  an operator training program for operators of waste water                    
  treatment facilities.  She invited the committee to a brown                  
  bag lunch presentation on January 21, 1993, by Keith Kelton,                 
  Director of the Division of Facility Construction and                        
  Operation, where the capital budget process would be                         
  Number 360                                                                   
  MR. TREADWELL felt quality Bush sanitation was the number                    
  one health-related threat the DEC faced.  He stated this                     
  administration had made a strong commitment for additional                   
  capital funding for rural sanitation.  He asked members to                   
  acquaint themselves with a report by the bipartisan task                     
  force that had worked around the state for the last year on                  
  this issue.                                                                  
  Number 370                                                                   
  AND OPERATION, explained that last fall a document was                       
  completed called "The Commitment to Alaskan's, Executive                     
  Summary, Recommendations of the Alaska Sanitation Task                       
  Force" which addressed the rural sanitation problems.  He                    
  said 12 sub-task groups representing 25 entities had worked                  
  on issues of education, grants, utility management, local                    
  government, subsidies, operator training, housing, roads,                    
  research and development, the role of Native corporations,                   
  and enforcement.  Separate recommendations were brought                      
  together in this document, some of which overlapped and were                 
  directed at state government agencies so they might address                  
  the issue in a unified manner.                                               
  MR. KELTON added that without budget increases, the task                     
  force recommended joining agency resources and combining                     
  efforts in a more consistent manner than in the past.  That                  
  document had been endorsed by the Alaska Federation of                       
  Natives, the Municipal League, and the Governor's Rural                      
  Development Sub-Cabinet, and was reflected in most of the                    
  agencies' budgetary policy issues.  He said the DEC                          
  considered the issue of completing rural sanitation                          
  improvements over the next 20 years a major goal and the                     
  Finance Committee would see these issues addressed in the                    
  capital budget.                                                              
  Number 440                                                                   
  MS. ADAIR said the Division of Spill Prevention and Response                 
  was created two years ago and consisted of programs                          
  established in response to legislation after the Exxon                       
  Valdez oil spill.  These included contingency planning and                   
  financial responsibility for oil shippers and oil storage                    
  facilities, contaminated sites remediation and the program                   
  for underground storage tanks.                                               
  Number 440                                                                   
  PREVENTION AND RESPONSE, explained that two other programs                   
  in the Division were the Government Preparedness and                         
  Response Program that dealt with the government side of                      
  planning for emergency response as well as the actual                        
  response, and an industry program which related to tanker                    
  traffic through Prince William Sound, large storage, and                     
  terminal facilities.                                                         
  Number 460                                                                   
  MS. ADAIR pointed out this Division was funded primarily                     
  through the Oil and Hazardous Substance Response Fund (the                   
  470 Fund), created by HB 470 in 1986.  The 470 Fund received                 
  no monies until the Exxon Valdez oil spill, and at that time                 
  the legislature passed a nickel per barrel conservation                      
  surcharge on all Alaska North Slope crude which went                         
  directly into the 470 Fund.  She explained that the statute                  
  was specific and the only time the 470 Fund could be used                    
  without specific legislative appropriation was in the event                  
  of an eminent and substantial threat to the environment from                 
  a release of oil or hazardous substance.  Sometimes this                     
  would be preventative and sometimes after the fact.  Part of                 
  the Underground Storage Tank Program was not eligible for                    
  funding out of the 470 Fund.                                                 
  MS. ADAIR stated an annual report by the DEC on the 470 Fund                 
  was due to be out soon.  She explained other agencies also                   
  received monies from the 470 Fund such as the Division of                    
  Emergency Services within the Department of Military and                     
  Veterans Affairs, the Department of Fish and Game and the                    
  Department of Natural Resources.  The State Emergency                        
  Response Commission (SERC) also received money out of the                    
  470 Fund.  She pointed out the SERC had its roots in federal                 
  law and even though it was established during the same time                  
  as the Exxon Valdez spill, it was created in response to the                 
  Union Carbide chemical release.                                              
  MS. ADAIR pointed out in Alaska statutes, oil was sometimes                  
  defined as a hazardous substance.  She felt Title 46 which                   
  directed the DEC's activities needed to be cleaned up.  She                  
  offered to answer any questions regarding the 470 Fund.                      
