Legislature(2013 - 2014)BARNES 124
02/28/2013 08:30 AM Senate ADMINISTRATIVE REGULATION REVIEW
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Impact of Federal Actions on Alaska Administrative Regulations | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
ADMINISTRATIVE REGULATION REVIEW COMMITTEE
February 28, 2013
8:33 a.m.
MEMBERS PRESENT
Representative Lora Reinbold, Chair
Senator Cathy Giessel, Vice Chair
Representative Mike Hawker
Representative Geran Tarr
Senator Gary Stevens
Senator Hollis French
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: IMPACT OF FEDERAL ACTIONS ON ALASKA ADMINISTRATIVE
REGULATIONS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
SAM BATKINS, Director
Regulatory Policy
American Action Forum
Washington, DC
POSITION STATEMENT: Provided a presentation on the impact of
federal actions on Alaska Administrative Regulations.
DAVE CASEY, Supervisor
Kenai and Juneau Field Offices
Regulatory Division - Alaska District
U.S. Army Corps of Engineers
JBER, Alaska
POSITION STATEMENT: Provided a presentation on the impact of
federal actions on Alaska Administrative Regulations.
ACTION NARRATIVE
8:33:42 AM
CHAIR LORA REINBOLD called the Administrative Regulation Review
Committee meeting to order at 8:33 a.m. Representatives Tarr
and Reinbold and Senators Giessel, and Stevens were present at
the call to order. Representative Hawker and Senator French
arrived as the meeting was in progress.
^Presentation: Impact of Federal Actions on Alaska
Administrative Regulations
Presentation: Impact of Federal Actions on Alaska Administrative
Regulations
8:35:02 AM
CHAIR REINBOLD announced that the first order of business would
be a presentation regarding the impact of federal action on
Alaska's administrative regulations.
8:35:42 AM
SAM BATKINS, Director, Regulatory Policy, American Action Forum,
informed the committee that the American Action Forum is based
in Washington, D.C., and is a center-right policy organization
headed by Douglas Holtz-Eakin, former director of the
Congressional Budget Office. Mr. Batkins noted that in his
daily activities he has the pleasure of examining federal
regulations. He then directed the committee's attention to his
presentation and his desire to examine the macro regulatory
picture as it exists today on the federal level as well as the
micro level in terms of the impacts on Alaska with regard to the
Environmental Protection Agency (EPA) and the U.S. Department of
Health & Human Services (HHS) implementation of the Affordable
Care Act. Referring to the slide entitled "Current EPA
Greenhouse Gas Regulations," he explained that the EPA has plans
to finalize rules for new stationary sources by this March.
There are indications of plans to extend the greenhouse gas
(GHG) rules to existing sources. He then directed attention to
the chart entitled "EPA Paperwork Total," which catalogs the EPA
paperwork burden that has been growing steadily since 1995.
This is solely paperwork required for EPA, which collects
roughly 400 forms on a daily basis while the federal government
as a whole collects more than 9,100 official collections,
including tax forms. Moving on to the slide entitled "Notable
GHG Regulations," he highlighted that many of them are in the
transportation sector with rules for the Corporate Average Fuel
Economy (CAFE) standards for 2012-2016 automobiles and the CAFE
standards for 2017-2025, which carry the largest price. There
are also GHG rules for heavy-duty trucks. He noted that he
would discuss the mandatory reporting of GHGs later in the
presentation. Moving on to the slide entitled "Future EPA GHG
Regulations," Mr. Batkins directed attention the chart on it
entitled "Number of Facilities Compliant at GHG Rate." He
explained that the EPA has a standard for the rate at which one
emits carbon dioxide equivalents. There is not an upward limit
on how much can be released for a new stationary source under
the proposed rule, but there is a limit on the rate of pounds
per carbon dioxide equivalent per megawatt hour (lb/MWh). The
general rule, in terms of all coal or all natural gas, is that a
combined cycle natural gas facility will likely fall under 1,000
lb/MWh of carbon dioxide. However, a coal facility is likely to
far exceed the 1,000 lb/MWh of carbon dioxide threshold. The
chart relates the total number of the largest facilities in the
U.S., which is a little over 100. The chart also relates how
many of those facilities would be compliant at the various
thresholds specified. Most of the facilities that are compliant
at levels below 1,500 lb/MWh and lower are mostly refineries,
steel production facilities, and natural gas. He then turned to
the slide entitled "Affordable Care Act Implementation," which
he noted is generally proportional to population as HHS
regulates insurers, doctors, hospitals, and patients. The HHS
is unlike the EPA that impacts certain sectors, such as coal and
manufacturing that are doing the polluting that EPA regulates.
