Legislature(2021 - 2022)ADAMS 519
03/24/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB281 || HB282 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 281 | TELECONFERENCED | |
| += | HB 282 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 33 | TELECONFERENCED | |
| += | HB 229 | TELECONFERENCED | |
| + | HB 265 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
March 24, 2022
9:08 a.m.
9:08:39 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 9:08 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Kelly Merrick, Co-Chair
Representative Dan Ortiz, Vice-Chair
Representative Ben Carpenter
Representative Bryce Edgmon
Representative DeLena Johnson
Representative Andy Josephson
Representative Bart LeBon
Representative Sara Rasmussen
Representative Steve Thompson
Representative Adam Wool
MEMBERS ABSENT
None
ALSO PRESENT
Alexei Painter, Director, Legislative Finance Division; Tom
Wright, Staff, Representative Steve Thompson;
Representative David Nelson.
PRESENT VIA TELECONFERENCE
Marie Marx, Legal Counsel, Legislative Legal Services; Lt
Paul Fussey, Alaska State Troopers, Department of Public
Safety; Jason Brune, Commissioner, Department of
Environmental Conservation.
SUMMARY
HB 281 APPROP: OPERATING BUDGET/LOANS/FUNDS
HB 281 was HEARD and HELD in committee for
further consideration.
HB 282 APPROP: MENTAL HEALTH BUDGET
HB 282 was HEARD and HELD in committee for
further consideration.
Co-Chair Foster reviewed the agenda for the meeting. The
committee would continue the amendment process on the
operating budget. He relayed the committee would pick up
where it left off the previous day.
HOUSE BILL NO. 281
"An Act making appropriations for the operating and
loan program expenses of state government and for
certain programs; capitalizing funds; amending
appropriations; making reappropriations; making
supplemental appropriations; making appropriations
under art. IX, sec. 17(c), Constitution of the State
of Alaska, from the constitutional budget reserve
fund; and providing for an effective date."
HOUSE BILL NO. 282
"An Act making appropriations for the operating and
capital expenses of the state's integrated
comprehensive mental health program; making capital
appropriations and supplemental appropriations; and
providing for an effective date."
9:08:52 AM
^AMENDMENTS
9:08:53 AM
Vice-Chair Ortiz shared that his staff Caroline Hamp had
her baby early that morning.
9:09:32 AM
Representative Thompson began addressing the topic of
Amendment L12 Replacement [note: the amendment had been
offered in the meeting the previous afternoon and had been
held over to get more information. See minutes dated March
23, 2022, 1:41 p.m. for the full amendment]. He explained
his desire to follow the law. He detailed there were a
myriad of bonuses put in the budget unbeknownst to
everyone. His goal was to address the issue. He shared that
overnight his office had received 71 additional letters of
agreement that the legislature had not seen [note: a
subsequent correction was made that the document itself was
72 pages and did not contain 71 additional letters of
agreement]. He emphasized that it was by law that the
letters of agreement had to be presented to the legislature
within 60 days of gaveling into session. He requested to
ask a question of Legislative Finance Division Director
Alexei Painter. He asked if Mr. Painter was aware of
anything in the background documents of any appropriation
bill that funded the bonuses at issue. He referenced bullet
point II of an attorney general opinion [letter from the
Department of Law dated March 23, 2022 related to bonuses
for executive branch employees (copy on file)]. He asked if
Mr. Painter was aware of retroactive funding.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
answered that he was aware of a single item for bonuses
within the Department of Transportation and Public
Facilities (DOT). He believed it was mission critical
incentive pay for certain locations. He relayed the item
was a supplemental appropriation included in the committee
substitute (CS). The Legislative Finance Division (LFD) did
not receive any other related supplemental language.
Representative Thompson asked for verification that the
letters were supposed to be given to the legislature by
law.
Mr. Painter replied that it was his understanding, but he
deferred to Legislative Legal Services.
Representative Thompson stated that many of the letters of
agreement at hand did not deal with bonuses, most dealt
with overtime and other items that were not of interest. He
listed individuals available for questions.
9:12:30 AM
Representative Carpenter did not have the documents being
referenced by Representative Thompson including an attorney
general opinion or letters of agreement. He requested the
information.
Co-Chair Foster asked to hear from Tom Wright, staff to
Representative Thompson.
TOM WRIGHT, STAFF, REPRESENTATIVE STEVE THOMPSON, relayed
that he had received a document via email from Office of
Management and Budget Director Neil Steininger the previous
night. He clarified that the document did not contain 71
additional letters of agreement, it was 72 pages. He shared
that at a quick glance he did not find any the committee
was trying to address related to bonuses, retention
bonuses, and financial incentives. He remarked that the
conversation did not pertain to overtime. He pointed to
lines 8 and 9 on page 1 [of Amendment L12 Replacement] and
suggested the removal of the words "and other monetary
terms" to clarify the amendment pertained to bonuses and
financial incentives such as retention bonuses.
Co-Chair Foster asked if the amendment sponsor wanted to
hear from Mr. Steininger or introduce a conceptual
amendment.
Representative Thompson stated he would like to move in
that direction.
Co-Chair Foster asked Representative Thompson to restate
Mr. Wright's suggestion regarding the removal of language
from the amendment.
Mr. Wright pointed to page 1, lines 8 and 9 and suggested
the updated amendment language would read: "implement the
payment of bonuses and/or financial incentives of the
following agreements for the fiscal year ending June 30,
2023."
Representative Thompson explained the change would remove
the words "monetary terms of the following agreements."
Co-Chair Foster asked if Representative Thompson was
proposing a conceptual amendment to remove the words.
Representative Thompson wanted to remove "and other
monetary terms."
Co-Chair Foster clarified conceptual Amendment 1 [to
Amendment L12 Replacement] would remove the language "and
other monetary terms" from page 1, lines 8 and 9.
Representative Josephson OBJECTED for discussion. He had
heard different conceptual amendment language from
Representative Thompson and Mr. Wright.
Co-Chair Foster believed Representative Thompson had just
been reading the entire sentence. He asked Mr. Wright for
clarification.
Mr. Wright answered that he had not had the chance to
discuss the issue with Representative Thompson that
morning. He had spoken with Marie Marx, Legal Counsel with
Legislative Legal Services that morning who had suggested
that the removal of "and other monetary terms" would
further clarify the goal of the amendment [Amendment L12
Replacement].
9:16:41 AM
Co-Chair Foster clarified his understanding of the
conceptual amendment, which would strike "and other
monetary terms" from lines 8 and 9.
Mr. Wright agreed.
Representative Josephson highlighted the lengthy amount of
time the committee spent on the amendment in two separate
meetings the previous day. He stated the time spent on the
amendment was approaching about 1.5 hours. He characterized
the amendment as a moving goal post. He stated there were
conflicting legal opinions on the topic. Additionally, the
committee was trying to adopt a reform in the budget that
he guessed had never been discussed by the legislature. He
stated that it would take him another couple of hours to
vet the amendment. He would prefer to just call the
question on the amendment.
Co-Chair Foster highlighted the conceptual amendment
currently before the committee.
Representative Josephson WITHDREW his OBJECTION to
conceptual Amendment 1 to Amendment L12 Replacement. There
being NO further OBJECTION, conceptual Amendment 1 to
Amendment L12 Replacement was ADOPTED.
9:18:18 AM
Representative Wool agreed with Representative Josephson.
He stated that the committee had begun addressing Amendment
L12 Replacement the previous day. He recalled that Mr.
Steininger had stated the previous day that he was
anticipating new information sometime between the prior
evening and the current morning. He stated there were
conflicting legal opinions. He remarked that they all
wanted to follow the law. He considered that perhaps the
law under discussion had not been followed. He highlighted
that the law on senior citizen property tax was not
followed. He asked if the committee was going to offer an
amendment on that issue. He knew many municipalities would
love to get the money. He did not want to go down the
"follow the law rabbit hole" because there were other laws
that were not followed. He stated that bonuses had been
included in previous budgets and had been paid. He
considered that perhaps the issue was something to hash out
at a later date. He had not seen the 71 pages that came in
overnight [referenced by Representative Thompson and Mr.
Wright].
Representative Edgmon CALLED the QUESTION on Amendment L12
Replacement as amended.
Representative Carpenter OBJECTED.
9:19:55 AM
AT EASE
9:20:56 AM
RECONVENED
Representative Edgmon WITHDREW his motion to call the
question.
Representative Carpenter stated that they wrapped up the
meeting the previous day with a question he had posed about
whether the underlying CS was following the law without the
amendment. He directed the question to Legislative Legal
Services.
MARIE MARX, LEGAL COUNSEL, LEGISLATIVE LEGAL SERVICES (via
teleconference), answered that one of the services offered
by Legislative Legal was to identify issues and concerns to
help the legislature make informed decisions. Her memo had
identified legal issues with the existing CS. She had
opined on the way to proceed that had the least risk of
litigation; however, it was up to the legislature to decide
whether to proceed. She stated that some ways of moving
forward had an increased risk of litigation.