  Number 530                                                                   
  MR. TREADWELL offered to brief the committee on the annual                   
  report of the 470 Fund.                                                      
  CHAIRMAN WILLIAMS noted for the record that Representative                   
  Hudson and Carney joined the committee at 8:40 a.m.                          
  Number 540                                                                   
  explained that the programs in this Division had to do with                  
  air, land, and water, including solid waste management, air                  
  quality, etc., and these programs effected everyone's lives.                 
  He said some of these programs typified the partnership with                 
  federal programs and Congress desired that local governments                 
  administer the programs to the maximum extent feasible.  The                 
  concept known as "primacy" was offered by the federal                        
  government, and the state had primacy in the air arena at                    
  present.  In accepting primacy, the state accepted all the                   
  federal mandates, however, it also afforded some opportunity                 
  for local control.                                                           
  MR. MENGE pointed out federal laws in many cases were                        
  written for other states and would not take into                             
  consideration Alaska situations.  He felt his Division often                 
  acted as a go-between to moderate some of the inflexible                     
  positions the EPA might take in order to protect the Alaska                  
  environment to the maximum extent possible.  He said other                   
  issues within the Division were drinking water, industrial                   
  waste water, including municipalities, and industrial                        
  discharge where the EPA issued permits and had primacy.  He                  
  explained the program of domestic waste water was in the                     
  process of being privatized.  A manual was being created,                    
  training through the University and certification through                    
  DEC should help complete that process, he added.                             
  Number 610                                                                   
  MR. MENGE said another water issue was non-point source                      
  pollution.  He explained a point source as anything that                     
  came out of a pipe and anything else that dealt with water,                  
  such as rain falling on a parking lot or a stream in a                       
  backyard.  Forest practices was the major area where non-                    
  point source pollution was a consideration.  Storm water was                 
  also a non-point source water pollution issue.  He felt                      
  after the reauthorization of the Clean Water Act and since                   
  the issues of non-point sources which included agriculture,                  
  irrigation, forestry and storm water run-off had not been                    
  addressed in the last 20 years, that federal legislation                     
  would be seen in this area in 1993.                                          
  MR. MENGE said another non-point source program was the                      
  water quality standards program.  The federal government,                    
  through the Clean Water Act, set up requirements for each                    
  state regarding water quality standards giving the state                     
  flexibility relating to those standards.  He said this was a                 
  complicated issue and offered any information needed when                    
  the issue came before the legislature.  In regard to solid                   
  and hazardous waste areas, the EPA and the DEC had formed a                  
  long-term partnership and historically, the EPA retained                     
  primacy in this area.  Five years ago, at the direction of                   
  the legislature, the DEC moved forward to obtain primacy of                  
  that program.  However, because of the budget restraints,                    
  more responsibility had been left with the EPA.  He felt                     
  this issue would also come before the legislature during the                 
  18th Legislative Session.                                                    
  MR. MENGE stated the State's Resource Conservation Recovery                  
  Act Program was designed to permit and inspect facilities to                 
  ensure their compliance with state and federal laws.  He                     
  explained that at the beginning of the year, the DEC and the                 
  EPA negotiated which activities would be performed by each                   
  organization.  After a spill, the DEC's Division of Spill                    
  Prevention and Response would have jurisdiction.  He said                    
  solid waste management, primarily municipal solid waste, was                 
  in his Division's jurisdiction, and also included large                      
  volume waste associated with mining and oil and gas                          
  activities.  Major new federal laws were being passed and                    
  the state was in the process of adopting regulations in                      
  order to retain primacy in this area.                                        
  Number 675                                                                   
  MR. MENGE explained the EPA had offered significant                          
  incentives to allow the State to approach the resolution of                  
  problems in permafrost and remote areas that lacked                          
  transportation.  He pointed out the entire law regarding                     
  solid waste was written for areas that had roads, and in                     
  Alaska, a road was not always a part of the picture.  He                     
  said the organic chemical laboratory was used when a                         
  substance analysis was needed immediately, as well as                        
  certified private labs around the state.  In order to                        
  certify private labs, the laboratory must be able to not                     
  only do the testing needed, but also judge the quality of                    
  the work in private labs.                                                    
  MR. MENGE said work was being done to form partnerships with                 
  the University system, the Department of Health and Human                    
  Services, and the Forest Service, for better utilization of                  
  the laboratory facility and equipment, which could help                      
  offset the cost of maintaining the facility.                                 