He directed attention to the total private and total state
costs, which are solely from the administration's figures. He
explained that once a regulation is out with the hour and cost
estimates from the administration that is simply recorded in the
database. Therefore, it's just a sum of everything that is
recorded under the Affordable Care Act (ACA) and there is no
real analysis. He highlighted the total paperwork burden hours
to be 81.1 million hours annually, which equals roughly 40,000
full-time equivalents. Therefore, it would take more than
40,000 employees working a 2,000 hour year to fill out the
required red tape from ACA. Another way to understand the 81.1
million hours annually is to look at the gross domestic product
(GDP) per hour worked, which is roughly $5 billion in terms of
impact on productivity.
8:42:25 AM
MR. BATKINS moved on to the Alaska-specific impacts and the
slide entitled "Mandatory Greenhouse Gas Reporting." He
informed the committee that the EPA tracks all facilities that
emit more than 25,000 tons per year of carbon dioxide equivalent
into the atmosphere. The GHG reporting is more or less the
paperwork record retention cost of complying with the reporting
of EPA's rule and amounts to roughly $287 million. The EPA, he
noted, is very transparent in terms of being able to see every
facility, how much the facility emits, the location of the
facility, what the facility does, and the type of fuel the
facility burns. The EPA's web site listed 63 facilities in
Alaska. Although it varies, the per facility cost is roughly
$17,000, which for the Alaska share amounts to about $1 million
under the GHG reporting. The slide entitled "Distribution of
Regulated Greenhouse Gas Entities" presents a map showing the
GHG entities in Alaska. As the map illustrates there is a
cluster of GHG facilities in central Alaska and a few GHG
facilities located near the coasts. Referring to the slide
entitled "Alaska Power Plant Impacts," Mr. Batkins informed the
committee that of those 63 GHG facilities, 14 are EPA-regulated
power plants for their GHG emissions. He highlighted that
Nikiski and Barrow U&E, both of which are natural gas
facilities, would be compliant [with EPA's] stringent new source
standard of 1,000 tons per MWh. According to EPA data, the
Chena plant, a coal facility, is the most inefficient in terms
of the ratio of carbon dioxide in the air to energy production.
The chart on the slide entitled "Alaska Power Plant Impacts"
provides an idea as to what facilities in Alaska would likely be
compliant; depending upon the direction EPA takes in its
regulation of existing sources. Turning to the slide entitled
"ACA 'Face-to-Face' Requirement," Mr. Batkins said that the
"Face-to-Face" requirement is a regulatory requirement that has
particular impact on Alaska as it essentially dictates that in
order to request home health services, a physician must show
documentation that a face-to-face encounter has occurred. While
the aforementioned seems benign, it does involve a lot of travel
and the attendant higher cost Medicare copays that result. The
slide entitled "ACA 'Face-to-Face' Requirement Continued"
reviews the specifics in terms of the number of patients that
would be required to make face-to-face doctor visits and the
number of hours required. The number of hours the patients
travel is not listed directly in the paperwork analysis, but the
agency did consider it in terms of the impact on patients and
their doctors. He then mentioned the $25 million in higher
Medicare payments for beneficiaries that is a result of this new
requirement.
8:46:58 AM
MR. BATKINS turned to reform possibilities, noting that there
are common sense changes that could be agreed upon by both
progressives and conservatives. As the slide entitled "Federal
Reform Issues" relates there are three main issues:
transparency, auto-pilot, and retrospective review. In terms of
transparency, Mr. Batkins said there is not much analysis,
particularly on the independent agency business side, with
regard to the impact a regulation has to business, the benefits
derived, and the cost imposed, especially with implementation of
the Dodd-Frank Act that's close to 400 rules. Rarely, if ever
is a cost-benefit analysis performed [in terms of the impact of
regulations] on consumers, businesses, or individuals. He then
touched on the retrospective review. In 2011 an executive order
seeking a regulatory look-back was signed, which is not new as
former President Carter issued a similar order in 1978.
