HB 51 - REGULATIONS OF DEPT OF ENV. CONSERVATION Number 070 CHAIRMAN HODGINS announced the committee would continue the hearing on HB 51, "An Act relating to the Department of Environmental Conservation." He stated his intention to move the bill out of committee. Number 100 REPRESENTATIVE NORMAN ROKEBERG, sponsor of HB 51, explained he had a proposed committee substitute for HB 51, Version K. He moved to adopt CSHB 51, 0-LS0091\K, Lauterbach, 1/29/97. CHAIRMAN HODGINS asked if there was an objection to the adoption of the committee substitute. Number 243 REPRESENTATIVE SCOTT OGAN objected for the purposes of comparison and discussion. Number 260 REPRESENTATIVE ROKEBERG called upon Bruce Campbell from the office of Representative Pete Kelly, a prime cosponsor of the bill, to explain the differences between the original HB 51 and Version K. Number 286 BRUCE CAMPBELL, Legislative Assistant to Representative Pete Kelly, Alaska State Legislature, had been asked to review comments provided in the last discussion, particularly those of the Department of Environmental Conservation (DEC), the Department of Fish and Game (ADF&G) and the public. He explained differences between the two bill versions. In Section 2 of the original bill, there was language about "economically feasible" that required the DEC to hire several economists. That language had been deleted. Currently, Section 2, page 1, reads that the department may not adopt a regulation under this section unless the regulation is based on science. MR. CAMPBELL said part (c), defining "background condition," had also been added in Section 2. This seemed to be a point of concern for the DEC. A definition had been brought in from the state of Washington, and this was briefly reviewed by the DEC. Mr. Campbell believed the definition would help the DEC in their regulation writing process. MR. CAMPBELL informed the committee that Section 3 is unchanged. He referred to the Governor's news release dated January 24, 1997, included in the committee files. Mr. Campbell said the Governor is asking for the same thing and is promoting the Minerals Commission recommendation that the state assume primacy for the National Pollutant Discharge Elimination System (NPDES) Permit Program. Mr. Campbell stated, "So, we have clear support for that, we believe, from the Administration." Number 449 MR. CAMPBELL referred to Section 4, number (4), on page 2, line 25, and said the Resources Defense Council noted, at the previous committee meeting, that some of the language was confusing. The Department of Fish and Game also suggested adjusting language in their written comments. The Minerals Commission Report further noted there was confusion over the use and construction of the phrase "receiving water". Mr. Campbell explained that in trying to produce some carefully crafted language, verbatim comments from the Minerals Commission had been combined with some of the comments from the Department of Fish and Game. He pointed out this was probably the most substantive change from the original bill, Version B, to the committee substitute, Version K. The latter clearly states, "may not require water discharged by a user to be of higher quality than the natural condition of the water receiving the discharge". MR. CAMPBELL noted there had been confusion as to whether it was the water the discharger received to use in a plant or mill, or the water at the discharge point. Pulp mills in salt water receive fresh water in their processing but discharge into salt water. The discharge point is the point of issue and reference here, he emphasized. That is modified by language from the Minerals Commission Report. Mr. Campbell said in talking with water quality experts, he believes this will greatly assist the DEC in development of regulations. Number 578 MR. CAMPBELL explained that page 3, lines 29 and 30, Section 4, adds a new section (f), which refers to the background condition mentioned in Section 2. He believed the remaining portions of the bill are unchanged from the version referred to the committee. Number 614 REPRESENTATIVE ROKEBERG asked when the Alaska Minerals Commission Report was issued. MR. CAMPBELL responded it was a 1997 report released within the last couple of weeks. He believed everyone's office received the report. REPRESENTATIVE ROKEBERG asked Mr. Campbell to discuss technical amendments that Representatives Rokeberg and Kelly were proposing. He noted there was a series of technical changes from the recommendations of the ADF&G, which they wished to offer as Amendment 1. REPRESENTATIVE OGAN pointed out there was a motion on the table to accept the committee substitute. He noted that he had objected for the purpose of discussion. CHAIRMAN HODGINS advised there was a proposed committee substitute before the committee. Number 738 REPRESENTATIVE KEMPLEN stated he received a copy of a letter from the DEC, dated January 30. He expressed uncertainty as to whether the committee substitute, as presented, addressed the concerns raised by the DEC. Number 780 MR. CAMPBELL responded, "It's not in the letter I've seen. It's my understanding it was presented to the chairman seconds ago, and so I'm not aware of the letter. And we may have, in fact, addressed those concerns, but because it was not in a timely fashion, I cannot answer that question unless I at least see a copy of the letter here." CHAIRMAN HODGINS agreed the letter wasn't delivered in a timely manner. He himself had not had a chance to review it. He cautioned the committee to deliberate on what was before them at that point. Number 822 REPRESENTATIVE KEMPLEN referred to a survey he conducted in his district asking questions about issues that would probably be before the legislature. One question he asked was whether "Regulations should be changed to reduce water quality standards." Representative Kemplen said 65 percent of his constituents