  Tape 93-4, Side B                                                            
  Number 000                                                                   
  MR. MENGE said the state's coastal zone interactions came                    
  under the jurisdiction of the Division of Environmental                      
  Quality.  The Division also was responsible for the quality                  
  of community agreements as referred to by Mead Treadwell.                    
  He hoped the agreements were being used as tools so                          
  communities and the DEC could work together more                             
  successfully.  He said the pollution prevention aspect was                   
  being integrated into the everyday permitting process.                       
  Number 074                                                                   
  MS. ADAIR pointed out the DEC was very important to the                      
  economic development of the state because a permitting                       
  requirement would be needed for such businesses as seafood                   
  processors, restaurants, bars, and hotels, or industrial                     
  businesses.  She assured members that the DEC was striving                   
  to process permits in a timely fashion and the conditions                    
  regarding the permit were reasonable.  Lastly, she said the                  
  Division of Information and Administrative Services provided                 
  financial services, reviewed grant applications, provided                    
  public information, personnel, supply and data processing.                   
  Number 117                                                                   
  MS. ADAIR stated the DEC expected a variety of activities in                 
  Washington, D.C., this year that would impact the DEC.  One                  
  of the most important issues might be a national seafood                     
  inspection program.  She pointed out the DEC's Division of                   
  Environmental Health seafood inspection program was                          
  considered a model for the United States and had been used                   
  as the basis for past federal bills, and could be used again                 
  in 1993 as a model.  Other issues that would affect Alaska                   
  were the Clean Water Act and the Resource Conservation and                   
  Recovery Act which were up for reauthorization in 1993.                      
  MS. ADAIR pointed out that both the governor's office in                     
  Washington, D.C., and a contract lobbyist working for the                    
  EPA helped keep the DEC informed on pending issues in                        
  Washington.  She said the DEC staff in some cases traveled                   
  to Washington, D.C., in order to bring information about                     
  Alaska's unusual circumstances such as the lack of roads in                  
  rural Alaska.                                                                
  Number 160                                                                   
  MR. TREADWELL informed the committee that the DEC's                          
  Commissioner, John Sandor, served as one of three state                      
  trustees on the Exxon Settlement Trust Council.  He said                     
  that many issues, including Kachemak Bay, were being                         
  considered by these trustees and probably would be brought                   
  before the legislature.  Secondly, he said radiation threats                 
  affecting Alaska was an issue being worked on with the                       
  Department of Energy.  He also felt the committee would want                 
  a briefing on a study requested by the governor on radiation                 
  threats affecting Alaskans.                                                  
  Thirdly, MR. TREADWELL pointed out wetlands were Alaska's                    
  most important issue under the Clean Water Act.  Much of the                 
  state was wetlands and the federal government was the local                  
  zoning authority.  He stated that the DEC was drafting a                     
  state wetlands control program that would enable the state                   
  to receive a statewide general permit from the Corps of                      
  Engineers for a better wetlands management scheme.  The                      
  fourth issue he wanted the committee to be aware of was                      
  international issues.  He said the state was affected in the                 
  Arctic by what was put into the air and water by neighbors                   
  across the sea.                                                              
  MR. TREADWELL added the Department of State had asked Alaska                 
  to act as an observer and a participant in meetings of the                   
  Arctic Environmental Protection Strategy.  Also, the state                   
  was involved in several programs with the Northern Forum, an                 
  association of fourteen regional governments in the north,                   
  to exchange environmental and clean-up information.                          
