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 Conservation 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 Department 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 Department 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 Division 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 Division 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 document 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 Division 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 a.m. CHAIRMAN WILLIAMS introduced Janice Adair, Assistant Commissioner and Legislative Liaison for the DEC. Mead Treadwell, Deputy Commissioner joined her at the committee table. JANICE ADAIR, ASSISTANT COMMISSIONER and LEGISLATIVE 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 cuts. 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 KIT BALLENTINE, ACTING DIRECTOR, DIVISION OF ENVIRONMENTAL 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 explained. 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 KEITH KELTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION 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 KURT FREDRIKSSON, DEPUTY DIRECTOR, DIVISION OF SPILL 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 MR. MENGE, DIRECTOR, DIVISION OF ENVIRONMENTAL QUALITY, 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 bill. 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 percent. 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 planning. 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 government. 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 situations. 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 $300,000. Number 510 REPRESENTATIVE HUDSON asked if any seafood or health inspections on offshore vessels or operations were being done. 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 grounds. 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 group. 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 time. 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. TRACI CRAMER, BUDGET ANALYST FOR THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, OFFICE OF MANAGEMENT AND BUDGET, 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 function. 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 Division. Number 244 REPRESENTATIVE HUDSON asked the Committee to filter questions through the House Resources Committee staff so all members receive the information. ANNOUNCEMENTS 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. ADJOURNMENT There being no further business to come before the committee, Chairman Williams adjourned the meeting at 9:50 a.m.