Ms. Marx communicated her opinion that the letters of
agreement for union employees should be clearly referenced
in the budget in terms of the legislature's intent to fund
the items. She believed the comments by Mr. Painter during
the current meeting showed there was nothing in the
background documents or CS showing that the legislature was
funding the union letters of agreement. She stated that for
non-union employees whose salary was based in statute, it
would take a substantive bill to allow the departments to
pay out bonuses. She stated that historically there was an
appropriation bill and a companion substantive bill
authorizing departments to pay the bonuses. She stated
there was no related provision in the current CS. She
thought there was some risk that a person would sue and say
public money was spent improperly; however, she did not
believe it was a high risk. Her primary concern was that
the legislature would continue to be left in the dark
regarding future letters of agreement and bonus payments
and that it would frustrate the legislature's power of
appropriation.
Representative Carpenter opposed taking action to keep the
CS at odds with Legislative Legal opinion.
9:25:00 AM
Representative Thompson provided wrap up on Amendment L12
Replacement as amended. He relayed that his office had
discovered that millions of dollars in bonuses were being
paid out but had not been identified to the legislature. He
wanted to ensure the state was not spending millions of
dollars in bonuses that the legislature was unaware of. He
brought the issue forward to ensure the laws were being
followed. He stated the legislature was the appropriating
body and did not seem to be aware how much the state was
spending on bonuses had not been identified [to the
legislature] and approved [by the legislature]. His office
had found that many of the bonuses were being paid by
taking money from a vacant funded position. He did not
believe the practice was correct. The goal of the amendment
was to ensure laws were followed and that future letters of
agreement were identified to the legislature within 60 days
of a new session.
Mr. Wright clarified that the numbers section was still
part of the amendment.
9:27:12 AM
AT EASE
9:38:32 AM
RECONVENED
Co-Chair Foster clarified that conceptual Amendment 1 had
been adopted.
Representative Josephson MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Rasmussen, Thompson, Carpenter, Johnson, LeBon
OPPOSED: Josephson, Wool, Edgmon, Ortiz, Merrick, Foster
The MOTION to adopt Amendment L12 Replacement as amended
FAILED (5/6).
Co-Chair Foster stated the language section amendments had
been completed. He stated there was another amendment by
Representative Johnson related to the previous topic.
Representative Johnson WITHDREW Amendment H LAW 1 (copy on
file).
9:40:54 AM
Representative Rasmussen MOVED to ADOPT Amendment DNR A
Replacement (copy on file):
Department: Department of Natural Resources
Appropriation: Parks and Outdoor Recreation
Allocation: Pars Management and Access
Delete: ($2,150.0) Vehicle Rental Tax 1200
Add: $2,150.0 General Fund Program Receipts 1005
Add Intent: It is the intent of the legislature that
the Alaska State Parks System increase user fees to
offset reductions in Vehicle Rental Tax funding.
Explanation: Vehicle Rental Tax funding is subject to
the reverse sweep. By increasing user fees, this
removes the uncertainty of whether funding would be
available and enables the Park System to become more
self-sufficient. If DNR isn't able to make up that
GF/PR amount in time by raising fees, a supplemental
request may be necessary.
Representative Wool OBJECTED for discussion.
Representative Rasmussen explained the amendment increased
the program receipt authority to look at updating some of
the fees for park usage. She elaborated that in comparison
to other states, Alaska's park fees were very low. The
Department of Natural Resources (DNR) finance subcommittee
had learned that the cost of public use cabins had
increased from approximately $100,000 to $150,000. She
highlighted the increasing cost of gas and fees associated
with rising inflation. She thought it seemed like a natural
time to make the increase to help the park system to become
more self-reliant.
Representative Rasmussen elaborated that the amendment
would add $2,150,000 to program receipts, which reflected
roughly 50 percent of the revenue the division brought in
in FY 21. The division was on pace to collect $200,000 more
from the same period of July to January for FY 22. She
explained the amendment would decrease the use of the
vehicle rental tax by the same amount. She believed it was
an area to allow parks to become self-sufficient and rely
less on state general funds.
9:43:23 AM
Representative Wool asked if the vehicle rental tax fund
was swept. He stated that the amendment would increase park
user fees. He stated it was a policy call to increase the
rate at campgrounds and such.
Mr. Painter clarified that the vehicle rental tax account
was not a fund, it was an account. He explained that funds
received revenue and had expenditures posted to them. In
the current case, there was revenue identified as vehicle
rental tax revenue and expenditures identified as vehicle
rental tax expenditures. However, the revenue and
expenditures were not really the same money necessarily
because it was all part of the General Fund. He elaborated
that fund code 1200 identified revenue coming in as vehicle
rental tax and expenditures going out; however, there was
not a fund to hold the money in; therefore, the reverse
sweep did not really play into the situation. There was not
an account balance. He believed LFD had been portraying
vehicle rental tax as a fund in the past, but as more
research was done into the sweep, LFD found there should
not be an account balance. Statute specified the
legislature may appropriate the annual balance of the
vehicle rental tax at the end of the year. The legislature
had been appropriating the funds on a lag where the
previous year's revenue was appropriated the following
year. The governor's proposed FY 23 budget switched from
funding prospectively to appropriating revenue as it came
in. Regardless, there was not really a fund balance the
sweep would impact; therefore, the sweep did not really
have an impact because there was no fund.
9:46:17 AM
Representative Wool stated his takeaway that it was not a
swept fund. He stated his understanding that vehicle rental
tax came in and went out and did not sit in a fund
available for sweeping at the end of the year. He remarked
that vehicle rental tax had been used for tourism
promotion, parks, and DOT. He believed the usage was at the
discretion of the legislature. He did not understand the
idea of the amendment to help the park system become more
self-sufficient. He stated that the Division of Motor
Vehicles (DMV) was self-sufficient because it brought in
enough money to fund itself. Other agencies such as the
Alaska Marine Highway System (AMHS) and the University of
Alaska were not self-sufficient. He did not know about the
parks and did not support raising rates "willy nilly." He
did not understand or support the amendment.
Representative Rasmussen relayed that park fees had not
been increased since FY 18 or FY 19. She informed committee
members there were several parts of the state that
currently did not pay any usage for their park maintenance.
She believed there should be no disparity across the state
as far as certain communities paying fees for their parking
lots, while others did not. She pointed out that the state
was required to provide funding for the University. She
remarked that AMHS was transportation. She stated that
public money had to go to some of the programs, but the
state did not have to fund parks. She believed parks added
a very valuable component to communities and the overall
quality of life in Alaska. She would hate to see having to
cut a large amount from parks forcing them to close in the
future. She supported gradually increasing park fees. She
stated it had been over five years since fees had been
increased and the department had not resumed assessing fees
across the state. She supported collecting a bit more
revenue. She stated that a parking fee increase by a couple
of dollars was pretty insignificant. She stated raising
parking fees by 50 percent to a fee of $7 or $8 was not a
major burden on any individual Alaskan. She pointed out
that tourists used state parks and public use cabins. She
reasoned it was another area to capitalize a bit more on
tourism. She highlighted if there was $2 million more
available for the vehicle rental tax, it was $2 million
more that could go to roads or advertising for more
tourism.
Representative Carpenter asked if the issue had been
discussed in another committee. He asked if the public had
a chance to weigh in. He understood that the decision was
in the legislature's purview, but he thought it appeared to
be a larger policy call.
Representative Rasmussen answered the authority had been
raised about four or five years back. She stated that none
of the fees met the maximum fee that could be charged. She
stated it had gone through a process and a fee increase was
allowable, but the department had not done so. She thought
the amendment was the only way she could see for the
legislature to communicate it wanted parks to be funded but
wanting eventually to preserve parks through self-reliance.
9:51:12 AM
Representative Carpenter asked for verification that the
topic had not been discussed in the current legislature in
any other committees.
Representative Rasmussen shook her head no.
Vice-Chair Ortiz recognized it was likely a good thing for
parks to become more self-sufficient; however, he thought
the policy was worthy of discussion. He highlighted that
when talking about public parks it was necessary to have
policy discussion about whether raising fees would limit
access to the parks for certain segments of the population.
He believed it was worthy of discussion. He was uncertain
how he felt about the amendment.
Representative Wool remarked on Representative Rasmussen's
suggestion of raising parking fees 50 percent. He
highlighted that the topic had not been discussed in
subcommittee with the department. He used camping at a
campground where he had noticed fees had increased over the
years. He used a hypothetical example and stated that if
the current fee was $20 it would increase to $30. He
stressed it was a large increase, especially if someone was
camping for 10 nights. He did not really understand the
reasoning. He stated that the vehicle rental tax that had
been used partially for parks would be freed up to do
something else. He stated they did not know which rates
would go up and where; there had not been an analysis of
what the parks wanted. He did not think parks wanted to
raise prices too high. He stated that part of the quality
of life in Alaska was being able to camp and use trails,
some of which was funded with public money. He stated that
when a tourist came to Alaska and spent money on a rental
car money came to the state and they may go camping and
park at a park, which brought in more money. He did not
think enough work had been done. He stated it seemed to be
an arbitrary removal of the funds.