  Number 217                                                                   
  REPRESENTATIVE BILL HUDSON asked if the governor would have                  
  a bill prepared regarding the $50 million criminal                           
  settlement from the Exxon Valdez case, similar to HB 411                     
  that was introduced during the 17th Legislative Session.                     
  MR. TREADWELL said the administration wanted to see what                     
  action the trustees took on January 19, 1993, and he felt                    
  there would be a proposal or a position on existing                          
  proposals forthcoming.                                                       
  REPRESENTATIVE HUDSON said he thought the action taken by                    
  the trustees was that the state agreed to spend $7.5 million                 
  and the federal government agreed to another $7.5 million to                 
  buy back Kachemak Bay land, for a total of $15 million.                      
  MR. TREADWELL said the state, in addition to the lawsuit                     
  against Exxon, had filed a lawsuit against Alyeska.                          
  Involved in that $30 million settlement was a $7.5 million                   
  payment to buy back lands at Kachemak Bay.  The federal and                  
  state trustees who jointly administered the $900 million in                  
  the civil settlement had agreed to spend $7.5 million from                   
  that $900 million to help buy back the land at Kachemak Bay                  
  State Park.  He understood one of the conditions the                         
  trustees placed on the agreement was that the buy-back would                 
  not be greater than $22.5 million.                                           
  MR. TREADWELL concluded the administration would like to                     
  work with the legislature in finding funding sources,                        
  possibly out of the general fund, or other sources such as                   
  land or timber trades, he added.                                             
  Number 250                                                                   
  REPRESENTATIVE JOHN DAVIES asked for an update on the                        
  oxygenated fuel issues.                                                      
  MR. TREADWELL said a meeting would be scheduled with                         
  scientists and policy makers to look at the work done by the                 
  Center for Disease Control (CDC), the Alaska Department of                   
  Health, and other research that had been done on the                         
  oxygenated fuel issue as soon as the CDC was ready to make a                 
  presentation.  In Fairbanks, the EPA had given the governor                  
  the option of canceling that oxygenated fuel program because                 
  of health concerns raised in the community.  The program was                 
  then canceled.  The EPA agreed to step up the studies on                     
  health effects on this issue, he added.                                      
  MR. MENGE said the DEC expected to hear from the CDC in the                  
  next few days.                                                               
  REPRESENTATIVE DAVIES asked about the status of studies in                   
  Anchorage and whether the CDC would perform studies there.                   
  MR. TREADWELL said one of the major questions that would be                  
  addressed was whether the concerns found in Fairbanks also                   
  applied to Anchorage.                                                        
  MR. MENGE said the Department Health and Human Services had                  
  done parallel studies in Fairbanks and Anchorage, but the                    
  CDC had only done studies in Fairbanks.                                      
  Number 293                                                                   
  REPRESENTATIVE DAVIES asked for the status of the "Air                       
  Quality Permit Bill" proposed by the DEC Air Quality                         
  Legislative Working Committee on the Clean Air Act and what                  
  the DEC's position would be if the governor introduced that                  
  MS. ADAIR said the DEC supported the committee's proposed                    
  legislation and a consensus had been reached as a result of                  
  four months of hard work by individuals who devoted their                    
  own time and energy.  She understood the Senate Resources                    
  Committee would be introducing this bill and the DEC would                   
  be working to help move it through the process.  She said                    
  the bill must be passed during the 18th Legislative Session                  
  to keep Alaska Highway Fund sanctions from taking place.                     
