Legislature(2001 - 2002)
04/15/2002 09:29 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 326(RES)
"An Act relating to evaluating state assumption of the
wastewater discharge program under the federal Clean Water
Act; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
ZACH WARWICK, Staff to Senator Gene Therriault, explained that this
bill directs the Department of Environmental Conservation to
evaluate the benefits and consequences that would result from the
State assuming primacy for the National Pollutant Discharge
Elimination System (NPDES) currently managed by the federal
Environmental Protection Agency (EPA) Seattle, Washington office.
He explained that the federal Clean Water Act, enacted in 1972,
contains provisions allowing states, rather than the federal
government, to administer the NPDES permitting program, and noted
that 44 states currently do so. He continued that other states are
considering this option because it would allow each state to tailor
regulations to their specific environmental issues and determine
permit issuance timelines. He stated that, in addition to
evaluating the administration of the program, the Department would
determine associated costs and identify funding sources.
Senator Austerman, noting that this legislation involves
environmental issues, asked what "potential problems" might result
by this change.
Mr. Warwick commented that some people support continuing federal
management of the NPDES program, arguing that the federal
government does a better job than the State could; however, he
could not provide specific concerns.
Senator Austerman asked whether the intent of this legislation is
to conduct an evaluation of the benefits and consequences of this
proposal to present to the Legislature or whether enactment of this
legislation would be the actual evaluation. He pointed out that
Section 2 of the bill identifies the statutory and regulatory
changes, permitting procedures, and associated costs that would be
incurred by this transfer.
Mr. Warwick responded that the evaluation process involves a series
of steps, including regulatory and statutory changes that would be
considered in making a determination that the transfer would be
beneficial to the State.
Senator Austerman requested further information of the Department.
TOM CHAPPLE, Director, Division of Air and Water Quality,
Department of Environmental Conservation testified via
teleconference from Anchorage to respond to Senator Austerman's
question about "how in-depth" the Departments' evaluation would be.
He disclosed that this issue has been discussed for approximately
fifteen years, and the question is whether "it would be in the
State's best interest to take on this permitting program." He
stated that without an in-depth analysis, the determination would
not be possible; therefore, he continued, the inclusion of draft
regulations, permitting procedures and proposed corresponding
statutes is required to thoroughly evaluate the benefits and
consequences of the transfer.
Mr. Chapple surmised that if it becomes obvious, early in the
process, that the transfer would not be beneficial to the State; it
would be likely that the effort would be curtailed; however, he
reiterated, the complexity of the issue requires the State to
evaluate regulation and statute changes to determine what would be
required to thoroughly answer the question.
Senator Ward, referring to information provided on page 25 of the
May 15, 1998 Easton Environmental Consulting Engineering and
Sciences report titled "The State Role in NPDES Wastewater
Discharge Permitting in Alaska, Options for Improvement" [copy on
file], asked which industries have been granted administrative
NPDES extensions by the EPA.
Mr. Chapple commented that the Easton Report is not available at
the teleconferencing site.
JOHN SUND, Vice President, Norquest Seafoods, testified from an
offnet site and spoke in favor of the bill. He informed the
Committee that his seafood processing company holds NPDES permits
for each of its processing plants in Ketchikan, Petersburg,
Cordova, and Chignon as well as for two floating vessels that
process crab, herring, and salmon. He stated that this legislation
would streamline the process explaining that currently the DEC and
the EPA jointly administer the program, and the permit holder is
required to file joint, duplicate reports to each entity. He
furthered that whenever a discharge issue arises, the permit holder
is required to contact both the DEC and the EPA.
Mr. Sund asserted that this legislation does not alter the terms or
conditions of the permit; however, a single program administrator
would allow for a more uniform interpretation and enforcement of
the standards. He informed the Committee that at meetings where
representatives of the seafood industry, the EPA, and the DEC have
met to discuss and resolve discrepancies regarding the current
permit, it has been noted that some of the EPA personnel
administering the program have never been to Alaska and "do not
know much about the State or the seafood industry."
Mr. Sund informed the Committee that although the quality of the
water in mixing zones locations as well as the sizes of the mixing
zones are federal issues; the allowable quantity of seafood waste
deposits on the ocean floor is a State issue. He continued that
when a situation involves both jurisdictions, the permit applicant
gets "caught in the middle". He expressed that this situation would
be avoided if a single entity were responsible for the entire
process.
Mr. Sund summarized that this legislation would provide the
opportunity to explore whether this transfer would be beneficial to
both the State and the affected industries, and stressed that
inclusion of the statutory and regulatory details are paramount in
the determination. He noted that the question of how the program
would be funded is a significant issue, and he qualified that,
currently; the federal government funds its operation.
BILL JEFFERS, Manager, Environmental Services, Fairbanks Goldmining
Inc, and Vice-President, Council of Alaska Producers, testified via
teleconference from Fairbanks in favor of the bill. He voiced that
Mr. Chapple's testimony fairly represents Alaskan industries'
discussions and concerns regarding steps that should be taken to
address the issue, and that Mr. Sund adequately expressed the
concerns and problems that have been encountered under the current
system.
CHARLIE BODDY, Vice-President Governmental Relations, Usibelli Coal
Mines, testified via teleconference from Fairbanks in favor of the
bill as he stated that this legislation would provide the State the
ability to determine whether this transfer would be in the State's
and the industry's best interest. He stated that the mining
community, which is "dynamic" rather than "static" in its mining
endeavors, factors water discharge permit applications into its
timelines, and he attested that the continuous permitting delays of
"the ever-changing" EPA office staff in Seattle has been
detrimental to operations.
Senator Austerman asked if the EPA charges a permit fee.
Mr. Boddy responded that while there is no fee for the federal
NPDES permit, the State charges a certification fee.