However, the pace of implementation is slow as far more rules
are being created than rescission or streamlining of old rules.
Moving on to the slide entitled "State-Level Reforms," he
highlighted the regulatory reform proposal passed by Indiana
that he characterized as very common sense. Indiana's
legislation allows agencies, public entities, and private
entities to develop a cost-benefit analysis for a particular
rule and review the impacts on employment, consumer protection,
worker safety, and the environment. Furthermore, the Indiana
legislation includes a three-year regulatory look-back, at which
time the real costs, benefits, and impacts of that regulation
are apparent. Continuing with the slide entitled "International
Regulatory Reform," he directed attention to the Organisation
for Co-operation and Development's (OECD's) 12 principles of
regulatory policy. With regard to transparency, he opined that
analyzing costs and benefits and performing regulatory look-
backs is practiced on the international level. Mr. Batkins
further opined that transparency and rigorous analysis are very
important, particularly since the regulatory side often doesn't
have the benefit of data.
8:51:02 AM
REPRESENTATIVE TARR, regarding the Indiana legislation, inquired
as to the fiscal impact of the three-year look-back. She
further inquired as to whether the activities required for the
three-year look-back would be absorbed into existing jobs.
MR. BATKINS recalled that the fiscal implications were
negligible, which is why it received near unanimous support. On
the federal level opinion is split as to whether to have more
oversight over regulators; OECD believes there should be
oversight of the regulators as well as oversight of the
overseers.
8:52:30 AM
CHAIR REINBOLD inquired as to the impacts of the GHG regulations
for existing power plants. Alaska already has high electrical
rates, and therefore she inquired as to how much more it would
cost Alaskans to comply with these GHG regulations.
MR. BATKINS noted that in terms of existing sources he doesn't
know explicitly what EPA will do now as there is no proposed
rule, although there are a lot of models. The Natural Resources
Defense Council has a plan to apply the Clean Air Act to
existing sources and its model was roughly $4 billion a year in
costs. He said he didn't know exactly how the Natural Resources
Defense Council would impact Alaska. Although if there was a
stringent rule of 1,000 lb/MWh of carbon dioxide applied to
existing sources, it would likely mean closure of plants that
are not compliant, he doubted EPA would apply the standard for
new sources to existing sources.
8:55:31 AM
DAVE CASEY, Supervisor, Kenai and Juneau Field Offices,
Regulatory Division - Alaska District, U.S. Army Corps of
Engineers, began by informing the committee that the Regulatory
Division administers parts of the Rivers and Harbors Act of 1899
and the Clean Water Act. He then informed the committee that he
has been in the Regulatory [Division] in Alaska for 18 years and
a U.S. Army Corps of Engineers' employee for about 21 years. He
noted that he has worked throughout the state and at U.S. Army
Corps of Engineers headquarters in Washington, D.C., for various
periods of time, including in 2010-2012 to develop the 2012
Nationwide Permits for the Regulatory Community of Practice.
Mr. Casey then directed the committee's attention to his
presentation entitled "Building and Preserving Alaska's Future,
Regulatory Program Update" and paraphrased from slide 2 entitled
"Regulatory Program," which read [original punctuation
provided]:
Mission - Protect the Nation's aquatic resources, while allowing
reasonable development through fair, flexible and balanced
permit decisions.
4 Goals:
• Protect the aquatic environment
• Enhance regulatory program efficiency
• Make fair, reasonable, and timely decisions
• Achieve no net loss of aquatic resources
Authorities
• Section 10 Rivers and Harbors Act of 1899
• Section 404 Clean Water Act (1972)
• Section 103 Marine, Protection, Research and
Sanctuaries Act (1972)
The Corps Regulatory Program is neither a proponent or an
opponent of the projects we review for permits.