  REPRESENTATIVE DAVIES asked if the DEC had a position on HB
  39, "An Act relating to prevention, abatement, and control                   
  of air pollution."                                                           
  MS. ADAIR said she had not done a comparison of the two                      
  bills but believed they were not the same.  She said the DEC                 
  would support the proposed "Air Quality Permit Bill" (the                    
  Senate Resources Committee bill).                                            
  Number 316                                                                   
  REPRESENTATIVE JOE GREEN said in the past there had been an                  
  adversarial feeling between the DEC and industry and he was                  
  glad to see that was changing.  He wanted to know if the DEC                 
  was taking a strong role regarding wetlands' classification                  
  and, specifically, if they agreed permafrost land should                     
  automatically be classified as wetlands.  He disagreed with                  
  that regulation.                                                             
  Number 337                                                                   
  MR. TREADWELL said according to the law, all permafrost                      
  areas in the state were classified as wetlands.  He said the                 
  Bush administration had made the promise of a no net loss of                 
  the nation's wetlands and a White House task force had been                  
  assigned that issue.  In Alaska, a smaller percentage of                     
  wetlands was lost to development than any other place in the                 
  nation.  He understood an average of 53 percent of wetlands                  
  had been lost in the Lower 48, and Alaska was less than one                  
  MR. TREADWELL explained that the Bush administration had                     
  worked on a delineation manual used in the field to define                   
  wetlands.  Alaska had some input regarding the manual but it                 
  had been delayed into the Clinton administration. On August                  
  9, 1991, President Bush had issued a policy statement on                     
  wetlands, which included a statement that states with less                   
  than one percent loss of wetlands would not have to go                       
  through the litigation sequencing required by other states.                  
  This statement had not been backed by regulations but the                    
  DEC had been working to make the one percent rule stick.                     
  MR. TREADWELL felt if the one percent rule was in effect,                    
  the DEC could classify high, medium and low wetlands, and                    
  keep tracking the use of wetlands to simplify the                            
  application process.  He stated the DEC would be working                     
  towards adding input to the delineation manual, asking for                   
  specific science and for regional delineation manuals.  He                   
  said it was very important for everyone to work for the                      
  state's exemption in federal regulations, and that a major                   
  part of the state's program was to classify wetlands by                      
  value and set up a scheme to accomplish that.  He felt this                  
  classification was in the best interest of sound land                        
  Number 396                                                                   
  REPRESENTATIVE GREEN said the wetlands issue certainly                       
  adversely affected industry and community development.  He                   
  wanted to know if there were any group efforts such as that                  
  of the Municipal League on the issue.                                        
  Number 400                                                                   
  MR. TREADWELL said the Municipal League had passed two                       
  resolutions in the past supporting the one percent rule and                  
  the state permitting program.  He said the DEC was committed                 
  to making appointments to a wetlands task force for strong                   
  municipal representation.  He cited Petersburg as an example                 
  where all usable municipal land was considered wetlands, and                 
  assured the committee local communities would be involved                    
  and considered as partners in the planning process.  He                      
  noted this administration had said zoning belonged in local                  
  REPRESENTATIVE ELDON MULDER said several years ago Anchorage                 
  had been embarrassed by signs around creeks and lagoons                      
  cautioning the public about polluted water.  He said                         
  legislation had been passed for a matching grant program for                 
  communities, and the state could provide funds to identify                   
  the source of that pollution.  He asked the DEC if anything                  
  had been done with that program.                                             
  MR. KELTON said Anchorage traditionally received a lump sum                  
  of money instead of identifying specific projects for                        
  funding.  Those Anchorage dollars required a 50 percent                      
  match.  Anchorage could then allocate those dollars in any                   
  area for the improvement of environmental water quality or                   
  sanitation problems.  He said he would have to find out past                 
  appropriations for Anchorage, but his recollection was that                  
  Anchorage spent minimal amounts on water quality issues and                  
  had focused funding on extensions of Local Improvement                       
  Districts and treatment processes at the Point Margo plant.                  