9:54:05 AM
Co-Chair Merrick had chaired the subcommittee. She stated
there had been some discussion in the subcommittee about
the topic. She stressed that the parks had seen a
significant increase in usage during the pandemic. She
highlighted an increased need in garbage clean up and
facility maintenance on toilets and other things. The
department had told the subcommittee that people wait up to
rent cabins as soon as they became available online at
midnight. She added that the cost of building the cabins
had increased significantly. The hope was for more cabins
to be built due to the high demand. She was an avid user of
the parks and personally bought an annual parking pass
through DNR.
Representative Edgmon stated that every time he put his
boat in the water, he had to pay a fee. He was concerned
about the open-endedness of the amendment. He remarked that
the fee was pretty modest and not egregious. He was
concerned that the topic had not been thoroughly vetted. He
highlighted that the amendment pertained to $2.1 million in
taxes. He thought the proposal should have gone through the
subcommittee process or a separate bill. He recalled that
around 2018 the Division of Parks had come forward with a
goal to be self-sufficient with no undesignated general
fund (UGF) revenue. The idea was the funding would be based
on fees and other assessments. He did not know what had
happened to the idea. He could not support the amendment
because he did not have enough information to make the
decision.
Representative Thompson had not followed things taking
place with DNR and parks, but a notification letter had
gone out from the division director announcing the closure
of the Chena campground and boat launch by University
Avenue in Fairbanks. He explained the site was one of the
few places tourists driving motor homes or trailers could
use for a fee. He had personally used the area and noted it
was always full. He emphasized that tourists would not have
a place to park or camp in Fairbanks. He informed the
committee that the boat launch was used by many locals. He
hated to see the closure take place. He did not know the
answer or whether the amendment would help or not. He was
disappointed a well-used boat launch and campground in
Fairbanks would be closed.
Representative Wool had been disappointed to hear about the
closure of the location in Fairbanks as well. He had heard
in the news the location was closing due to unsavory
behavior occurring in the park after hours. He stated that
the approach had been to close the park in response to the
activity. He did not support the approach. He stated it was
not a funding issue. He referenced funding and increased
use of cabins and increased cost. He did not support the
deletion of one of the funding sources currently going to
parks. He noted there was a bill going through the Senate
that would increase vehicle rental tax revenue. He
suggested perhaps some of that revenue could go towards the
cabins.
9:59:47 AM
Representative Josephson surmised the amendment would make
the vehicle rental tax account $2.1 million richer and the
General Fund $2.1 million poorer. He asked if the statement
was accurate.
Mr. Painter replied that the amendment proposed to use
program receipts and would not impact the General Fund
assuming there was added fee revenue to back that up. The
amendment would decrease vehicle rental tax usage and
whether that amount would be available or not depended on
one's interpretation of how the fund was supposed to be
used.
Representative Josephson asked what would become of the
funds if the amendment passed.
Mr. Painter answered that the funds could be appropriated
for another purpose; however, the governor's budget spent
based on current year revenue and the statute specified the
state should spend previous year's revenue. He explained
that because of the pandemic, prior year revenue was lower
than projections for future revenue. He elaborated that if
the statutory guidance was followed, there would not be
additional revenue to spend, whereas, not following
statutory guidance and going with current year revenue,
there was an additional $2.15 million. He stated it was a
policy call.
Representative Rasmussen provided wrap up on Amendment DNR
A Replacement. She highlighted parking fees in other states
compared to the $5 charged in Alaska. She shared that
Colorado charged $10 per vehicle for parking, Utah charged
$10 per vehicle and one park in Utah charged a $10 per
person head charge. She stated that private campgrounds in
Alaska cost $80 to $100 per night, while the parks
campgrounds charged $20 per night. She highlighted that it
was not reasonable to expect the current level of services
could be maintained when financial times became hard. She
emphasized that the current high oil prices would not
continue forever.
Representative Rasmussen wanted to ensure the state was
keeping up with the times. She thought gradually increasing
the fees was easier for the public to accept than an abrupt
increase. The maximum the state could charge was $10
[daily] and $200 annually, but the state was currently
charging $60 for the annual fee. The maximum authority for
the boat launch fee was $50 and the state was currently
charging $20. Parks were allowed to charge $60 per night
for camping and the current fee was $20. Additionally,
parks could charge $200 for cabins per night and the
current charge was $100. She stated the amendment would
give DNR flexibility to leverage higher fees. She asked for
members' support to try to keep parks more sustainable.
10:03:36 AM
Representative Wool MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Rasmussen, Thompson, Merrick
OPPOSED: Wool, Carpenter, Edgmon, Johnson, Josephson,
LeBon, Ortiz, Foster
The MOTION to adopt Amendment DNR A Replacement FAILED
(3/8).
10:04:31 AM
Co-Chair Foster directed members to the supplemental
capital amendment packet (copy on file).
Representative Johnson MOVED to ADOPT Amendment
Supplemental Capital 1, 32-GH2686\R.1 (Marx, 3/16/22) (copy
on file):
Page 71, following line 18:
Insert a new subsection to read:
"(c) The amount of the fees collected under AS
28.10.421(d) during the fiscal years ending June 30,
2022, and June 30, 2023, for the issuance of National
Rifle Association license plates, less the cost of
issuing the license plates, estimated to be $18,708,
is appropriated from the general fund to the
Department of Commerce, Community and Economic
Development for payment as a grant under AS 37.05.316
to the Alaska SCTP, nonprofit corporation, for
maintenance of scholastic clay target programs and
other youth shooting programs, including travel
budgets to compete in national collegiate competitions
for the fiscal years ending June 30, 2022, and June
30, 2023."
Representative Josephson OBJECTED for discussion.
Representative Johnson explained that the amendment was
done almost annually. She detailed that it would
appropriate money from the National Rifle Association (NRA)
license plate into the Alaska Scholastic Clay Target
Program (SCTP). She elaborated that the Alaska SCTP managed
numerous shooting programs including district sanctioned
high school clay target sports clubs and lettering ability
with teams in Fairbanks, Mat-Su, Anchorage, Chugiak,
Soldotna, Haines, Juneau, Sitka, Ketchikan, and Petersburg.
Alaska SCTP had been instrumental in getting the NRA
license plates issued and available to all Alaskans. She
relayed that AS 28.10.421(d) allowed the appropriation of
any fund balances in excess of the cost of issuing the
plates. The estimated balance was $9,450.20. The amendment
enabled distribution for two years, which would bring the
distribution in line with the other license plate
disbursements in the budget, which had been suggested by
Legislative Legal Services. The amendment would appropriate
the balance of the Alaska SCTP for the maintenance of the
scholastic clay target programs and other youth shooting
programs; it included travel costs to national collegiate
competitions. The legislature had appropriated other like-
fund balances to other entities in the bill.
10:06:55 AM
Representative Carpenter was unfamiliar with the Alaska
SCTP program. He asked if the programs ran in multiple
locations or one location.
Representative Johnson replied that she was not an expert,
but she did not recall certain ranges in particular. There
were a variety of places throughout practicing locations.
Representative Josephson WITHDREW the OBJECTION. There
being NO further OBJECTION, Amendment Supplemental Capital
1 was ADOPTED.
10:07:58 AM
Co-Chair Foster relayed there had been duplicate amendments
related to oil tax credits in members' packets. He noted
that Representative Rasmussen's amendment had passed
previously. He relayed that Representative Josephson was
the sponsor of the other amendment.
Representative Josephson WITHDREW Amendment AA3, 32-
GH2686\R.23 (Marx, 3/18/22) (copy on file).
Co-Chair Foster clarified the amendment number for the
record. He reviewed the remaining amendments.
10:09:58 AM
AT EASE
10:10:40 AM
RECONVENED
Representative Wool WITHDREW Amendments H DOA 1 and H DOA 2
related to public broadcasting.
10:11:30 AM
Co-Chair Foster directed members to the capital amendment
packet.
Representative Johnson MOVED to ADOPT Amendment Capital 1
(copy on file):
DEPARTMENT: Commerce
PROGRAM: Grants to Named Recipients
PROJECT TITLE: Alaska Search and Rescue Association
ADD: $294.3 UGF 1004
EXPLANATION: Grant to Alaska Search and Rescue
Association (ASARA) to train volunteer search and
rescue personnel within its organization, such as
Village and other recognized organizations. The Alaska
Search and Rescue Volunteers have not received any
other State of Alaska grants or training funding since
2014.
Co-Chair Merrick OBJECTED for discussion.
Representative Johnson explained the amendment that would
add grant funding of $294,300 to the Alaska Search and
Rescue Association. She noted that someone from the
troopers should be available online to answer questions.
She noted the association was a volunteer organization that
worked with rescue dogs. The organization had not received
any other state grant funds since 2014. She detailed that
the organizations worked primarily at the request of the
Alaska State Troopers. The amendment would help fund 25
dogs for the organization. She noted that the specialized
group would get $129,000. She provided some examples of
training including initial incident response, search and
rescue academy, first aid training, CPR, avalanche rescue,
and canine training. The grant would go through the
Department of Commerce, Community and Economic Development.
She stated the grant was not uncommon, but it had not been
funded in the past few years. She highlighted that the
volunteers had not discontinued their work even without
funding. She elaborated that the organizations received
funding when on an active search and rescue mission, but
they did not receive any state funding at any other time.
She was available for any questions.