were opposed to that statement. He believed uncertainty existed about the impact of the proposed changes. Representative Kemplen said he would like to be sure the uncertainties were dealt with before moving forward with the legislation. CHAIRMAN HODGINS explained the normal course would be to put the committee substitute before the committee; they were still in that stage. He stated it would be appropriate to bring the committee substitute before the committee and then address the proposed amendments. Number 931 REPRESENTATIVE JOE RYAN made a motion to adopt the committee substitute for the purpose of discussion. REPRESENTATIVE OGAN objected for the purpose of discussion. He still had a question he would like answered before the committee substitute was accepted. Representative Ogan asked for an explanation, from the DEC and the sponsors, of changes in Section 4. He wanted to know the technical differences between water being of higher quality than background conditions and the new language of water receiving the discharge. MR. CAMPBELL responded that the language was compiled from several comments. He noted there were no written or substantive specifics from the department other than a review one or two weeks ago. Mr. Campbell stated, "I do not believe they changed discharge standards, but they helped define a logic loop that has become a problem in -- for the department. First off, it's clear that they're not requiring discharge by a user to be of a higher quality than the natural condition of the water receiving the discharge." For example, if a person were using water on the Mendenhall River and it was muddy, that provided the background number for the operation. If operating in salt water, there would be a salt water discharge number, not a fresh water discharge number. It did not, however, impact uses within that water body. MR. CAMPBELL indicated that was fairly well explained by language following the semicolon on page 2, line 26, "if the available evidence reasonably demonstrates that the natural condition of a body of water does not meet the standards contained in the water quality criteria". He said an example would be where water has natural conditions that would not allow that natural water to meet water quality criteria. Mr. Campbell continued reading from the bill, "under regulations of the department and the natural condition maintains and protects the existing uses of the water". He explained, "So, if the water quality does not meet the water criterion applicable to that water under regulations of the department, and the natural condition maintains and protects existing uses in that water body, then the natural conditioning of the body of water constitutes the criterion and must be met by the - met by the discharger into that body of water." MR. CAMPBELL stated the key phrase is that the natural condition maintains and protects existing uses in the water. Uses in salt water were different from uses in fresh water. In some cases those standards are lower, and in some cases those standards are higher. He stated, "But we're saying it's those uses in the discharge water that become the uses that determine which standards of criteria are implemented by DEC. And this helps DEC dramatically in determining a logic loop they've created in their regulatory definition of `natural condition,' where they're not allowed to discharge anything but pristine, crystalline water into areas that are not pristine, they are muddy or they have natural conditions such as high arsenic in Fairbanks ...." Mr. Campbell noted it is a bit complicated, but only because of problems created over the past 10 or 15 years in this field. Number 1187 REPRESENTATIVE OGAN asked if that language was based on another model. MR. CAMPBELL replied yes. He referred to the Minerals Commission Report, page 2, and explained, "They are recommending in dealing with water and natural conditions, they insert this language, `If available evidence reasonably demonstrates that the natural condition of a water body is of lower quality than a water (indisc.) criterion,' they -- they list for use classes in [18] AAC 70.020(b). Our drafter said, `Well, yes, this is nice, but you can't cite a regulation in code, which makes sense to us but not necessarily to the Minerals Commission. And so we have just simply said, in lieu of that, `under regulations of the department.'" MR. CAMPBELL noted that ADF&G's letter also identified this as an area of concern. The ADF&G proposed modifying the first phrase, "water receiving a discharge". Mr. Campbell explained, "They used slightly different words, but in discussions with our drafter, we thought this was the clearest language to say `water receiving a discharge.'" REPRESENTATIVE OGAN stated his belief it was good public policy, when accepting a committee substitute, to debate it before acceptance. CHAIRMAN HODGINS said he concurred with Representative Ogan's concerns. Number 1291 REPRESENTATIVE RYAN moved to adopt the committee substitute for discussion purposes. REPRESENTATIVE KEMPLEN objected. A roll call vote was taken. Representatives Hodgins, Ogan, Rokeberg and Ryan voted in favor of adopting the committee substitute. Representative Kemplen voted against adopting the committee substitute. So CSHB 51 was adopted. REPRESENTATIVE RYAN indicated he would like to speak to a representative from the DEC regarding their letter. Number 1339 CHAIRMAN HODGINS called for a brief at-ease at 10:25 p.m. The meeting was called back to order at 10:26 p.m. REPRESENTATIVE ROKEBERG indicated Mr. Campbell had amendments for the committee to review. He asked Mr. Campbell to distribute Amendment 1, generated from Representative Kelly's office, which read: Amendment: from ADF&G written comments. Before: House Oil & Gas Committee Page 2, line 21. Following "shall consider" Insert: "reasonably available information on" Page 3, line 