SENATE BILL NO. 378 "An Act relating to regulation of the discharge of pollutants from timber-related activities under the National Pollutant Discharge Elimination System; relating to waste treatment and disposal permits; making conforming amendments; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated this bill, sponsored by the Senate Rules Committee at the request of the Governor, "authorizes the Department of Environmental Conservation to administer the National Pollutant Discharge Elimination Permit for the timber industry." ERNESTA BALLARD, Commissioner, Department of Environmental Conservation, informed that 21 years ago she served as the Regional Administrator for the federal Department of Environmental Protection Agency (EPA) and traveled to Alaska to meet with Governor Sheffield and the commissioner of the Department of Environmental Conservation. She reported that she recommended at that time that to protect its waters and also allow for resource development, the State should assume primacy on waters. However, she remarked that the State did not and since that date, 45 other states have done so, leaving Alaska as one of five that do not have primacy. She told of the advantages to the states that have assumed primacy in streamlining and establishment of state standards, administrative procedures and appeal procedures. She stated that because Alaska does not have primacy, the EPA writes permits and a second process for State approval is required. Ms. Ballard explained that this legislation would apply to timber- related activities as a pilot project, with the intention to expand to other development activities in the future. JON TILLINGHAST, Attorney, Sealaska Corporation testified in support of the bill. He commented that it is "no secret" that Alaska's timber industry was "on the ropes" and expressed this legislation would assist the industry and other industries in the future. Senator Olson surmised the witness' assertion is to the "best of your knowledge". Mr. Tillinghast affirmed, noting his knowledge is first hand. ADRIAN LECORNU, Administrator, Hydaburg Cooperative Association, testified via teleconference from an offnet location, asked whether the assumption of partial primacy for the timber sector would stipulate that the State would require Klukwan, Inc. to obtain a National Pollution Discharge Elimination System (NPDES) permit. SFC 04 # 90, Side B 09:50 AM Mr. LeCornu continued that a Ninth Circuit Court of Appeals opinion, issued in November 2002 relating to a case brought by the League of Wilderness Defenders clarifies that the NPDES permitting is required for aerial spraying of pesticides. He relayed the Association's concerns that the consumption of partial primacy by the State would further erode the community's "voice" as an Alaska Native Tribe. He opined that the State has not "demonstrated a willingness to listen" to the concerns of tribal members about proposed pesticide spraying on Long Island. Mr. LeCornu asserted this legislation would limit public participation by eliminating public notice of proposed permits. He stated that permits could be issued for spraying near Hydaburg with no notice or opportunity for comment given to residents. He added that public hearings located in Ketchikan, for activities proposed for Prince of Wales Island, would present a hardship for Hydaburg residents wishing to participate. Co-Chair Wilken requested the Department respond to the concerns voiced by the witness. Ms. Ballard responded the matter to which the witness testified is a different, pesticide program, rather than the water discharge program addressed in this legislation. She understood that the concerns relate to the public hearing process for a permit application submitted by the Klukwan Corporation requesting authority for aerial pesticide application on Long Island, near Hydaburg. She informed that Department of Environmental Conservation regulations require that the Klukwan Corporation must hold public hearings, which have not been scheduled and location has not been determined. She also noted that questions of the Department of Environmental Conservation and the Department of Natural Resources must be answered before the application could be accepted. Co-Chair Wilken requested witness contact the Department to resolve this issue. Mr. LeCornu agreed to do so. Co-Chair Wilken ordered the bill HELD in Committee.