10:15:29 AM
Co-Chair Merrick remarked that several people had asked her
about the capital budget item in the operating budget. She
clarified that the CS for HB 281 had "capital
appropriations" in the bill title; the item would be a
capital appropriation in the operating budget. She
supported the item.
Co-Chair Merrick WITHDREW the OBJECTION.
Vice-Chair Ortiz OBJECTED for discussion.
Vice-Chair Ortiz observed that one of his communities was a
part of the organization, but another of his communities
had an active search and rescue program and was not on the
list. He asked why some groups may choose to join the
organization and others did not.
Representative Johnson replied that she did not have the
information. She stated the funding was for the Alaska
Search and Rescue Association. She did not know why some
groups chose to join and others did not. She added that the
members she knew had a close relationship with the troopers
and worked to be called out by the State of Alaska and were
not really independent of the state.
Vice-Chair Ortiz WITHDREW the OBJECTION.
Representative LeBon remarked that the association was the
ground-based version of the Civil Air Patrol. He could
imagine a coordinated activity between the two entities.
He noted that the amendment seemed to have a very specific
dollar amount. He asked if it was formula driven.
10:18:06 AM
Representative Johnson answered that it was not formula
driven, but it was for a specific project. The project
would include basic search and rescue for villages and
village members at about $165,000. She elaborated that
$129,300 was for specialized search and rescue training for
canine and avalanche. She had the information broken out by
organization and could provide it if members were
interested.
Representative Carpenter was curious how the balance of the
general funds was distributed among the 22 members.
Representative Johnson offered to have copies made of the
list for members.
10:19:27 AM
AT EASE
10:22:51 AM
RECONVENED
Co-Chair Foster invited the Alaska State Troopers to answer
questions.
LT PAUL FUSSEY, ALASKA STATE TROOPERS, DEPARTMENT OF PUBLIC
SAFETY (via teleconference), introduced himself.
10:23:35 AM
Representative Johnson restated a question by Vice-Chair
Ortiz and asked Mr. Fussey to respond.
Mr. Fussey answered that Alaska Search and Rescue
Association members paid to join and it was up to
individual groups to decide whether to join. He could not
speak for each group as to why they chose not to join.
Representative Johnson remarked that the membership list
was long, and she did not believe her list was exhaustive.
She asked if Mr. Fussey knew how many organizations were on
the list.
Mr. Fussey replied in the negative.
Representative Carpenter asked about the value was of being
on the list. He asked if it indicated to the troopers, as
coordinators, that a group was located in a specific area
and willing to assist in search and rescue.
Mr. Fussey answered that he reached out to and asked for
help from different groups and organizations that were not
Alaska Search and Rescue Association members. He explained
that joining the association gave members access to
training and the National Search and Rescue Association.
Representative Carpenter asked for the cost to join the
organization.
Mr. Fussey replied that he did not have the information.
10:25:33 AM
Vice-Chair Ortiz referenced a backup document associated
with the amendment (copy on file) that specified there were
approximately 25 certified and deployable canines in the
state. He asked if there was any connection between the
organizations having access or using dogs in their search
and rescue versus areas without access to dogs.
Mr. Fussey replied that the different search canine groups
were deployable around the state. He explained that if they
were located in Southeast, Fairbanks, Kodiak, or
Southcentral, the dog teams were deployable around the
entire state for different search and rescue associations.
He expounded that the dogs had been taken to searches in
Unalaska, Kotzebue, and other locations around the state.
Representative Johnson provided wrap up on the amendment.
She quoted from the Alaska State Troopers annual report: "
"With a commissioned count of less than 300 troopers,
AST depends heavily upon the professional volunteer
search and rescue organizations. There are roughly 48
volunteer organizations statewide. These volunteers
drop what they are doing to answer the call for help
that often interrupts regular - day jobs and family
life."
Representative Johnson relayed that the amendment request
equated to approximately $100 per volunteer per year in
training. He found it to be one of the least expensive,
best returns for the state's money. She shared there were
plenty of avalanches around Hatcher Pass and there were
emergencies that took place all throughout the state that
could not always be serviced by troopers.
Vice-Chair Ortiz WITHDREW the OBJECTION.
Representative Carpenter OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Thompson, Wool, Edgmon, Johnson, Josephson,
LeBon, Ortiz, Rasmussen, Merrick, Foster
OPPOSED: Carpenter
The MOTION PASSED (10/1). There being NO further OBJECTION,
Amendment Capital 1 was ADOPTED.
10:29:04 AM
Representative Josephson WITHDREW Amendment H DOA A related
to bonuses for the Public Defender Agency and Office of
Public Advocacy.
Co-Chair Foster directed members to the additional
amendments packet.
Representative Josephson MOVED to ADOPT Amendment H FCS 1
(copy on file):
H FCS 1
Family and Community Services
Juvenile Justice
This amendment restores three positions that supervise
and teach anger management skills to at-risk children
from across Alaska who are enrolled in the Anchorage
School District Step-Up program. Step Up provides an
academic option for students who are expelled or long-
term suspended from ASD for aggressive behaviors such
as fighting, assault and weapons offenses. To maintain
the Step-Up program after these state positions were
cut in FY22, ASD diverted funds from a grant that was
intended for training district staff in nonviolent
crisis intervention, school safety and suicide
prevention. That grant will expire at the end of FY22.
1004 Gen Fund (UGF) 336.4
Representative LeBon OBJECTED.
Representative Josephson explained the amendment with a
prepared statement:
The amendment restores the state contribution to
operation of the Step-Up program, which is an
educational program for teenagers who have been
expelled or long-term suspended for aggressive
behavior such as fighting, assault, and weapons
offences. The nature of these students' behavioral
issues and the likelihood they would eventually end up
in the juvenile justice system or the adult
correctional system without a program like Step-Up are
the reason the Division of Juvenile Justice
traditionally shared a portion of program costs with
the Anchorage School District. The state assisted with
the lease for space where the program is located, and
the Division of Juvenile Justice provided three staff
to supervise and to teach anger management skills. In
FY 22, these three positions were eliminated from the
department budget. To continue Step-Up for the current
school year, the school district had to divert funds
from a grant intended to train district staff in
nonviolent crisis intervention, school safety, and
suicide prevention. That grant will expire at the end
of FY 22. This amendment continues the pattern of the
state sharing the cost of Step-Up program intervention
and the negative trajectory of these teenagers' lives.
10:32:27 AM
Representative LeBon referenced language in the amendment
that it applied to at-risk children from across Alaska who
are enrolled in the Anchorage School District (ASD) Step-Up
program. He asked if there could be Fairbanks School
District students enrolled in the program.
Representative Josephson answered that there could be if
the youths were in the custody of Juvenile Justice and
housed in Anchorage. He cited the McLaughlin Youth Center
as an example.
Representative LeBon asked for verification that the
program was not embedded in the ASD and the clientele was
in a juvenile detention center.
Representative Josephson answered that Step-Up was largely
an ASD program, but kids in trouble often ended up in
Anchorage.
Representative LeBon asked if the ASD paid for a portion of
the program in its budget.
Representative Josephson answered affirmatively. He
explained that ASD had to shift funds to cover its "skin in
the game." The amendment was designed to restore the
state's share. He stated that essentially the municipality
would still be a participant in the program.
10:35:12 AM
Vice-Chair Ortiz asked for verification that the Step-Up
program was not offered anywhere other than Anchorage.
Representative Josephson believed that was correct. He
clarified that ASD's portion of the cost went to the
payment of teachers in the program.
Representative LeBon MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Rasmussen, Merrick, Foster
OPPOSED: Carpenter, Johnson, Thompson, LeBon, Wool
The MOTION to adopt Amendment H FCS 1 FAILED (5/5).
Representative Edgmon was absent from the vote.
[Note: the motion on the amendment was subsequently
rescinded and the amendment was adopted at approximately
10:48 a.m.]
10:37:11 AM
AT EASE
10:47:00 AM
RECONVENED
Co-Chair Foster noted there were some time constraints for
members.
Representative Josephson MOVED to RESCIND action Amendment
H FCS 1.
There being NO OBJECTION, it was so ordered.
Representative Josephson MOVED to ADOPT Amendment H FCS 1
(copy on file) [see 10:29 a.m. for amendment detail].
Co-Chair Merrick OBJECTED for discussion.
Representative Josephson reread his statement about the
Step-Up program.
Co-Chair Merrick WITHDREW her OBJECTION.
Representative LeBon OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Edgmon, Ortiz, Josephson, Rasmussen, Wool,
Merrick, Foster
OPPOSED: Carpenter, Johnson, LeBon, Thompson
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment H FCS 1 was ADOPTED.
10:50:45 AM
Representative Rasmussen requested to address Amendment H
DEC 1.
10:51:00 AM
AT EASE
10:51:12 AM
RECONVENED
Co-Chair Foster directed members to the numbers section
amendment packet (copy on file).