24. following "(e)" Delete: "The" Insert: "Except as otherwise provided in AS 46.03.087, the" Page 4, line 14. Following "consider" Insert: "and prepare a written finding assessing" Page 4, line 15. Delete: "and prepare written findings" MR. CAMPBELL explained that an excellent letter had been received from ADF&G the day before, in time for an amendment but too late to meet drafting deadlines for the committee substitute. He emphasized that Representative Kelly wanted to compliment the ADF&G for providing timely, productive and constructive comments. Number 1457 REPRESENTATIVE ROKEBERG moved that Amendment 1 be adopted. MR. CAMPBELL discussed Amendment 1. On page 2, line 21, following "shall consider", it inserted "reasonably available information on". Mr. Campbell said this was a good point brought up by the ADF&G. He stated, "There is only a limited amount of background data available, and if they have to consider every water body without information, it doesn't do them much good. And so this would allow the individual applying to provide them some information, so it would be readily available to them. It would allow the department, if they knew of other background data, or if the Division of Water in the Department of Natural Resources provided some background data, they would have a reasonably (indisc.) of information of which to base their discussion on naturally occurring pollutants." MR. CAMPBELL continued with Amendment 1. On page 3, line 24, following "(e)", it deleted "The" and inserted, "Except as otherwise provided in AS 46.03.087, the". Mr. Campbell believed this to be a logical addition to the bill because the new language being created in AS 46.03.087 does not override part (e). MR. CAMPBELL continued with Amendment 1. On page 4, line 14, Section 2, following "consider", Amendment 1 added, "and prepare a written finding assessing the technological feasible of the proposal". On page 4, line 15, Amendment 1 deleted, "and prepare written findings". Mr. Campbell explained these improved the language of the bill. Number 1607 MAC MCLEAN, Representative, Division of Habitat and Restoration, Department of Fish and Game (ADF&G), testified via teleconference from Fairbanks. He noted he was standing in for Geron Bruce. He said the ADF&G accepts the amendments, which reflect the intent of ADF&G's letter forwarded to the committee. Number 1640 CHAIRMAN HODGINS asked if there were questions or discussion on Amendment 1. He asked if there was any objection. There being no objection to Amendment 1, it was adopted. REPRESENTATIVE ROKEBERG offered Amendment 2, which read: TO: CSHB 50\K DATED 1/29/97 PAGE 2, Line 7 after "shall": DELETE: "seek and maintain" INSERT: "continue to investigate the feasibility of securing" REPRESENTATIVE ROKEBERG noted that Amendment 2, relating to Section 3, was intended to authorize the state of Alaska to continue to investigate the potentiality of taking over, from the federal government, the National Pollutant Discharge Elimination System (NPDES) permitting process. "This gives the department statutory authority to seek this," he explained. As was pointed out by Mr. Campbell, the committee had page 2 of the Governor's press release. Representative Rokeberg read from the press release, "Commerce Commissioner Hensley, whose staff provided the administrative and professional support for the Alaska Minerals Commission, says it is recommending that the state should take control of the federal National Pollutant Discharge Elimination System program to simplify the permit process. At present, a federal agency based in Seattle runs the program. The commission believes the process would be more efficient if it were operated by Alaskans. The water quality standards would remain subject to federal approval." REPRESENTATIVE ROKEBERG believed this should be a great help to the DEC and the state in providing statutory authority. He added, "Maintaining this particular section of the bill, Mr. Chairman, should not have a fiscal note responsibility under the nature of it's draftsmanship and intent. However, I don't believe it is really under the purview of this body, as a committee, to review that particular amount of money which is contained in the attached fiscal note, because the bill has further referral, including the Finance Committee, which will deal with those particular issues. In my opinion, there is no requirement under the way this bill is drafted to have that approximately $3.2 million fiscal note. That's not the intent of this particular language. But I believe the Amendment 2, as offered, helps clarify that somewhat, so I would ask for committee approval." Number 1819 CHAIRMAN HODGINS noted the motion to accept Amendment 2 and asked if there were questions. Number 1825 REPRESENTATIVE OGAN inquired what the ramifications are. He asked whether the federal government currently has primacy over this issue. REPRESENTATIVE ROKEBERG indicated they do presently. REPRESENTATIVE OGAN indicated he was not sure what the language does. REPRESENTATIVE ROKEBERG pointed out the language allows the department to continue investigating the feasibility of securing federal approval, under the federal Clean Water Act, of the state's permitting program to provide these permits. Representative Rokeberg read from line 11, "If, at any time, the department determines that statutory or (conjunctively) budgetary changes are necessary to obtain or maintain federal approval of the state's program under this subsection, the department shall notify the legislature through the governor." REPRESENTATIVE ROKEBERG explained, "In other words, we're giving them a free hand to implement what is the Governor's policy to pursue this. Now, if it's going to require substantial monies to do this, then they need to come to the legislature and ask for budgetary authority." This language in and of itself only gives them authority, he