  Number 456                                                                   
  MR. TREADWELL said there had been a few other efforts to                     
  clean up Anchorage streams.  He pointed out the Water Watch                  
  statewide program enlisted volunteer groups, and that an                     
  effort was being made to have all major streams in the                       
  Anchorage bowl adopted by these groups.  Secondly, he said                   
  the fecal coliform number that the state used was about ten                  
  times less than the national number.  Rumor was that this                    
  number had been a typographical error and that error                         
  declared many of the streams polluted, he added.  This error                 
  was being looked at and a decision was pending in the water                  
  quality standards to correct the error.                                      
  MR. TREADWELL assured the committee that those streams in                    
  the Anchorage area were being looked at, and an agreement                    
  had been made to list the polluted water bodies statewide                    
  and provide a regulatory plan to return those water bodies                   
  to water quality standard.  Within the Anchorage area and                    
  other urban areas, he predicted that sewers and septic tanks                 
  on the hillsides would become a water quality issue.  He                     
  felt the DEC needed long-term solutions for these                            
  REPRESENTATIVE MULDER said village safe water was a big                      
  problem, and applauded the DEC's efforts in urban areas as                   
  well, because not only were the signs embarrassing for                       
  visitors, but it was also a health hazard.  He agreed long-                  
  term solutions needed to be addressed and funded, especially                 
  better and expanded sewage systems.                                          
  MR. TREADWELL said the assessment program mentioned earlier                  
  was a capital budget item this year (1993) in the amount of                  
  Number 510                                                                   
  REPRESENTATIVE HUDSON asked if any seafood or health                         
  inspections on offshore vessels or operations were being                     
  MS. BALLENTINE said any vessel that came into an Alaskan                     
  port was permitted by the DEC and inspections were done                      
  while those vessels were in port.  She said further that the                 
  DEC did not have the capability for inspections on fishing                   
  REPRESENTATIVE HUDSON pointed out that by the time the                       
  product came into port it had already been processed.                        
  MS. BALLENTINE concurred.                                                    
  Number 524                                                                   
  MR. TREADWELL pointed out the DEC had held up the shipment                   
  of products in some situations in the past.                                  
  REPRESENTATIVE HUDSON said the bottom fish operation by the                  
  Puget Sound fleet was of major concern to him.  He wanted to                 
  know its effect on the Alaskan economy and whether the                       
  product was well inspected.                                                  
  MR. TREADWELL said besides seafood inspection, vessels must                  
  also comply with oil and water laws.  He disclosed the DEC                   
  had asked the EPA to ensure inshore facilities and offshore                  
  processors would comply with the same grinding, air quality,                 
  and discharge requirements.  He said enforcement efforts in                  
  cooperation with the Coast Guard had been stepped up                         
  regarding processors within the three mile limit to make                     
  sure those processors held state permits.                                    
  Number 542                                                                   
  REPRESENTATIVE HUDSON said he had worked with oil spill                      
  prevention laws and was aware of the need for contingency                    
  plans for non-crude operators.  He wanted to know if a plan                  
  was being developed and when that plan would be completed.                   
  MS. ADAIR disclosed a contingency plan was in the works, but                 
  financial responsibility continued to be a problem.                          
  REPRESENTATIVE HUDSON asked if the governor had vetoed the                   
  bill which gave assistance to small operators.                               
  MS. ADAIR said the bill suspending financial responsibility                  
  had passed.                                                                  
  MR. TREADWELL added that either in that bill or other                        
  language, the legislature had requested a legislative                        
  research group to come up with a report with the DEC on that                 
  bill, and a letter of intent was pending.  He was scheduled                  
  to meet in Anchorage with members of the insurance committee                 
  that might have found a solution, he noted.                                  
  Number 563                                                                   
  REPRESENTATIVE HUDSON voiced concern about the Clean Air Act                 
  and asked if the air quality bill introduced in the Senate                   
  would reflect the administration's view.                                     