Representative Rasmussen MOVED to ADOPT Amendment H DEC 1
(copy on file):
H DEC 1
Environmental Health
Assume Primacy of Hazardous Waste Management Under
Resource Conservation and Recovery Act, Subtitle C
Offered by Representatives Rasmussen and LeBon
The Alaska Department of Environmental Conservation
(DEC) will assume primacy to operate a Resource
Conservation and Recovery Act (RCRA) Subtitle C
program within its Environmental Health division as a
section of the Solid Waste Management program. DEC
already manages RCRA Subtitle D in Alaska. The
Subtitle C program will include permitting of
treatment, storage, and disposal facilities,
inspections of facilities that generate hazardous
waste, data collection and reporting, tracking
hazardous waste generation in Alaska, compliance
assistance, and corrective action management.
RCRA Subtitle C includes requirements related to
hazardous waste management covering facilities that
generate hazardous waste, transporters, treatment
facilities, storage facilities, disposal facilities,
and used oil handlers.
Alaskans will benefit from in-state management of this
program as DEC staff will be able to provide a
significantly greater level of technical and
compliance assistance to facilities in the public and
private sector that generate hazardous waste than is
currently provided by the EPA. This assistance will
better prevent the mishandling of hazardous waste thus
protecting public health and Alaska's environment.
1004 Gen Fund (UGF) 830.0
Vice-Chair Ortiz OBJECTED.
Representative Rasmussen explained that the amendment would
allow the Department of Environmental Conservation (DEC) to
assume primacy over the Solid Waste Management Program. She
relayed that DEC already managed the Resource Conservation
and Recovery Act (RCRA) Subtitle D in Alaska. The amendment
would add the state's management of Subtitle C. She
reviewed information in the amendment explanation above.
The amendment had been brought forward by the
administration and was supported by AGC [Association of
General Contractors] and several other industry groups who
believe permit streamlining and increased local control at
the state level would assist their industries.
10:53:07 AM
Representative Josephson was told that most states had
primacy over hazardous and nonhazardous substances;
however, he believed he would vote against the amendment.
He was very concerned about DEC as a department. He
discussed that a past long-term SPAR director had resigned
after a dispute with upper management over what he assumed
was fighting for the division. He highlighted that the
division had lost around 22 employees during the current
administration, some of whom were talented engineers who
were not easy to replace. He stated that when he had asked
the administration it had sounded fairly unconcerned or
indifferent about the issue and had suggested eliminating
the positions. He did not have faith in the department's
management. He opposed the amendment.
Representative Wool asked for verification that the
amendment did not pertain to air quality issues and only
applied to waste disposal. He stated there was talk about
micronuclear power in parts of Alaska. He asked if nuclear
waste would be hazardous waste. He asked if the state would
have primacy over nuclear waste under the amendment.
Representative Rasmussen deferred to the department.
JASON BRUNE, COMMISSIONER, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION (via teleconference), answered that nuclear
waste was a hazardous substance handled by the Nuclear
Regulatory Commission (NRC). He stated there was
legislation addressing the topic with microreactors
currently.
Representative Wool wanted to ensure the amendment did not
impact the management of air quality.
Commissioner Brune confirmed it would not.
10:56:22 AM
Vice-Chair Ortiz asked how the amendment would impact the
state financially.
Commissioner Brune replied that the increment was $830,000
UGF for six full-time positions. Upon receipt of primacy,
federal funding was available to states with primacy at an
amount estimated to be $400,000. The department anticipated
the process would take two years and the ongoing commitment
would be $430,000 UGF and $400,000 federal receipts.
Representative LeBon shared that he had signed on as a co-
sponsor of the amendment. He shared that in the examination
process for commercial banks in Alaska, there was a federal
examination through the FDIC [Federal Deposit Insurance
Corporation], but the State of Alaska also examined banks.
He noted that negotiating with the state bank examiners was
much easier and more efficient than dealing with the
federal entity. He relayed that having the state on board
during an examination was to the benefit of the banking
community. Additionally, when he had served on a school
board, there had been the state high school qualifying exam
and the federal No Child Left Behind program. He shared
that it had been much easier to dealing with the state. He
viewed the amendment as a step towards state
responsibility. He supported the amendment.
10:59:29 AM
Representative Edgmon was wary of bringing on new programs
and hiring more people. He noted that in combination with
another amendment that would add 28 new employees, the two
amendments would result in 34 employees. He remarked it was
currently hard to hire or retain employees. He stated it
was the fourth year of an administration that may or may
not come back for another term. He stated the underlying
intent of the amendment was commendable; however, he was
concerned about putting a program in place that may not be
fully staffed up. He asked if the department had a high
degree of confidence it would be able to fill the
positions. He wondered how long it would take to get the
program up and running.
Commissioner Brune thought it was a fair question about
retention and being able to get the positions filled. He
detailed that DEC had a number of recent positions for
environmental program specialists and there had been a
significant number of applicants for the positions. The
department believed it would be able to fill the positions
for RCRA and 404 primacy in an expeditious manner. He
addressed Representative Edgmon's question about how long
it would take to obtain primacy. He relayed the department
estimated the timeframe at two years to complete the
application working cooperatively with the Environmental
Protection Agency (EPA). He relayed the EPA was very
supportive and the programs were designed to assumed by the
states. He thought the two-year timeframe for state control
over the program was an achievable target. He added that in
the 1980s, the legislature had added statutes telling DEC
to pursue primacy of RCRA. In 2014, the legislature
directed DEC to pursue primacy of the 404 program. He
stated the department was following the request of the
legislature in putting the process forward.
11:02:24 AM
Representative Carpenter asked how many areas DEC currently
exercised or managed primacy.
Commissioner Brune answered that the department had assumed
primacy over the Clean Air Act in 1972, Safe Drinking Water
Act in 1978, and the Clean Water Act National Pollutant
Discharge Elimination System (NPDES) in 2012. The state had
part of RCRA primacy for some time. The amendment pertained
specifically to RCRA Subtitle C. The state had current
primacy over four federal programs. He highlighted that the
programs were designed to be assumed by the state.
Representative Carpenter stated that the previous speaker
had expressed concerns about growing additional programs
and he shared the concerns. He asked what impacts Alaskans
may see if DEC assumed primacy over RCRA Subtitle C.
Commissioner Brune also had concern about growing
government, but he believed it was appropriate for the
state to have oversight over the programs. He believed the
state program would be accountable to Alaskans,
legislators, and the administration. He elaborated that it
would be less costly, result in timely and more coordinated
permitting processes and provide additional protection for
the environment. Currently, the EPA had one half of one
position located in Anchorage that worked on RCRA. He
expounded there were a number of inspectors who parachuted
in from Seattle. The department was proposing to work on
the program on a daily basis in conjunction with the
regulated community to ensure hazardous waste was handled
appropriately and that questions could be answered. He
shared that the previous week, the North Slope Borough was
fined $6.5 million by the EPA for a RCRA violation. The
administration believed the state needed to not focus on
fining, but focus on environmental protection and working
with the regulated community to ensure hazardous wastes
were handled. He believed it was a good investment for the
state to make.
11:05:55 AM
Representative Carpenter asked what industry could expect
in regard to the permitting process. He asked if permits
would be quicker and/or less costly.
Commissioner Brune replied that the permitting process
would be quicker and more responsive with more knowledge of
Alaska. He elaborated there would be less emphasis on
parachuting in and fining entities. There would be a focus
on day-to-day compliance assistance and working with
permitted entities to ensure they were being protective of
human health and the environment and allowing their
operations to proceed.
Representative Carpenter asked about the current appeal
process when industry had an issue with an EPA ruling or
fine. He asked what the process would look like with the
state assuming primacy.
Commissioner Brune responded that currently when entities
were fined by the EPA, they had the opportunity to appeal
and ultimately take it to court. He stated that like other
programs where Alaska had primacy, the process was similar.
The state's hope was to avoid giving fines by working with
entities on a day-to-day basis. He noted there were reasons
and situations where entities would need to be fined but
developing relationships with permit holders would help
reduce the number of fines and compliance issues. He stated
it would make permit holders be more protective of the
environment and have a better relationship. He thought
state primacy would help significantly.
11:08:27 AM
Vice-Chair Ortiz asked how many positions in DEC were
unfilled currently. He asked if the department was looking
to fill positions in other areas.
Commissioner Brune answered there was currently a 7 percent
vacancy factor at DEC. He shared that he had an emphasis on
growing staff, improving retention, and addressing issues
that existed when he took the position. He shared there had
been a 25 percent turnover rate when he had started the
job. He put an emphasis on ensuring timely, science-based,
legally defensible permits. He put a focus on training and
development. He was committed to DEC employees. He added
that the department's annual turnover rate had reduced to
17 percent. He remarked that the number was still not
something he was proud of, but stressed it was significant
that during the year of the "great resignation" that the
number had dropped from 25 percent to 17 percent. He
emphasized that the department was still working daily to
improve the number.
Vice-Chair Ortiz believed 48 states had assumed RCRA
primacy. He pointed out that the current administration was
in its fourth year. He asked why RCRA primacy had not been
pursued before the current session.
Commissioner Brune answered that it had not been an issue
raised when he had first started. As he had learned about
the lack of EPA effort, he determined the state needed
Alaskans overseeing the process. He wanted to make sure
things were done right and the environment was protected.
He stated that one half of one position based on overseeing
hazardous waste for the EPA was not appropriate. He would
have made the proposal three years earlier if he had known
about the issue.
11:12:21 AM
Vice-Chair Ortiz asked if Commissioner Brune was saying he
had not been aware of the RCRA process and how states had
assumed primacy in the area.