said. It does not mandate that they go forward. Therefore, there should be no fiscal note. But it does give them clearance to seek this approval, which is optional under the Clean Water Act. Number 1920 REPRESENTATIVE KEMPLEN said he believed Representative Rokeberg did a good job with Amendment 2 and that it is a step forward. Number 1942 CHAIRMAN HODGINS noted Amendment 2, as proposed by Representative Rokeberg, was before the committee. He asked if there was an objection. Hearing none, he advised that Amendment 2 was adopted. CHAIRMAN HODGINS opened the meeting up for public comment. Number 2000 GERSHON COHEN, Executive Director, Alaska Clean Water Alliance, testified via teleconference from Haines. He referred to Section 1 and said it creates a new mission for the DEC. He cited AS 46.03.010(a), relating to the Declaration of Policy, and read it to the committee members: "It is the policy of the state to conserve, improve and protect its natural resources and environment, to enhance the health, safety and welfare of the people of the state and their overall economic and social well-being." MR. COHEN also read AS.03.010(b): "It is the policy of the state to improve and coordinate the environmental plans, functions, powers and programs of the state to the end that the state may fulfill its responsibility as trustee of the environment for the present and future generations." Mr. Cohen explained that in contrast, HB 51 would mandate the degradation of Alaska's water quality by weakening the standards that control pollution, just because a member of the private sector wants to reduce the cost of treatment for the waste they discharge into waters that belong to all Alaskans. MR. COHEN referred to Section 2 and said he supports the removal of (2)(b)(1). He said Section 087(b)(2) would seem to have a similar affect on state law. Alaska's Water Quality standards are, by definition, statewide in their application, and they should not be modified because of the impact that they have on an individual discharger. He said individual issues would be more properly addressed by the state's existing site-specific criteria regulation, 70.035. Mr. Cohen said the Clean Water Act already takes economic factors into consideration, but does so in the context of the attainable uses of the water body, the adoption of industry-wide performance standards based on specific water quality criteria and technically achievable treatment methods. These standards are not intended to have zero impact on all members of an industry. They were adopted after a thorough analysis of the technical and economic potential of the industry to reduce pollution, and they reflect the ability of a majority of players in an industry to meet the standards. Mr. Cohen said to require that the regulations are so economically feasible for a person (indisc.) governed undercuts the primary purpose of the standards and the department's mission to prohibit pollution that could adversely impact the public's health and welfare and protect natural resources of the state. MR. COHEN referred to Section 2(c). He said substituting the term "background condition" for the existing term "natural condition" must be opposed. He stated, "Current water quality standards, as I said above, already addresses the issue of natural background in the site-specific criteria section, 70.035. And it is, by the quote in the definition, of the conditions existing in a water body prior to any human-caused influence. There is no definition for `background condition' in the state's regulations. As described in 2(c), water quality lowered as a result of human action, either by a previously permitted mixing zone or an unpermitted discharge, would then constitute lower background conditions, granting a new discharger permission to release more pollution because a previous discharger lowered natural water quality. It would essentially authorize a mixing zone for the new discharger without any review of the appropriateness of further increasing the pollutant loading in the water body. In addition to inappropriately increasing the volume of polluted water, this provision would violate the intent of the mixing zone regulation, 70.240, the provisions requiring an evaluation prior to the authorization of multiple mixing zones. Although language has been inserted regarding discharges into already disturbed watersheds, the term `disturbed watershed' is undefined." Number 2197 MR. COHEN referred to Section 4 and said he wasn't clear on it after hearing Mr. Campbell's comments. "It seems like we're going back and forth here now between natural and background conditions," he explained. "The section, as it's written, violates the most fundamental tenet of the Clean Water Act. It calls for an end to (indisc.) toxic discharges into waters of the United States. As stated above, waters that either were legally or illegally polluted in the past by human activity should not become the standards of the future discharge of toxic materials." CHAIRMAN HODGINS said he would grant Mr. Cohen another minute to finish up. MR. COHEN referred to Section 4 and said HB 51 establishes the requirement that implementation of water quality standards be based on scientific and technical evidence. "But this direction is directly undermined by the requirement that ADEC complete their technical findings, economic evaluation and drafting of regulatory language within 90 days," he stated. "It would be unlikely that the ADEC could complete the mandated review for any single regulation in a 90-day time period. It takes multiple applications. This language would render ADEC's review process meaningless." MR. COHEN referred to Section 46.030.087(a)(2) and said the federal government has adopted very few water quality standards and particulars with regard to aquatic life. As a result of these procedures, it would be very difficult for the state