02/27/2013 09:00 AM Senate FINANCE

SENATE BILL NO. 27                                                                                                            
                                                                                                                                
     "An  Act  establishing  authority   for  the  state  to                                                                    
     evaluate  and   seek  primacy  for   administering  the                                                                    
     regulatory  program  for  dredge  and  fill  activities                                                                    
     allowed  to individual  states  under  federal law  and                                                                    
     relating  to  the  authority;   and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:08:09 AM                                                                                                                    
                                                                                                                                
LARRY  HARTIG,  COMMISSIONER,  DEPARTMENT  OF  ENVIRONMENTAL                                                                    
CONSERVATION, (DEC) introduced his  support staff. He shared                                                                    
that  in   crafting  the  legislation  the   department  had                                                                    
considered the most efficient use  of time and personnel. He                                                                    
stated that the department had  led the charge at moving the                                                                    
legislation  forward. He  noted that  seeking primacy  was a                                                                    
significant  endeavor.  He  recognized that  the  department                                                                    
wanted  to  attract  experts on  regulatory  programs  which                                                                    
would limit work with contractors  or non-firms. He stressed                                                                    
that  an informed  discussion  with  the federal  government                                                                    
concerning  what  should be  delegated  to  states would  be                                                                    
necessary in meeting the intent of the legislation.                                                                             
                                                                                                                                
9:11:49 AM                                                                                                                    
                                                                                                                                
ED  FOGELS,  DEPUTY   COMMISSIONER,  DEPARTMENT  OF  NATURAL                                                                    
RESOURCES,  relayed that  in his  extensive experience  with                                                                    
permitting activities  for large  projects he had  noted the                                                                    
importance  of the  relationship between  the state  and the                                                                    
U.S. Army Corps of Engineers  (USACE). He said that wetlands                                                                    
permitting had been important to  every project. He believed                                                                    
that state  primacy would be  beneficial and would  give the                                                                    
state  more   control  over   the  permitting   process.  He                                                                    
highlighted that there  was not an economic  activity in the                                                                    
state that did  not somehow rely on  the wetlands permitting                                                                    
process.                                                                                                                        
9:12:51 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough looked to Page 4, line 19 of SB 27:                                                                       
                                                                                                                                
     notwithstanding any  other provision  of law,  take all                                                                    
     actions necessary  to receive federal  authorization of                                                                    
     a state  program for the department  and the Department                                                                    
     of  Natural  Resources  to  administer  and  enforce  a                                                                    
     dredge  and fill  permitting program  allowed under  33                                                                    
     U.S.C.  1344  (sec.  404,  Clean   Water  Act)  and  to                                                                    
     implement the program, if authorized                                                                                       
                                                                                                                                
Vice-chair  Fairclough  wondered  if the  legislature  would                                                                    
have any  recourse for not  going forward regardless  of the                                                                    
cost of acquiring the program.                                                                                                  
                                                                                                                                
Commissioner  Hartig replied  that  it  was important  going                                                                    
forward that federal agencies understand  that the intent of                                                                    
the state  was to  gain primacy.  He stressed  that statutes                                                                    
and  regulations, as  well  as personnel,  needed  to be  in                                                                    
place before  the state applied  for primacy. He  noted that                                                                    
the  program had  to  be comparable  to  federal law,  which                                                                    
meant that the  department would need to  have the positions                                                                    
funded  in the  budget.  He  said that  the  request in  the                                                                    
current  fiscal  note  would  not  be  enough  to  fund  the                                                                    
positions; without the positions the  state would not have a                                                                    
complete application to submit to the federal government.                                                                       
                                                                                                                                
9:15:29 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough   understood  that  there   would  be                                                                    
approximately 50  new, full-time employees to  implement the                                                                    
federal program.                                                                                                                
                                                                                                                                
Commissioner  Hartig responded  that  49 was  the number  of                                                                    
people in  the regulatory program  for the corps.  He stated                                                                    
that he did  not believe that the number  would increase. He                                                                    
said they  did not expect to  get the full program  from the                                                                    
corps due to geographic limitations.                                                                                            
                                                                                                                                
9:16:42 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  believed that  the  state  takeover of  the                                                                    
program  would expedite  the  permitting  process which  had                                                                    
been  one  of  the  biggest  frustrations  voiced  by  small                                                                    
businesses  in  particular.  He   noted  that  the  cost  of                                                                    
implementing  the  legislation   would  be  significant.  He                                                                    
appreciated why  the employees were  necessary and  why they                                                                    
should be  state employees  rather than  contract employees.                                                                    
He  expressed concern  that unfunded  liability could  raise                                                                    
with each  new position. He asked  if the first 5  needed to                                                                    
be hired immediately, or if the  state could hold off on any                                                                    
of the positions until the next budget cycle.                                                                                   
                                                                                                                                
Commissioner Hartig responded that  the 5 positions would be                                                                    
added to  DEC this year,  and the next  3 would be  added in                                                                    
two years in FY 15, making a  total of 8 new positions I the                                                                    
department.                                                                                                                     
                                                                                                                                