Commissioner Brune clarified that he was aware that states
could assume programs like RCRA, he had not been aware of
the lack of EPA staffing towards the effort. He had not
been aware there had only been one half of one EPA position
overseeing the program. Additionally, he had been unaware
people from Seattle with no understanding of Alaska were
the ones coming to inspect entities for RCRA violations. He
had not been aware of the lack of focus, and he wanted to
put the focus on RCRA. He believed DEC would do a far
superior job.
Vice-Chair Ortiz asked about the experience of other states
in relationship to the particular area. He asked if
litigation was common associated with RCRA permitting. He
wondered if the state could expect the cost of added staff
in addition to added litigation cost.
Commissioner Brune thought it was a fair question. He
stated it would be na?ve to think there would be no added
litigation costs when taking over management of a program
like clean air, clean water, and safe drinking water. He
relayed there were situations that occurred where the
department was doing its best to enforce protection of
human health and the environment. He elaborated that RCRA
did not have a significant amount of litigation involved,
but he believed there would be some. The department would
do its best in daily conversations with the regulated
community to try to ensure litigation did not occur;
however, there were times when there were bad actors that
had to be brought to the courts to ensure compliance and
protection of human health and the environment.
11:15:11 AM
Representative Johnson supported the amendment with some
concern. She thought it was important to be aware and
cautious. She stressed that the department needed to be
committed because the issue was not to be taken lightly.
She highlighted that even if DEC had primacy, it did not
mean the EPA could not hop in anytime it felt necessary to
impose action. She noted there was often times no
protection for the company or municipality in question. She
emphasized it was a huge responsibility for a state to take
on. She underscored the importance of caution. She
indicated to Commissioner Brune she would vote in support
of the amendment because she had some confidence in his
ability to get the primacy up and running and in his
ability to manage the department. She pointed out that it
was a long-term issue. She reiterated that state primacy
was a major responsibility the state would take on as a
state and for companies and municipalities. Additionally,
she cautioned that when the state gave RCRA advice, it had
better be good advice.
Commissioner Brune responded that the message was delivered
and heard. He stated that the relationship the state and
EPA had as co-regulators of the program would be similar to
other areas where Alaska had primacy. He elaborated that as
co-regulators it was necessary to discuss things. He
expounded that the EPA would have to give DEC a heads up if
the federal agency planned to parachute in. He
characterized the current relationship with the EPA as
fantastic. He was proud of the relationship.
Co-Chair Foster recognized Representative David Nelson in
the room.
Representative Wool highlighted the air quality PM 2.5
issue in Fairbanks. He asked if the EPA had stepped in to
address the air quality issue at any time in the past. He
knew it had been a threat in the past that if the state did
not fix the issue the federal government would step in.
Commissioner Brune answered that the EPA had the authority
to step in. He relayed that the state's implementation plan
was currently before the EPA and the EPA had approved
certain components. The federal programs were passed by
Congress and delegated to states. The EPA could come in to
ensure programs were properly administered, resourced, and
enforced. The department believed its proposal for air
quality in Fairbanks addressed and improved air quality.
The department was committed to working with the EPA to
ensure it accepted the proposal.
Representative Wool asked when DEC had taken over primacy
for air quality.
Commissioner Brune answered that DEC had taken over primacy
for air quality in 1972. He added that DEC was celebrating
its 50th anniversary in the current year. He relayed that
air quality was the first program DEC had taken primacy of.
11:20:20 AM
Representative Wool asked if there had ever been any threat
to the primacy where people had said DEC was not doing a
good enough job.
Commissioner Brune answered that there had not been a
threat to the state's primacy during his tenure with the
department. He believed the state needed to ensure it was
adequately resourcing the programs. He elaborated that
during his first year with the department, the EPA had
advised the department it did not have enough enforcement
staff or inspectors. Consequently, he had put together a
budget proposal to increase the number of inspectors, which
had been passed by the legislature. He relayed that DEC
made corrections when suggested by the EPA and public to
ensure state oversight was maintained because state
oversight was far better than federal oversight.
Representative Wool asked if the air quality program had
ever been threatened to go back to the federal government.
Commissioner Brune responded that if the department had not
put a program forward, the EPA would have put a federal
implementation plan forward. He believed the EPA had been
waiting for a state plan for the better part of six years
to eight years. He relayed that within his first year with
the department, DEC had submitted the proposal. The threat
of sanction had been removed as a result of the submittal.
11:21:54 AM
Representative Josephson referenced Commissioner Brune's
testimony that the EPA recently told the department that it
did not have enough inspectors. He noted that Commissioner
Brune had used a second word that may have been
enforcement. He asked about the second word Commissioner
Brune had used.
Commissioner Brune answered, "Enforcement, that is
correct."
Representative Josephson asked why that had been the case.
Commissioner Brune answered that it had been under the
prior administration, and he could not speak to the
reasoning. He relayed that when he had been told of the
need, the department had put together the budget proposal
and the problem had been fixed. He elaborated that the
department had beat the number of required inspections the
previous year and the EPA was ecstatic with the progress
DEC had made.
11:23:04 AM
Representative Rasmussen provided wrap up on the amendment.
She had distributed letters of support to committee members
from various industries. She noted the group of supporters
was broad. She asked for members' support.
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Johnson, LeBon, Rasmussen, Thompson, Wool,
Carpenter, Merrick
OPPOSED: Josephson, Ortiz, Edgmon, Foster
The MOTION PASSED (7/4). There being NO further OBJECTION,
Amendment H DEC 1 was ADOPTED.
11:24:38 AM
AT EASE
11:31:29 AM
RECONVENED
Co-Chair Foster stated there were a couple of other items
related to primacy that would be taken up for
consideration.
Co-Chair Merrick MOVED to ADOPT Amendment H DEC 3 (copy on
file).
H DEC 3
Department of Environmental Conservation
Water
Offered by Representatives: Merrick, Rasmussen
The Alaska Department of Environmental Conservation
(DEC) will assume primacy of Section 404 of the Clean
Water Act (CWA), which is the primary federal law
governing pollution control and water quality of the
Nation's waterways.
Section 404 of the CWA regulates the use of dredged or
fill material into the waters and wetlands of the
United States (WOTUS) and requires the U.S. Army Corps
of Engineers (USAGE) to issue a Section 404 permit
before dredged and fill material may be discharged in
WOTUS.
404 permit applicants in Alaska already must obtain a
Section 401 water quality certification from DEC,
which requires the Department to review the project,
analyze its potential water quality impacts and
solicit public and agency comments. DEC assumption of
the 404 program would provide a streamlined permitting
procedure, greater certainty to the regulated
community, conservation of resources of both the
applicant and regulator, and greater control over the
development of natural resources while complying with
federal law.
1004 Gen Fund (UGF) 4,904.0
Vice-Chair Ortiz OBJECTED.
Co-Chair Merrick noted that Representative Rasmussen was a
cosponsor on the amendment. She explained the amendment
with a prepared statement:
Reinstating this funding will give Alaska greater
control in developing our natural resources, while
complying with federal law. The legislature gave the
Department of Environmental Conservation statutory
authority and funding for this program in 2013 and
they started implementing primacy before funding was
cut during statewide budget reductions. DEC assumption
of the 404 program would remove state and federal
overlap and streamline permitting, provide greater
certainty to the regulated community, conserve
resources of both the applicant and regulator, and
give Alaska greater control in developing our natural
resources. This is all while complying with federal
law and without adverse impact on the environment.
Although this initially is going to require some
general funds, the intent is to move to a fee for
service concept where the applicant's fees will cover
the cost of issuing their permit. This is a two-year
process, so the department is requesting three
positions in the FY 22 supplemental, 25 positions in
FY 23, and the additional 4 positions in FY 24. There
is some misconception that 404 only deals with mining
permits and yes mining is one of the industries that
applies for these permits, but state agencies also,
like DOT, need these permits for many of their
projects.
Instate permitting would be responsive to Alaska's
short construction season where entire seasons can be
missed if a permit application sits on the desk of an
EPA regulator in Seattle. I was surprised to learn
that 65 percent of the nation's wetlands are in
Alaska, so every infrastructure project impacting
wetlands including roads, bridges, and singular
residential development projects, need a 404 permit. I
also want to clarify that this funding does not give
the state 100 percent oversight of the 404 permitting
process. Projects such as the Pebble Mine, would still
require the Army Corps of Engineers involvement and
also, state issued permits would still be subject to a
veto by the EPA. Because of that, I feel it is in our
state's best interest to assume primacy over the 404
program. A state run 404 program would reduce the
uncertainty resulting from shifting national policies.
11:35:15 AM
Vice-Chair Ortiz requested to hear from the DEC
commissioner.