to adopt or to maintain regulations where no federal standards for criteria exist, since the adoption could be interpreted as the taking of a more stringent position than the federal standards. As a result, the state's water and all who depend upon them will be extremely vulnerable to the impacts of toxic discharges." MR. COHEN explained (a)(3) arbitrarily authorizes the power to the state that belongs to the federal government, such as the right to approve the testing methods used for compliance of permit limitations. "Alternative testing methods proposed by the state must be approved by the EPA," he said. "In conclusion, rather than simplifying the permitting process, this legislation will lead to greater and confusion and litigation. Water quality standards are statewide regulations. How will ADEC choose the specific conditions to apply to standards, (indisc.), when approached by an individual discharger, when conditions vary dramatically across Alaska? Does the legislature intend to lower the statewide (indisc.) to the lowest condition that occurs for a given parameter anywhere within the state's waters?" Number 2276 CHAIRMAN HODGINS called for an at-ease at 10:45 a.m. The meeting was called back to order at 10:46 a.m. CHAIRMAN HODGINS noted Representative Rokeberg had questions for Mr. Cohen, and he asked that responses be brief. He advised Mr. Cohen that he could submit written comments that would be included in the bill packet. Number 2292 REPRESENTATIVE ROKEBERG asked Mr. Cohen how many members are part of the Alaska Clean Water Alliance. MR. COHEN stated their membership comes from all over the state. He indicated he couldn't give an exact number. Mr. Cohen noted the alliance is supported by organizations and individuals that represent conservation, public health, fishing, Native rights and subsistence interests. REPRESENTATIVE ROKEBERG asked if there were more than three members or less than six. MR. COHEN said it was considerably more than six. REPRESENTATIVE ROKEBERG asked Mr. Cohen if the state of Alaska has ever issued a site-specific permit. MR. COHEN responded that he believes they have. REPRESENTATIVE ROKEBERG replied, "I don't think they have, as a matter of fact. I think Red Dog's still looking for theirs. Also, you should be aware that your comments about not being able to adopt more stringent requirements was in HB 342, which was vetoed by the Governor, and that was one reason he vetoed the bill, 'cause it allowed the DEC to adopt more -- less stringent requirements, you might be interested to note. Plus, your testimony is incorrect about having to adopt things within 90 days. There's a lot of misinformation and misunderstanding about what the bill's intent is. It only indicates that when a petitioner comes forward that the department must take action within 90 days, either to adopt the federal standard and/or start the process through the Administrative Procedures Act, which could take as long as a year, and allow public comment to adopt a regulation." Number 2381 DWIGHT HALES was next to testify via teleconference from Haines on behalf of himself. He asked the committee to consider the issue of "background conditions." In his view, the definition of "background conditions" is critical. He asked the committee to be cautious in what they allow, saying, "for of course you don't want to craft a dirty-water loophole into a bill intended to protect the children and adults of Alaska who might be taking (indisc.) toxins into their bodies. For example, a pre-existing mixing zone shouldn't become the basis for justifying additional discharges, which then can be used to justify still more discharges, and so on." Mr. Hales believed economic considerations should always remain secondary to health, fish and game considerations, particularly with so much statewide dependence on subsistence. "And these health, fish and game considerations are typically based upon sound scientific evaluation, whereas economic considerations often have other reasons for their being," he explained. Mr. Hales concluded by saying, "With the desire to encourage the state in the interest of efficiency to assume the administrative burden of NPDES, I would question whether the state can assume this additional administrative burden in the light of recent and serious budget cuts. It is the very department responsible for undertaking such a burden." Mr. Hales said the apparent desire was to so weaken the department that it would be ineffectual. TAPE 97-3, SIDE B Number 017 CHAIRMAN HODGINS noted that any written testimony provided would be included in the bill packet. He asked if anyone else on teleconference wished to testify. He then asked Susan Schrader to come forward and give her testimony. SUSAN SCHRADER, Executive Director, Alaska Environmental Lobby, came before the committee to testify. She indicated the Alaska Environmental Lobby is a coalition of 22 environmental groups and represents over 10,000 Alaskans who have concerns with conservation issues. She read her statement into the record: "Once again, Alaskans are having to come forward to defend our basic right - our right to access clean water for our families to drink, to recreate in, and to use for our economic benefits. "I do need to mention that the public process has been made a bit more difficult today by the fact that the new version of the bill was not available until just moments ago, and we also did not have the benefits of any prior warning of amendments. And I think once again, this points out to the public that the legislative process is not always particularly friendly to the public process. "I grew up in Cleveland, Ohio, back in the days before the Clean Water Act. My father did not allow myself and my brothers to swim in Lake Erie. We didn't eat the fish from Lake Erie that we caught. I was there in Cleveland when the Cuyahoga River, the butt of many