Co-Chair Kelly asked whether this legislation is time critical.
Mr. Boddy responded that it is not.
Mr. Jeffers concurred.
Senator Leman voiced that, in his professional perspective, State
management of the NPDES permit process would be preferred; however,
he questioned why the evaluation process would take approximately a
year and a half to complete and require the hiring of additional
staff. He opined that the study could be conducted in less time at
a lower cost.
Senator Ward re-visited his question concerning which category of
industries received EPA administrative permit extensions as
specified in the Easton Report. He stated that this information
would be helpful in developing program receipt funding mechanisms
similar to those developed by other states to fund up to 96 percent
of program administration costs. He additionally asked for further
information about the permit extension process.
Mr. Chapple explained that NPDES permits are issued for five years,
and due to limited resources, it has been common for the EPA office
in Seattle to administratively extend seafood and mining permits
another five years. He exampled that the Municipality of Anchorage
sewage treatment plant permit was administratively extended for
more than ten years. He informed the Committee that a few years
ago, Congress notified the EPA that too many permitting delays were
occurring, and that the Seattle Region 10 office was among the
offices with the most delays. He communicated that the Seattle EPA
office is now current on the majority of its permits.
Senator Ward asked the testifier which industry holds the bulk of
the NPDES permits.
Mr. Chapple responded that NPDES permits are applicable to any
discharge affecting surface water. He stated that EPA characterizes
these discharges as "minor source" or "major source." He exampled
that major source discharges include such things as a sewage
treatment plant for medium to large communities and regulated
industries such as seafood processing plants, mining, and oil and
gas activities. He continued that all of the oil platforms
operating in Cook Inlet are permitted under a general permit issued
by the EPA whereas the North Slope activities have both general and
individual permits.
Senator Ward asked how much revenue the NPDES permits fees generate
toward the cost of administering the program. He informed the
Committee that a pulp mill in the State is currently charged
$80,000 for its permit.
Senator Leman voiced the understanding that the fees would need to
be increased to support the program.
Mr. Chapple stated that program funding is one of the major
components in the determination of whether the State should solely
administer the NPDES program. He shared that program receipts or a
combination of program receipts and state general funds or federal
funds are used to fund other states' programs.
Co-Chair Kelly reiterated that while no fee is currently charged
for the federal NPDES Permit, the State charges a certification
fee. He continued that were the process to transfer entirely to the
State, DEC would assess a fee for the issuance of the permit, and,
he surmised, the certification procedure would no longer be
necessary.
Mr. Chapple confirmed that only one fee would be assessed if the
State were the sole manager of the NPDES permitting process. He
stated that the fee levels would be determined during the
evaluation process as funding options are reviewed.
Senator Austerman stated that page 54 of the Easton Report
specifies that the NPDES permitting process could require up to
twenty-three, full-time EPA employees, and he asked whether the DEC
would need to staff at approximately this level, as this would
increase the cost of managing the program.
Senator Austerman voiced the understanding that the evaluation
would identify available federal funding in addition to industry
permit fees that would support the program; however, he expressed
concern regarding the level of the fees the industry might be
required to pay.
Senator Leman voiced that "some efficiency should be realized" by
the State assuming primacy of the process because of "the reduced
interaction with the EPA" and the benefit of absorbing the
certification process within the permitting process. He opined that
having Alaskans administer the program would produce additional
benefits, and he asserted that the "major goal" of this endeavor
should be to realize "substantial efficiencies."
AT EASE 10:01 AM / 10:03 AM
Senator Austerman agreed that the State's assumption of the
permitting process should result in more efficiencies and that the
Easton Report indicates that the State's management of the program
would result in a more accessible and predictable process; however,
he voiced, the report additionally specifies that, "the industry
shall be requested to contribute financially" by way of a permit
fee. He stated that historically, the amounts levied for State
permit fees have increased dramatically, and he continued to voice
concern about the costs incurred to the industry.
Senator Austerman opined that if the Department of Environmental
Conservation desires this process to be entirely assumed by the
State, they would produce a favorable report, and he expressed the
hope that the State's $315,000 investment in generating this report
would provide the necessary information to evaluate this endeavor.
Senator Olson characterized his professional experiences with the
Department of Environmental Conservation as positive encounters. He
stated that the current permitting process is cumbersome to
applicants, who are often working within critical timelines, for it
requires them to jointly coordinate the permit and any subsequent
events with the State and the EPA. He voiced that it can be "very
aggravating" to not have any one entity take responsibility, and he
asserted that the State should endeavor to make this process as
efficient as possible.
Amendment #1: This amendment changes the effective date of the
legislation to January 1, 2003.
Co-Chair Kelly moved to adopt Amendment #1.
There being no objection, Amendment #1 was adopted.
AT EASE 10:10 AM /10:11 AM
Co-Chair Kelly recommended that the Department of Environmental
Conservation FY 03 fiscal note amount be reduced by half to align
with the legislation's new effective date.
The Committee concurred and the fiscal note was revised.
Senator Leman stated, "I move to report the Finance version of the
bill with individual recommendations and the accompanying revised
fiscal note."
Senator Ward objected and stated that his concerns about the
effects of this legislation prevent him from supporting the
expenditure of $100,000 in general funds to conduct the study.
A roll call was taken on the motion.
IN FAVOR: Senator Austerman, Senator Olson, Senator Hoffman,
Senator Wilken, Senator Leman, Co-Chair Kelly
OPPOSED: Senator Ward
ABSENT: Senator Green, Co-Chair Donley
The motion PASSED (6-1-2)
CS SB 326 (FIN) was REPORTED from Committee with a $109,100 fiscal
note, dated April 16, 2002, from the Department of Environmental
Conservation.
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