Commissioner Brune provided remarks on the amendment. He
expressed the department's excitement about the program. He
reviewed that Section 404 of the Clean Water Act oversaw
the discharge of dredged or fill materials into waters and
wetlands. The department believed primacy over 404 would
provide greater streamlined permitting and greater
certainty to the regulated community. The amendment would
impact projects of all sizes and most construction and
development projects require 404 permits. He elaborated
that the [primacy] implementation process would take two
years; DEC was putting currently putting together its
application and working with the regulated community to
understand impacts throughout the process as the
application to the EPA and Corps of Engineers was
developed. The department was requesting an increment of
$4.9 million UGF for 28 full-time positions. The statutory
authority had been passed in 2013. The department would be
looking at a fee-for-service process, which had not yet
been finalized and could require legislative approval. He
stated it was similar to what the department had done with
the NPDES [National Pollutant Discharge Elimination System]
program and air program where some regulatory oversight
expenses were passed on to the regulated community.
Vice-Chair Ortiz referenced the previous amendment where 48
states had taken over RCRA primacy and Alaska was one of
the two that had not. In contrast, he believed only two
states had taken over 404 primacy. He thought there must be
a good reason for that. He asked how taking over 404
primacy was going in Florida.
Commissioner Brune clarified that there were currently
three states with 404 primacy including New Jersey,
Michigan, and Florida. He expounded that Florida had worked
with the Corps of Engineers and EPA in developing what
areas would be assumable by the state. There were two
states that came to mind when thinking about wetlands:
Florida and the Everglades and Alaska. He detailed that
Alaska had 175 million acres of wetlands, which was nearly
twice the wetlands in the Lower 48. He believed Alaska
should have oversight over its wetlands. Florida had
received 404 primacy at the end of 2020.
Commissioner Brune elaborated that the EPA had been sued by
some environmental organizations over whether Florida
should have been granted primacy. He underscored that when
states assumed primacy they were required to be as rigorous
as the federal requirements but could be more so. There
were concerns from the organizations that brought the
lawsuit that Florida's program was not as rigorous as the
federal government's; the lawsuit was currently in the
courts. He had spoken with the commissioners from New
Jersey, Michigan, and Florida during the process and DEC
had worked closely with the EPA as it was contemplating
whether to put the application forward. He stated that the
EPA was enthusiastic and was willing to help. The EPA had
offered grants to DEC and DEC had applied; the department
had not yet received the funds because it had not yet been
given authority by the legislature to move forward.
Commissioner Brune had learned in conversations with the
states with 404 primacy that it was a much more efficient
program with coordination between the 402 NPDES program and
the 404 program. He noted that a 401 certification was not
required. He added that instead of having three
governmental entities involved there was only one entity
involved. The other states had talked about the cost and
time savings with no reduction to environmental protection.
He believed the other 47 states may not have sought 404
primacy because wetlands may not have significant impacts
on their states. He emphasized that Alaska held two-thirds
of the nation's wetlands. He stated it was and should be a
priority for Alaska. He added it was such a priority that
the legislature passed statutory authority for the
department in 2013.
11:41:43 AM
Vice-Chair Ortiz stated that the amendment sponsor had
indicated state 404 primacy would help streamline and make
it easier to permit projects. He stated it implied there
had been difficulty with the process up to the current
point. He asked if there had been specific areas where the
state had been unable to secure permits through the EPA and
Army Corps of Engineers. He asked if there were projects
currently being held up.
Commissioner Brune answered that from a timeliness
perspective and allocation of resources when a state had
oversight of the program, the state could allocate
additional resources if there were higher priority
projects. He added that the state would obviously want to
ensure it was meeting timelines. He highlighted that the
permitting process could take a very long time. For
example, the Sterling Highway reroute had taken over 30
years. The federal government did not have to prioritize to
the state's level of prioritization. He shared there were
small developers in Alaska wanting to build homes in areas
where the mitigation impacts were so expensive based on
what the Corps of Engineers had told them, they did not go
forward with the projects. He stated that it was impacting
small and large companies.
11:43:53 AM
Vice-Chair Ortiz asked if there were any specific problems
where the state had tried to permit projects in the name of
better use of resources and economic development.
Commissioner Brune did not have any specific projects. He
stated that generally it was important it was understood
that the state cared about its wetlands and wanted to have
oversight over wetlands and projects going forward. He had
heard concerns about the time and mitigation put forward by
the Corps of Engineers and the lack of coordination between
states and the federal government. He thought it would be
smart for the state to assume primacy over the program from
an accountability perspective.
Vice-Chair Ortiz stated that the amendment sponsor had
included Pebble Mine in her comments. He asked if there
would be any added authority for the state in relation to
the project if it assumed 404 primacy.
Commissioner Brune answered that the Pebble Project, as it
was currently submitted, would require Corps of Engineer
permits regardless. He explained that ports, harbors, and
navigable waters were not assumable by states. He
elaborated that oversight by the EPA and Corps of Engineers
would remain and the 404 C opportunity would remain in
place. Additionally, with respect to the Pebble Project,
the Bristol Bay Forever initiative had been passed, giving
the legislature the final say.
11:46:49 AM
Vice-Chair Ortiz asked if the state had any more authority
or ability to have a say in what happened with Pebble Mine
if it assumed 404 primacy.
Commissioner Brune answered the state had 401 and 402
permits already, which it had oversight over. He confirmed
that the state would oversee the permitting process for
lands it assumed if it obtained 404 primacy. He stated
there would be components of a project and it would depend
on what went into the application for primacy in terms of
which areas would be assumed by the state and which were
maintained by the federal government. There would be things
the state had added oversight of. He reiterated that the
EPA and the Corps of Engineers would maintain their
oversight over the proposed Pebble Mine project.
Vice-Chair Ortiz stated that the amendment would bring a
large growth of government including $4.9 million in
beginning costs and 28 new positions. He emphasized that a
significant amount of litigation went to the EPA and Army
Corps of Engineers and the state would assume the costs if
it took over primacy. He recognized the state currently had
more financial flexibility; however, it was not that long
ago where the state had been far from that situation. He
pointed out that the previous year, the subcommittee had
attempted to give the DEC more staff to help it do a better
job following through with its SPAR [Spill Prevention and
Response] responsibilities. He underscored that the item
had been vetoed. He cited the expense of the increased
positions and litigation and did not understand the timing
of the current proposal.
11:50:28 AM
Representative Rasmussen highlighted there was a letter in
support of primacy over 404 and RCRA from the Alaska
General Contractors. She detailed that the organization
represented over 600 contractors and suppliers statewide.
She stated the letter highlighted the benefit of allowing
Alaskans to permit Alaskan projects. She asked how many
other states had wetlands.
Commissioner Brune replied that every state had wetlands,
but some states had more than others. He relayed that
Alaska had two-thirds of the nation's wetlands. He
elaborated that every state had some oversight and effort
through the Army Corps of Engineers.
Representative Rasmussen asked if any other states
experienced similar seasons and temperatures like Alaska's
Arctic and the need for ice roads.
Commissioner Brune answered that Alaska was what made the
United States an Arctic nation. Alaska dealt with issues
that other states did not have. He added that many states
had already impacted significant amounts of their wetlands.
He highlighted that at one point there had been 200 million
acres of wetlands in the Lower 48, but only 100 million
acres remained. He remarked that the state had a
responsibility to take care of its wetlands because they
provide significant ecological functions, but it also had
the responsibility to mitigate any impacts from projects
appropriately.
Representative Rasmussen asked for the average 404
permitting time for Alaska and how it compared to other
states.
Commissioner Brune replied that the timeline for nationwide
permits required to follow certain stipulations could be
immediate to decades; it depended on the complexity of the
project.
Representative Rasmussen stated that Alaska was very unique
and there were projects with a limited window. She
elaborated that missing a window could delay a project by a
year. She remarked that with the rising cost of materials
and labor the construction workforce could not afford the
delay. She spoke to the importance of state oversight of
permitting as Alaskans understood the state's unique
challenges and the needs of its ecosystems. She supported
the amendment.
11:54:19 AM
Representative LeBon had witnessed frustration from banking
customers about the difficulty of maintaining permits on
wetlands. He stated that customers had been extremely
frustrated by the delay caused to projects when waiting for
a permit from the Army Corps of Engineers. He supported the
amendment.
Representative Edgmon addressed the government to
government consultation with tribes. He believed if the
amendment passed, there would continue to be tribal
consultation; however, it would not be the same as having
EPA in charge. He asked for comment by Commissioner Brune.
Commissioner Brune answered that when the department had
the NPDES program go forward it had to commit to work and
consult with tribes. The department had been following the
commitment and had a tribal liaison in the Division of
Water. He emphasized the importance of the issue and had
brought a tribal liaison position into the commissioner's
office as well. The department was committed to working
with tribes, regional and village corporations, and other
stakeholders in the process. He added that the EPA would
also require that the state work with tribes as part of its
application process.
11:56:32 AM
Representative Edgmon focused on the area of fees. He asked
who would pay for the program in the future. He if it would
go through the Department of Transportation and Public
Facilities (DOT) and whether there would be a fiscal
implication to the state. Alternatively, he wondered
whether the fee would go to the private sector entity
involved. He highlighted that many of the projects would be
state focused and not from the private sector.
Commissioner Brune answered there would be a full process
DEC would put forward to work with the regulated community
to develop a fee program if the department decided to use a
fee program. He relayed that DOT and other state entities
received a significant number of permits from the Corps of
Engineers. He compared the situation to the way DEC
currently received money from DOT for its air permitting
program. He stated it was yet to be developed and there
would be significant dialogue with the regulated community
before an official proposal came forward.