jokes, caught fire. "But I'm not joking when I state that industry will not, without strong governmental oversight, necessarily do `the right thing' when it comes to protecting water quality. It happened in Ohio. It's going to happen here in Alaska. It has already happened here in Alaska. Each industry along the banks of the Cuyahoga surely would have maintained that they could not `afford' the cost to clean up their discharges, that it may not have been economically feasible. Each industry along the banks of that Cuyahoga River that caught fire would probably see no reason why they should attempt to clean up their discharges, to bring their discharges up to standard, since the water they were getting from upstream was already badly polluted. Each industry along the banks of the Cuyahoga probably would really have loved the language that this bill presents for natural background and as it's been redefined for background conditions. "But Alaska is not Ohio in 1969, so why are we attempting to weaken the ability of DEC's mandate to protect, conserve and improve our water quality in this state? Industry will be able to deal with water quality standards in Alaska that might be higher than federal standards. They'll be able to handle that. DEC has bent over backwards to work with industry, and we heard a lot about this last week. A simple example would have been Mr. Conway's description of how they work with placer mining to come to grips with the problem of the high background arsenic levels. This is workable. We don't need this legislation to interfere. By continuing the yearly deep budget cuts that are directed at DEC, and by attempting to continue to pass legislation such as this, the legislature is really trying to hamstring our resource agencies from fulfilling their missions. And obviously the public is getting the impression that the short- term economic gains for industry, the friends of the legislators, is of much more importance to this body than is the productive, healthy water of our state that can be used by families of Alaska now and in the future." Number 162 REPRESENTATIVE OGAN asked whether the Cuyahoga River borders any other state boundaries or goes exclusively through Ohio. MS. SCHRADER indicated it runs exclusively through Ohio. REPRESENTATIVE OGAN said, "You know, you were talking about your comment about the background water. So if this law was in place, if the water was pure at the head waters, that the first plant down water -- downstream would be getting pure water and they would required to -- that background water -- you could discharge water equivalent to that background water. Is that correct? So as you work your way down the stream, as long as the guys upstream are abiding by the law, then the water shouldn't be any dirtier downstream. Is that correct?" MS. SCHRADER replied, "Yes, and in a perfect world, that is exactly how my understanding is of the process, how it would work. I guess the concern comes from many factors that, since I am not a water quality expert, I don't know. But certainly one big one would be non-point pollution sources, where those headwaters, as they flow down, would be being polluted from many small, cumulative sources that no one could go in and particularly say, `You need a permit or you need a permit.' And that's what happens, is the water when it is received by the first big industry is not particularly pure." REPRESENTATIVE OGAN commented that as long as everyone abided by the law, the water would not be made dirtier by people who had these permits and abided by the law. Number 234 REPRESENTATIVE ROKEBERG said the Federal Clean Water Act and its various permutations were really the reason the Cuyahoga River and many other rivers had been cleaned up in this country. He asked Ms. Schrader, "But are you aware that the nature of this bill, the thrust of this bill, is to make sure that we are no less than federal requirements and then, obviously because of the primacy of federal law, we have to meet those at any rate? And that that is the thrust of this legislation?" MS. SCHRADER indicated she was aware of that. Number 263 REPRESENTATIVE RYAN asked whether Ms. Schrader was familiar with Lakewood, Ohio, and noted he grew up there. MS. SCHRADER indicated her father had a medical practice there. REPRESENTATIVE RYAN said if you go thirty miles up the Cuyahoga, you can catch some of the nicest fish in the world. He explained that a large chemical company there used to "dump stuff" in the river. He asked, "That chemical company, taking in water from the upstream source and discharging it back into the river in the same condition they got it from the upstream source, would that not be an ideal, using the water for whatever purposes, putting it back the way it was when they got it?" MS. SCHRADER agreed that would certainly be the ideal. REPRESENTATIVE RYAN explained he used to have a air service in the Interior, flying in miners. "And they were required to take water in that was glacial silt and mud and so forth and turn out drinking water standards," he said. "So pretty soon, they quit mining. And of course I went out of business, and now I'm down here." He speculated perhaps the environmental community should have thought about that and left him flying in the Interior. REPRESENTATIVE RYAN said Ms. Schrader feels HB 51 is weakening standards. He asked, "What portion do you see that's setting a standard, and saying this is a criteria you have to meet, rather than leaving an arbitrary and capricious standard that DEC can apply to anyone, under any circumstance, anytime they feel, with whatever time limit they would like to use? What is so wrong with setting something and saying, `Here is the time you have to operate, here is the condition you have meet, and then we'll go on, rather than the way it is now?" MR. SCHRADER believed the key is flexibility. She much preferred to