MR. CASEY explained that the Section 103 Marine, Protection,
Research and Sanctuaries Act allows the Department of the Army
to issue permits for the transportation of dredge materials when
they are to be dumped in the ocean, which would be waters beyond
the territorial seas. The aforementioned doesn't occur very
often in Alaska. He emphasized the need to keep in mind that
the regulatory program is a highly centralized agency in which
the district commander is the decision maker. He further
emphasized that the U.S. Army Corps of Engineers Regulatory
Program is neither a proponent nor an opponent of any of the
projects it reviews for permits. Referring to slide 3, he
informed the committee that the Regulatory Division in Alaska
has about a $7.9 million annual budget, which allows the
division to employ about 54 employees. Over the past nine
years, the division on average has analyzed over 1,500 projects
throughout Alaska. The Alaska District is headquartered on JBER
on the Elmendorf side and there are field offices in Fairbanks,
Juneau, Kenai, Anchorage, and there is staff in Sitka. Mr.
Casey then addressed the two main authorities that the division
administers on a daily basis. He paraphrased from slide 4
entitled "Rivers and Harbors Act," which read [original
punctuation provided]:
Section 10 authorizes the Department of the Army (DA)
is to issue permits for work in or affecting the
navigable waters of the United States
· For RHA purposes, navigable waters are:
• Waters subject to ebb and flow of the tide
and/or;
• Those waters that are presently used, or
have been used in the past, or may be
susceptible to use to transport interstate
or foreign commerce
· Activities that require a DA permit in Section 10
waters
• Structures and/or work in or affecting
navigable waters of the United States
• Structures and/or work outside the limits of
navigable waters, IF these structures or
work could affect the course, location, or
condition of the water body so as to impact
its navigable capacity
• Artificial islands, installations, or other
devices on the outer continental shelf
MR. CASEY then paraphrased from slide 5 entitled "Clean Water
Act (1972)," which read [original punctuation provided]:
Section 404 authorizes the DA to issue permits for the
discharge of dredge and/or fill material into waters
of the U.S.
· For CWA purposes, waters of the U.S. include
• All navigable waters (Section 10)
• Rivers, most tributaries and lakes
• Wetlands (like bogs, marshes, fens, swamps)
adjacent to the above waters
· Activities that require a DA permit in Section
404 waters
• Discharge of dredge and/or fill material
• Activities that have the "affect fill"
· "Adjacent" means "Boarding, contiguous, or
neighboring. Wetlands separated from other waters
of the United States by man-made dikes or
barriers, natural river berms, beach dunes and
the like are 'adjacent wetlands'."
9:01:41 AM
SENATOR FRENCH inquired as to which act gave the U.S. Army Corps
of Engineers jurisdiction over the permit for the bridge across
the Colville River into CD-5.
MR. CASEY answered that both Section 10, the Rivers and Harbors
Act of 1899, and Section 404, the Clean Water Act (1972),
provided jurisdiction as the placement of fill is regulated
under both acts. He explained that the Colville River is a
navigable water body and supports interstate commerce.
9:02:42 AM
MR. CASEY, continuing his presentation, directed attention to
the pie chart on slide 6 entitled "Permit Actions FY12." In
fiscal year 2012 (FY12) the division evaluated about 1,100
permit applications throughout the state. General permits are a
form of expedited permit review and about 62 percent of the
applications received qualify for general permit review.
Individual permits are for larger projects that have more of a
minimal impact on the aquatic environment and they take a bit
longer and involve more of a review process. He noted that
there are two independent decision making processes, including
the public interest review. The division can only issue a
permit if the public interest review finds the project is not
contrary to the public interest. Although there are 22 factors
that are considered for every project, not all factors apply to
the project as it's a case-by-case determination. A public
interest determination is also performed for projects that would
potentially qualify for a permit under Section 404. The EPA has
oversight over the Section 404 program, which includes
restrictions on discharges such that the U.S. Army Corps of
Engineers can only issue a permit for a proposal that has been
determined to be the least environmentally damaging practicable
alternative. The public interest review and the Section
404(b)(1) guidelines are utilized in the decision making process
for any of the permit types the U.S. Army Corps of Engineers
evaluates.