Representative Edgmon stated that the 404 Section of the
Clean Water Act was inherently litigious where there were
lawsuits, especially involving bigger projects, that were
almost part of the cost of doing business. He considered
what the problem was that the amendment proposed to fix. He
recognized it sounded great to have streamlining impacts,
to reduce overlapping impacts, and have local knowledge;
however, he pointed to the Pebble Mine project that was one
proposed project involving larger scale resource
development. He asked if there was not some advantage in
having the EPA involved in terms of litigation and saving
the state money. He wished he was more knowledgeable about
the issue, but he sensed there was advantage to the EPA's
involvement.
Commissioner Brune answered it was incumbent that project
proponents put good proposals forward to make them
litigation proof. He stated it was highly likely that the
EPA and Corps of Engineers would remain in the process in
the instance of Pebble Mine and other large projects. He
stated the opportunity for litigation existed for any
permits. He stated that the department's sideboards were
set by the legislature and Congress. He relayed it was up
to his team to ensure permits approved or not approved
would withstand the courts as well.
Representative Edgmon found it interesting that the three
letters in support delivered to members just prior to
considering the amendment had no reference to fees or a
problem that needed to be fixed. He remarked there appeared
to be convincing arguments about the need to speed up
smaller development projects and help DOT to do its work;
however, he remained unconvinced that the amendment was not
about large-scale resource development.
12:01:20 PM
Representative Josephson referenced his remark on the prior
amendment that there were 22 fewer SPAR positions and at
some point, the department, under Commissioner Brune's
guidance, requested to have the positions removed. He asked
for the accuracy of his statement.
Commissioner Brune replied that there had been financial
issues in the SPAR division that from a sustainability
perspective he had elected to cut five to seven positions
for the first two years. He stated he had worked closely
with Representative Josephson on a bill to try to bring
sustainability to SPAR. He had worked with the SPAR
director and communicated if the division needed additional
staff, he would go to bat for the division. Currently, the
SPAR director believed the existing staff was sufficient to
meet the division's requirements.
Representative Josephson asked for verification that the
previous director did not believe that.
Commissioner Brune could not speak for the former director.
Representative Josephson stated that, "She was one of your
most important section employees." He was not asking
Commissioner Brune to speak for the former director. He
asked if the former director had told Commissioner Brune
that she was concerned about the removal of positions, the
failure to retain employees, and the unit.
Commissioner Brune relied absolutely. He had shared the
concerns. He stated the division had a large vacancy rate
with around 30 unfilled positions. He was not prepared to
ask for additional positions if the existing positions were
not being filled. He stated there had been morale issues
with losing one in four people on an annual basis. He
stressed the department had worked to improve the turnover.
He stated that if and when the department needed additional
positions, he would go to bat for SPAR. He was supporting
an increase to the refined fuel surcharge in order to bring
sustainability to SPAR. He believed he and the former
director had shared the same concerns. He stated that the
department had no choice but to propose the cuts because
there had not been sustainability through the existing
funding streams for SPAR. He added that the department was
in a different situation at present and had not proposed
any cuts in the current year. He looked forward to years of
sustainability thanks to Representative Josephson's
legislation if it passed.
12:04:26 PM
Representative Josephson appreciated Commissioner Brune's
support for the legislation. He asked for verification that
under the current administration, DEC had issued new rule
making as to spill prevention response in the Prince
William Sound.
Commissioner Brune replied the department was through its
regulatory process for spill prevention and response and
Article 4; however, it would have no relation to the 404
program.
Co-Chair Merrick noted that SPAR was not part of the
amendment.
Co-Chair Foster understood Representative Josephson was
trying to make a point; however, he asked him to tighten up
his questioning.
Representative Josephson relayed that the watchdog for
Prince William Sound was very unhappy about the rule making
under Title 4 that the commissioner had just spoken of. He
stated there was a three-page list of concerns over the
matter. He highlighted there was a law specifying DEC was
supposed to have ocean rangers on ships, but the department
did not have ocean rangers on ships.
Representative LeBon asked for a point of order.
12:05:53 PM
AT EASE
12:06:08 PM
RECONVENED
Representative LeBon stated they were way off topic. He
called for the question on the amendment.
Representative Josephson requested a couple of follow up
questions.
12:06:43 PM
AT EASE
12:09:03 PM
RECONVENED
Co-Chair Foster stated he would allow Representative
Josephson to finish with two additional questions.
12:09:21 PM
AT EASE
12:09:33 PM
RECONVENED
Representative LeBon WITHDREW his motion to call for the
question.
Co-Chair Foster let Representative Josephson make
concluding remarks.
Representative Josephson stated they had just spoken about
regulations impacting the safety of the waters in Prince
William Sound. He highlighted there was an ocean ranger law
without ocean rangers. Additionally, there were large tank
inspections, which he believed were now passive. He asked
why the legislature should believe the positions [under the
amendment] would not be cut like SPAR's positions had been
cut. He asked why he should believe the positions would be
filled.
Commissioner Brune answered that he had gone to bat for the
Division of Water when he had been told additional
employees were needed and the positions had been filled. He
would do the same thing for the 404 program.
Representative Josephson referenced that Commissioner Brune
had stated that the current secretary under the federal
Biden administration was enthusiastic about the
department's attempt to take over 404 primacy.
Commissioner Brune answered that he could not say the
secretary was personally enthusiastic; however, the
employees in Region 10 whom the department had worked with
had gathered teams to help DEC with its efforts and were
enthusiastic in anything they could do to help and had been
great to work with.
Representative Josephson commented that the Clean Water Act
had been signed into law in 1972. He remarked there were
three states with 404 primacy, which he believed spoke
volumes. He directed a question to the amendment sponsor.
He had been told there were expenses outlined in the amount
of $250,000 for anticipated litigation. He asked the amount
he cited was accurate.
Co-Chair Merrick answered that no one had talked to her
about litigation fees. She did not know where the number
came from.
Co-Chair Merrick provided wrap up on the amendment. She
confirmed that only three states had 404 primacy; however,
Alaska had over two-thirds of the nation's wetlands. She
believed it spoke to the reason Alaska needed primacy more
than any other state. She addressed concerns voiced about
administrations in the future. She had confidence that any
administration would make environmental conservation a
priority. She remarked that Alaska had a proud history of
developing its state cleaner, safer, and more
environmentally sound than anywhere else in the world. She
believed it would continue. She thought Alaskans should be
masters of their own destiny and have Alaskans ensuring its
projects were permitted in a timely and environmentally
friendly manner.
12:13:28 PM
AT EASE
12:17:07 PM
RECONVENED
Vice-Chair Ortiz MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Johnson, LeBon, Rasmussen, Thompson, Carpenter,
Merrick
OPPOSED: Josephson, Ortiz, Edgmon, Foster
The MOTION PASSED (6/4). There being NO further OBJECTION,
Amendment H DEC 3 was ADOPTED.
Representative Wool was absent from the vote.
Representative Rasmussen requested to address the next
amendment related to primacy.
Co-Chair Foster directed members to the supplemental
operating budget amendment packet.
12:19:00 PM
Representative Rasmussen MOVED to ADOPT Amendment
Supplemental Operating 1 (copy on file):
DEPARTMENT: DEC
APPROPRIATION: Water
ALLOCATION: Water Quality, Infrastructure Support &
Financing
ADD: $750,000 UGF (1004)
EXPLANATION: The Alaska Department of Environmental
Conservation (DEC) will assume primacy of Section 404
of the Clean Water Act (CWA), enacted in 1972, which
is the primary federal law governing pollution control
and water quality of the Nation's waterways. The Act's
objective is to restore and maintain the chemical,
physical, and biological integrity of the Nation's
waters. DEC assumption of the Section 404 program
would provide a streamlined permitting procedure,
greater certainty to the regulated community,
conservation of resources of both the applicant and
regulator, and greater control over the development of
its natural resources while complying with federal
law.
Representative Josephson OBJECTED.
Representative Rasmussen explained the amendment was a
supplemental request to enable the state to begin the
process to gain Section 404 primacy. The amendment would
fund three positions to do interagency work at a cost of
$750,000.
Representative Josephson MAINTAINED the OBJECTION.
Co-Chair Foster stated that the amendment would allow the
404 program to begin earlier.
A roll call vote was taken on the motion.
IN FAVOR: LeBon, Rasmussen, Thompson, Carpenter, Johnson,
Merrick
OPPOSED: Josephson, Ortiz, Edgmon, Foster
The MOTION PASSED (6/4). There being NO further OBJECTION,
Amendment Sup Op 1 was ADOPTED.
Representative Wool was absent from the vote.
HB 281 was HEARD and HELD in committee for further
consideration.
HB 282 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster relayed his plan to finish the budget
amendment process during the afternoon meeting.
ADJOURNMENT
12:21:43 PM
The meeting was adjourned at 12:21 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 281 Legal Memo LAW L12 Replacement 032322.pdf |
HFIN 3/24/2022 9:00:00 AM |
HB 281 |
| HB 281 & HB 282 Amendment DNR-A Replacement 032422.pdf |
HFIN 3/24/2022 9:00:00 AM |
HB 281 HB 282 |