  MS. ADAIR said the "Air Quality Permit Bill" was a product                   
  of a DEC appointed interim committee.  She said proposed                     
  changes to [AS].O10 language had not been added to the bill,                 
  and [AS].O10 contained very broad statutory language which                   
  allowed the DEC to regulate air pollutants to protect public                 
  health.  She pointed out there was concern that the DEC                      
  would use this provision unfairly to regulate air                            
  contaminants.  The statute had been on the books since 1971                  
  when the DEC was established and it had only been used twice                 
  outside of what had been required by the federal law.  One                   
  was to regulate ammonia discharge from the Unical plant in                   
  the Kenai.  The plant was one of the largest ammonia plants                  
  in North America and ammonia was not one of the regulated                    
  substances under the federal act.                                            
  MS. ADAIR stated the other instance in which the statute was                 
  used regarded Government Hill in Anchorage, where a tank                     
  farm sat below a bluff.  Because the tanks were owned by                     
  separate owners, it escaped regulation under the federal                     
  act, so the DEC used [AS].010 to regulate benzine emissions                  
  from Government Hill.  She said the public was very                          
  concerned about health issues in this situation and a                        
  compromise had been made in the proposed legislation.  The                   
  environmental community and some industrial groups had been                  
  opposed to the addition of [AS].010 language and, therefore,                 
  it had been left out.  She felt that including [AS].010                      
  language could end the consensus that all parties had worked                 
  so hard to reach.                                                            
  MR. TREADWELL added the DEC had kept their commitment to the                 
  interim committee to deliver to the legislature the proposed                 
  "Air Quality Permit Bill".  He said the DEC's commissioner                   
  had approached the committee with some questions regarding                   
  the proposed bill and the [AS].010 issue could be brought up                 
  again before the committee.  He felt some parts of [AS].010                  
  language were important to consider, if not in this bill,                    
  but in other places such as a scientific advisory group.  He                 
  said the DEC supported the concept of a scientific advisory                  
  Number 615                                                                   
  REPRESENTATIVE CON BUNDE commended the DEC on actively                       
  pursuing malicious polluters.  He asked for a briefing when                  
  the DEC addressed the problems with operation CHARIOT.  He                   
  also asked for an explanation of the resource funding going                  
  to the Department of Veterans and Foreign Affairs.                           
  Number 637                                                                   
  MS. ADAIR said when the response legislation was passed                      
  after the Exxon Valdez accident, responsibility was divided                  
  between the DEC and the Division of Emergency Services which                 
  was in the Department of Military and Veterans Affairs                       
  (DMVA), for responding to an oil spill.  The DEC was given                   
  authority to do the contingency planning, the financial                      
  responsibility, and the DMVA was given the responsibility                    
  for statewide training depots and corps, she added.                          
  REPRESENTATIVE BUNDE asked if and when a federal EPA office                  
  was located in Alaska how it would impact the DEC in regard                  
  to duplication of effort and regulations.                                    
  MS. ADAIR hoped the DEC and the EPA would meet, divide                       
  responsibilities and work more efficiently together.  She                    
  explained that because of the EPA's Seattle location, the                    
  DEC was often forced to duplicate the EPA's efforts to                       
  insure all information was gathered and that such                            
  information was correct.                                                     
  REPRESENTATIVE GREEN asked if the formation of the EPA's                     
  District 11 would provide the EPA with more information on                   
  Alaska's problems.                                                           
  MS. ADAIR felt if the EPA's Regional Administrator and the                   
  decision-makers were Alaskans, it would be more likely that                  
  they would have information for the circumstances dealt with                 
  here in Alaska.                                                              
  Tape 93-5, Side A                                                            
  Number 000                                                                   
  REPRESENTATIVE GREEN asked if the DEC in its biological lab,                 
  in conjunction with the Department of Health, handled                        
  hepatitis screening.                                                         
  MS. ADAIR said during an outbreak, the DEC could be involved                 
  in testing, but the primary responsibility for humans was                    
  handled by the Department of Health and Social Services.                     
  REPRESENTATIVE GREEN asked if a list of the funding of HB
  470 would be available to the legislature.                                   
  MS. ADAIR said the report by the DEC was due to the                          
  legislature on the fifteenth or twentieth day of the                         
  session, and the transmittal letter and report would be on                   
  Number 036                                                                   
  REPRESENTATIVE DAVIES asked if the Clean Air Act bill was                    
  considered a consensus bill by the DEC.                                      