see that the trained scientist and experts at the DEC have the flexibility to consider an individual permit, a site-specific criteria, et cetera, rather than the legislature coming in with broad and perhaps ambiguous legislation, which she believed deprives the DEC of the flexibility to work out the best possible solution with individual permittees. Number 372 REPRESENTATIVE KEMPLEN referred to a point made by Mr. Hales from Haines regarding a background condition, where Mr. Hales mentioned the possibility of a pre-existing mixing zone used to justify more pollution. Representative Kemplen asked if that was something Ms. Schrader saw as possible under this proposed legislation. MS. SCHRADER said she shares Mr. Hales concerns with respect to the mixing zones. "That's a very large concern of my member groups," she added. Number 444 DOUGLAS MERTZ, Prince William Sound Regional Citizens Advisory Council (PWSRCAC), came before the committee to give his testimony. The PWSRCAC is an organization composed of municipalities, environmental citizens and business organizations within the area affected by the Exxon Valdez oil spill. Mr. Mertz explained, "The Prince William Sound RCAC has some real concerns about the bill, but its problem is that it has not been able to determine how it fits in with its bottom line, which is, quite simply, the on-the- ground affect of this legislation on water quality and other concerns in Prince William Sound and the other affected areas." MR. MERTZ noted that people had not had time to review the committee substitute or the amendments adopted that day. He urged that the bill be held over to allow time to analyze the bottom-line effect. He also asked that an additional referral be requested, either to the House Resources Committee or another committee with a broad purview. Number 512 MARIE SANSONE, Assistant Attorney General, Natural Resources Section, Civil Division, Department of Law, came before the committee to remark on the technical drafting of the bill. She noted the department's substantive concerns were reflected in the letter from the DEC. She explained the title of the bill says it is an act relating to the DEC, which is a very broad title and may not give adequate notice of the contents of the bill, in that the contents refer mostly to regulations and permitting. "This could be a constitutional problem and an issue that should be discussed with the drafting attorney," Ms. Sansone advised. "When a title is not adequate, or does not give adequate notice, it's possible that the entire bill can be later invalidated by a court. So even though it's a technical issue, it is very important." MS. SANSONE stated, "Another concern we noted in the way the bill was drafted was that the background condition section, which is very contentious, or has a number of issues that would need to be evaluated, that was placed into Alaska Statute 46.03.020, which concerns the DEC's powers as a department. This material, however, goes more to water quality regulations, so it seems to be out of place ...." Ms. Sansone suggested the drafter of the bill might give some attention to whether that was in the right section. MS. SANSONE also noted concern with the term, "state bodies of water." She referred to page 3, lines 1 and 2, of the current committee substitute. She explained, "The issue of (indisc.) waters for purposes of permitting or regulation can be very contentious and subject to a great deal of litigation because the Federal Clean Water Act covers navigable waters or waters of the United States. Our state regulations apply to waters of the state. So to have a proper definition is important. There is a definition in state law, at [AS] 46.03.900(35), of waters that are state waters. And that's something that would want to be looked at." MS. SANSONE said another concern involved use of the terms "hydrologic conditions" and "discharge characteristics," which appear now on page 4, lines 17 and 22. Ms. Sansone explained, "The phrase `hydrologic conditions' is not used in the water quality laws all that much. The Clean Water Act, all of the federal regulations that implement the Act, all the state regulations are concerned with what are the physical, the chemical and the biological characteristics of the water. Hydrologic characteristics are only one aspect of physical characteristics. That term normally refers to the water cycle of precipitation and then infiltration into the ground stream flow and then evaporation. It would not cover all the physical characteristics of the water, and it would not cover all the characteristics that the regulatory agencies would look to in preparing a water quality standard or implementing it. So that we see that term as problematic." Number 760 CHAIRMAN HODGINS noted the arrival of Representative Con Bunde, who arrived at 11:08 a.m. MS. SANSONE continued, "The other problem in those lines is the term `discharge characteristics.' The discharge characteristics could mean the wastewater discharge that's coming out of the pipe or -- discharge is also used in the field of water regulation to refer to stream flow. The stream flow is the discharge in the stream. So that term could also mean, for example, the volume of the water, the rate of flow, the characteristics of the stream, but not the wastewater. So we felt that the term was susceptible to two different meanings and could cause a lot of problems in implementation." Ms. Sansone added that seemed to be a drafting problem. She emphasized she was addressing technical and drafting considerations rather than substantive merits. Number 769 REPRESENTATIVE ROKEBERG said the term "hydrologic" was inserted in the previous session's Senate bill by Senator Loren Leman, a hydrologic engineer. Representative Rokeberg said, "I'd like to point out that I'm pleased that the Department of Law has taken an interest in this legislation, and