9:20:09 AM                                                                                                                    
                                                                                                                                
MICHELLE  BONNET  HALE,  DIRECTOR, WATER  QUALITY  DIVISION,                                                                    
DEPARTMENT OF ENVIRONMENTAL CONSERVATION,  spoke to the five                                                                    
positions in FY 14. She said  that one position was a fairly                                                                    
high  level  management   position  because  the  department                                                                    
needed  someone who  understood how  to coordinate  with EPA                                                                    
and USACE  and the  different federal service  agencies. She                                                                    
relayed that  there were additional two  program development                                                                    
positions   and  two   capacity   building  positions.   She                                                                    
elaborated  that  the  program  development  positions  were                                                                    
necessary  to  complete  the  list  of  tasks  necessary  to                                                                    
develop the application  that would be submitted  to the EPA                                                                    
for assumption of the program.  She explained that the first                                                                    
task  would be  to write  a program  description of  how the                                                                    
program would  operate; one of  the key components  would be                                                                    
determining which waters and wetlands  were subject to USACE                                                                    
oversight  and which  would be  able  to be  assumed by  the                                                                    
state. She said  that the state would have a  lot of work to                                                                    
figure out the cost and  benefits of the program; describing                                                                    
what the program  would look like and how  it would operate.                                                                    
She stated  that a contractor  would work on a  gap analysis                                                                    
on  statutes  and  regulations   and  would  possibly  write                                                                    
regulations  and draft  statutes.  She  reiterated that  the                                                                    
amount  of work  would be  significant and  detail oriented.                                                                    
She  furthered that  the capacity  development track  of the                                                                    
legislation  augmented the  program  development track.  She                                                                    
explained that  statewide programmatic general  permits were                                                                    
permits  that the  USACE could  issue, and  the state  could                                                                    
cooperate with the corps on  the issuance of the permits and                                                                    
then take  over management  of the permits.   She  said that                                                                    
the  people in  capacity  development  positions would  work                                                                    
with  the corps  to develop  statewide programmatic  general                                                                    
permits which the state would implement and then run.                                                                           
                                                                                                                                
9:24:00 AM                                                                                                                    
                                                                                                                                
Vice-Chair   Fairclough   wondered  about   the   work/share                                                                    
agreement between the state and the USACE.                                                                                      
                                                                                                                                
Ms. Hale replied that the  work/share program was similar to                                                                    
the  relationship  the  state  had  with  the  Environmental                                                                    
Protection Agency  (EPA). She said  that it could  involve a                                                                    
state employee  sitting at the  corps in order to  learn how                                                                    
to run the program and  identify efficiencies, and to assist                                                                    
the corps  with the  permit backlog.  She asserted  that the                                                                    
collaborative  work/share between  the corps  and the  state                                                                    
would benefit the state in the end.                                                                                             
                                                                                                                                
9:25:56 AM                                                                                                                    
                                                                                                                                
Senator Olson  queried the mining industry's  perspective on                                                                    
the program.                                                                                                                    
                                                                                                                                
Mr.  Fogels  responded  that  his  experience  with  smaller                                                                    
mining operations  revealed a great  concern for  the future                                                                    
of the industry.                                                                                                                
                                                                                                                                
Senator  Olson  noted that  there  were  a number  of  small                                                                    
mining operations  trying to make  money in Nome in  a short                                                                    
period  of time.  He  said that  the  increase in  depressed                                                                    
miners was bordering on a  social issue in Nome. He wondered                                                                    
who  would  be  paying  for   the  extra  burden  to  social                                                                    
services.                                                                                                                       
                                                                                                                                
Mr. Fogels  said that he  had been working closely  with the                                                                    
mayor of Nome to identify solutions to the problems.                                                                            
                                                                                                                                
9:30:26 AM                                                                                                                    
                                                                                                                                
Senator Olson said  that the city was at  the breaking point                                                                    
of its public safety constraints.                                                                                               
                                                                                                                                
Mr. Fogels  said that there  was in  increased appropriation                                                                    
in  the  governor's budget  request  that  would extend  the                                                                    
length of the DNR position in Nome.                                                                                             
                                                                                                                                
9:31:26 AM                                                                                                                    
                                                                                                                                
Senator Olson opined that the  streets in Nome were becoming                                                                    
populated with vagrants  due to the lack  of mining activity                                                                    
after the influx of miners.                                                                                                     
Commissioner Hartig  interjected that he could  not speak to                                                                    
the social issues in Nome,  but he recognized the additional                                                                    
activity  in the  area due  to gold  prices. He  stated that                                                                    
discussions had  been held with  the mayor of Nome,  as well                                                                    
as the  city council, concerning  how to maintain  order. He                                                                    
said that the representative from  DNR currently in Nome had                                                                    
experience  with  law enforcement,  and  because  DNR was  a                                                                    
regulatory agency, was being granted some police authority.                                                                     
                                                                                                                                
Senator  Olson expressed  concern that  having too  many new                                                                    
people in the  community could tax the  social and essential                                                                    
services beyond the community's capabilities.                                                                                   
                                                                                                                                
9:33:53 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly  expressed   support  for  streamlining  the                                                                    
permitting process. He understood  the one of DNR's missions                                                                    
was  to make  it so  businesses could  operate in  the state                                                                    
without  the  "ridiculous  hindrances" that  were  currently                                                                    
seen throughout  the permitting  process. He  encouraged the                                                                    
committee  to  pass  the  bill out  of  committee  with  the                                                                    
published fiscal notes.                                                                                                         
                                                                                                                                
9:34:51 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly MOVED  to REPORT SB 27 out  of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  27  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with previously published  fiscal notes:                                                                    
FN1 (DNR) and FN2 (ADM).                                                                                                        
                                                                                                                                
9:36:14 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:38:26 AM                                                                                                                    
RECONVENED