  MS. ADAIR replied in the affirmative.  She pointed out a                     
  briefing had been held in the governor's conference room and                 
  all members of the interim committee that worked on the                      
  proposed legislation had voiced their support and intent to                  
  work to ensure passage of the Clean Air Act bill.  She said                  
  certain amendments added to the bill could cause some groups                 
  to withdraw their support.                                                   
  Number 047                                                                   
  REPRESENTATIVE DAVIES asked for the approximate percentage                   
  of total support from federal dollars versus state dollars                   
  for the DEC's operation.                                                     
  was unsure of the percentage, but disclosed the general fund                 
  portion of the operating budget was $21 million.                             
  MS. ADAIR disclosed the total operating budget to be                         
  approximately $45 million.                                                   
  MR. TREADWELL explained that on a program by program basis                   
  the DEC received money for drinking water programs and air                   
  programs which, after the air bill, would be self                            
  liquidating, and have more federal mandates on solid                         
  hazardous waste with less funding.  He indicated the DEC                     
  received federal funding in other areas as well.                             
  REPRESENTATIVE DAVIES inquired into the percentage of                        
  program budgets that would be funded under user fees and was                 
  concerned that if the user fee was too high, compliance                      
  might be a problem.                                                          
  Number 118                                                                   
  MS. ADAIR said the DEC's goal was to privatize domestic                      
  septic system approvals.  For one year the DEC had been                      
  working toward this goal, she added, and explained that the                  
  DEC began septic system inspections as a favor to the                        
  lending industry.  She noted this was a very time consuming                  
  program which, in other states, was a local responsibility.                  
  She said the DEC was working with Alaska Housing and hoped                   
  to charge the $250 fee only when a private engineer was not                  
  used in such inspections.                                                    
  Number 150                                                                   
  REPRESENTATIVE JEANNETTE JAMES asked whether the EPA office                  
  would be located in Anchorage or Juneau.                                     
  MS. ADAIR disclosed the EPA office would be located in                       
  Anchorage, according to the Presidential directive.                          
  Number 160                                                                   
  REPRESENTATIVE PAT CARNEY asked why the DEC was spending                     
  state money for domestic septic system inspections without                   
  legislative regulations requiring the DEC to perform that                    
  MS. ADAIR said historically the DEC had performed domestic                   
  septic system inspections.  She noted lending institutions                   
  wanted insurance by the health authority that the septic                     
  system was in working order and in compliance with local                     
  regulations.  Because the Constitution said the legislature                  
  should provide for the public health, the DEC had been made                  
  the health authority for the state, and unless a local                       
  government passed an ordinance to take that responsibility                   
  upon themselves, the DEC held responsibility for this                        
  inspection.  When the DEC stopped doing these inspections in                 
  years past, banks stopped making loans and the DEC was                       
  forced to begin the process again, she advised.                              
  Number 204                                                                   
  MR. TREADWELL pointed out although the DEC felt inspections                  
  were needed for septic tanks, it was not mandated under the                  
  DEC's regulations and, therefore, could be privatized.                       
  CHAIRMAN WILLIAMS asked how the DEC would like to handle                     
  questions from the legislature.                                              
  MS. ADAIR preferred questions come to her office from the                    
  legislature, which she could then direct to the appropriate                  
  Number 244                                                                   
  REPRESENTATIVE HUDSON asked the Committee to filter                          
  questions through the House Resources Committee staff so all                 
  members receive the information.                                             
  CHAIRMAN WILLIAMS announced that at 8:00 a.m. on Friday,                     
  January 22, 1993, there would be an overview hearing by the                  
  Department of Fish and Game.  He announced further that the                  
  House Special Committee on Fisheries had been invited to                     
  that meeting.                                                                
  There being no further business to come before the                           
  committee, Chairman Williams adjourned the meeting at 9:50                   

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