I would promise you that we will address some concerns that we're able to as the bill moves along ...." REPRESENTATIVE ROKEBERG referred to the NPDES Permitting Program and stated his understanding that the department is currently pursuing that program and studying it. He noted in testimony the committee received from the department the previous Tuesday, it was stated that they had issued a contract for $25,000 to look at administrative changes that would be necessary to take over the NPDES Program. Number 857 REPRESENTATIVE ROKEBERG stated there were concerns raised about public input and the ability to speak to this bill. He said basically, with very few changes, the bill was the same as HB 342, which passed the legislature last session. He expressed pleasure that on its reintroduction, the bill had generated statewide interest from all segments of industry, the public and the environmental community. He believed this was an important issue. Neither he nor Representative Kelly, as sponsors, wanted to jeopardize the quality of Alaska's water. He stated, "The intention of this bill, Mr. Chairman, is to bring the balance to the application of federal and state standards to both the public and businesses in the state that are endeavoring to do business. We need more a level of certainty in what we do up here, and there seems to be an ongoing level of confusion and inability on the part of our paid-for and hardworking bureaucracy, but they just don't seem to be getting their act together." Representative Rokeberg said the legislature is the policy-making body of the state and represented the people. He believed ad hoc small groups and legal defense funds should not be making public policy in this state. Number 945 REPRESENTATIVE ROKEBERG made a motion to move the committee substitute for HB 51. REPRESENTATIVE KEMPLEN objected and said there were a couple of fiscal notes. REPRESENTATIVE ROKEBERG modified his motion by adding the two fiscal notes as they were. He believed the House Finance Committee would be an adequate forum, although that day's testimony warranted the removal of some $3.2 million as far as the NPDES permit was concerned. "I'll leave that to the will of the committee," he stated, indicating he did not mind moving it as-is. Number 987 REPRESENTATIVE KEMPLEN referred to that day's testimony, which had produced serious concerns in his mind that the committee was perhaps moving forward too quickly. People had not had an adequate opportunity to review the amendments or the committee substitute. Representative Kemplen indicated concern that the people of Alaska were not getting adequate notice of the proposed changes. REPRESENTATIVE KEMPLEN believed the issues being raised are significant. He stated, "In particular, the one about the background condition still produces uncertainty as to whether or not that it is an appropriate public policy. The item of the 90- days' review certainly appears to add more paperwork to the bureaucracy ...." Representative Kemplen believed the intent of the proposed legislation was admirable. "We do need to Alaskanize our water quality regulations," he said. "It doesn't make sense to me, when we have glacial silt, to be, you know, producing absolutely clean water at the end of some sort of production or manufacturing or mining process." Representative Kemplen referred to the Red Dog Mine and said he saw no reason why that particular industry needs to clean up that water, when the natural condition is, to a great extent, already polluted. He stated his hope that the committee would hold the bill for further discussion so those concerns could be met. Number 1143 REPRESENTATIVE ROKEBERG pointed out that the committee process, in large part, should overcome some of the concerns suggested by Representative Kemplen. "There will be more than adequate opportunity for the public to testify," he said. He noted there was more than 45 minutes left in that meeting and that there had been previous hearings. He said there was no intention to shut the public out. REPRESENTATIVE ROKEBERG thanked the DEC for responding in writing to the committee's requests. Unfortunately, the committee had not received the department's response in adequate time to be able to integrate it in the testimony that day. Number 1247 REPRESENTATIVE RYAN said he had an objection to the fiscal note from the Habitat Division of the Department of Fish and Game. If he recalled correctly, in the last two budget cycles that particular division had "almost been put away, but it seemed to have more lives than a cat." He did not see any justification for the amount of money they were asking for a biologist, $188,000. Representative Ryan said he would like to move that the committee make a zero fiscal note and send that forward with the bill. REPRESENTATIVE BUNDE pointed out there was already a motion on the floor. REPRESENTATIVE RYAN said he would amend the motion to make the fiscal note from the Habitat Division a zero fiscal note. REPRESENTATIVE OGAN said he believed the mover of the first motion would have withdraw his motion in order to take up Representative Ryan's motion. CHAIRMAN HODGINS said the committee had to deal with the first motion. If it was defeated, then Representative Ryan could make his motion. He noted that Representative Rokeberg had said there would be close scrutiny of the fiscal notes in the House Finance Committee. REPRESENTATIVE RYAN withdrew his motion for a zero fiscal note. CHAIRMAN HODGINS noted the motion before the committee to move CSHB 51, as amended, out of committee. He asked if there were any objections. REPRESENTATIVE KEMPLEN objected. Number 1317 A roll call vote was taken. Representatives Hodgins, Bunde, Rokeberg, Ryan and Ogan voted in favor of moving the bill. Representative Kemplen voted against moving the bill. So CSHB 51(L&C) moved out of the House Special Committee on Oil and Gas.