9:04:40 AM
CHAIR REINBOLD remarked that the division did a phenomenal job
with the permits, particularly with regard to the low number of
denials. She opined that the permit process seems to be a good
model.
MR. CASEY recalled that in FY11 there were two denials, but
didn't recall any denials in 2012. He noted that projects are
changed and modified to reduce the impacts on the aquatic
environment and other factors as they move through the process.
In further response to Chair Reinbold, Mr. Casey said that the
numbers [of permits awarded and denied] have been steady over
the years. He noted that the division follows the national
performance metrics and goals and is at a green status for most
of the metrics, including these two. He explained that [the
average number of processing days] is calculated from once the
application is complete to once a decision is made.
9:06:17 AM
MR. CASEY, returning to his presentation, paraphrased from slide
7 entitled "Section 404(g) of Clean Water Act," which read
[original punctuation provided]:
• EPA has the authority to delegate to a State or tribe
the administration of the Section 404 Program for
certain non-navigable waters. (40 CFR parts 232 and
233)
• Corps would retain jurisdiction for:
• Tidal waters and adjacent wetlands
• Navigable and adjacent wetlands
• Navigable waters under Section 10. These
include:
• Waters subject to ebb and flow of the
tide and/or;
• Those waters that are presently used,
or have been used in the past, or may
be susceptible to use to transport
interstate or foreign commerce.
MR. CASEY clarified that the tidal water and navigable waters
and the adjacent wetlands for both could not be assumed by a
state or a tribe. Furthermore, Section 10 of the Rivers and
Harbors Act does not have a primacy clause and thus the U.S.
Army Corps of Engineers would retain authority over that.
Moving on to slide 8, he related that the EPA has a process for
a state or tribe to assume the Section 404 program, which
includes public review. He pointed out that the U.S. Army Corps
of Engineers role is to provide information and data to the
parties involved. During the third week of March the division
will participate in a meeting with the EPA and the state
regarding the conversations the state is having about possible
assumption of the program.
MR. CASEY then turned to slide 9 entitled "Corps and State
Relationship" and discussed the regulatory relationship of the
U.S. Army Corps of Engineers and the state. He highlighted that
Section 401 of the Clean Water Act includes a check and balance
such that states have a role in the decision making process.
The requirement is such that the discharge or fill material into
the waters of the U.S. needs to be consistent with the state
water quality standards. In Alaska, the Department of
Environmental Conservation (DEC) administers the water quality
certification program, which is an independent decision making
process from that of the U.S. Army Corps of Engineers. If [DEC]
finds that the discharge doesn't meet state water quality
standards, it can deny the project. Even if the U.S. Army Corps
of Engineers decides to issue its permit, in such a situation it
would be invalid and the activity couldn't proceed. Therefore,
Section 401 provides a large voice and check and balance for
states and tribes. If the water quality certification includes
any conditions those are incorporated as special conditions on
the U.S. Army Corps of Engineers permit and the U.S. Army Corps
of Engineers would have enforcement authority over those state-
applied conditions. Administratively, when the U.S. Army Corps
of Engineers has a complete application for an individual permit
it is provided to DEC, and thus the applicant doesn't have to
fill out extra paperwork. The U.S. Army Corps of Engineers also
issues the state's public notice and is placed on the back of
the U.S. Army Corps of Engineers public notice for the proposal
for individual permits. The aforementioned results in the
public notice periods running concurrently between the federal
review and the state review. Such provisions have been in
effect in the state for a few decades. Mr. Casey noted that
there is some overlap between the regulatory program of the U.S.
Army Corps of Engineers and the Alaska Department of Fish & Game
(ADF&G) within the Division of Habitat regarding anadromous
streams and resident fish streams. Since anadromous streams and
resident fish streams are generally considered waters of the
U.S., there could be projects that require a permit from the
U.S. Army Corps of Engineers and the Division of Habitat since
both agencies regulate that activity in that water body. Where
waters of the U.S. occur in legislatively designated special
areas, such as critical habitat areas, an applicant would need a
permit from both the U.S. Army Corps of Engineers and the
Division of Habitat. He then moved on to slide 10, which
reviews the consultation relationship between the U.S. Army
Corps of Engineers and the state. Under the Fish and Wildlife
Coordination Act (FWCA) federal agencies are required to consult
with the state agency exercising administration over the
wildlife resources of the affected state. Because the state
agency exercising administration over the wildlife resources is
the expert, the comments the U.S. Army Corps of Engineers
receives from the FWCA are given full weight and consideration
in the U.S. Army Corps of Engineers permit decision making
process. These comments from the Fish and Wildlife Services or
the state agency may result in changing the project.
9:12:23 AM
CHAIR REINBOLD requested an example of a project that has been
impacted by the aforementioned.
MR. CASEY explained that because ADF&G has independent authority
to issue permits under the state statutes, they don't often act
as a commenting agency to the U.S. Army Corps of Engineers as it
has the tendency to make their decisions pre-decisional.
Therefore, the U.S. Army Corps of Engineers often receives more
comments under the FWCA from the U.S. Fish & Wildlife Services
than from the state. He recalled that the last project for
which the U.S. Army Corps of Engineers received comments from
the state was the interchange at Lake Palmer in Wasilla on the
Glenn and Parks Highway area.
9:13:42 AM
MR. CASEY, returning to slide 10, informed the committee that
the National Historical and Preservation Act is administered by
the State Historic Preservation Office (SHPO) within the
Department of Natural Resources (DNR). The intent of the act is
to minimize and mitigate impacts on historic properties. The
U.S. Army Corps of Engineers tries to ensure that the proposed
activity is compliant with the act, which requires consultation
with SHPO. The consultation with SHPO occurs frequently, he
said. The state allows the U.S. Army Corps of Engineers access
to its database of cultural resources throughout the state, and
thus the division can immediately review an application to
determine whether there is a known resource that could trigger
consultation.
9:15:07 AM
CHAIR REINBOLD, recalling her interaction with the U.S. Army
Corps of Engineers permitting, related that SHPO was the most
responsive entity as she had the requested information within 48
hours of the request. Therefore, she said she is very impressed
with the efficiency of SHPO.
9:15:25 AM
MR. CASEY, continuing his presentation, told the committee that
the U.S. Army Corps of Engineers doesn't make a permit decision
until the conclusion of the necessary consultation with SHPO.
Referring to slide 11 entitled "Regulatory Partnership Efforts,"
the U.S. Army Corps of Engineers strives to get the message out
about the regulatory program. For instance, he related that he
spent four hours yesterday at the Southeast Region for the
Department of Transportation & Public Facilities discussing
potential projects and expectations. Such partnering and
outreach is attempted as often as possible in order to establish
expectations and offer advice in order to avoid any surprises.
In conclusion, Mr. Casey stated that the division continually
strives to improve the regulatory program in terms of
communicating expectations to permit applicants while continuing
to value its long-term relationships with the state, and always
seek efficiencies in the permit decision making process.
9:17:56 AM
SENATOR FRENCH thanked Mr. Casey for his presentation.
9:18:16 AM
CHAIR REINBOLD thanked the presenters. She then related the
intent of the committee to monitor and keep Alaskans aware of
significant regulatory issues impacting the state.
9:18:45 AM
ADJOURNMENT
There being no further business before the committee, the
Administrative Regulation Review Committee meeting was adjourned
at 9:18 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ARR 2 28 ARRC Agenda.docx |
JARR 2/28/2013 8:30:00 AM |
Agenda |
| ARR Sam Batkins bio.docx |
JARR 2/28/2013 8:30:00 AM |
Sam Batkins Bio American Action Forum |
| ARR Am Action Batkins Presentation.pptx |
JARR 2/28/2013 8:30:00 AM |
PP Presentation Impact of Federal Regulation |
| ARR Dave Casey bio.doc |
JARR 2/28/2013 8:30:00 AM |
David Casey Bio |
| ARR Corps of Engineers - Legislative Briefing 2 28 13.pptx |
JARR 2/28/2013 8:30:00 AM |
PP David Casey |