9:16:44 AM CS FOR SENATE BILL NO. 144(RES) "An Act relating to regulations, definitions, and permits under the emission control permit program; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. MARY JACKSON, staff to Senator Tom Wagoner, testified that two years prior, the "current reform package" was passed at the request of Governor Murkowski. One portion of that package was intended to streamline the air permit process. However, some deficiencies were discovered. In order to comply with federal regulations, this legislation provides definitions identical to federal definitions. 9:17:56 AM Co-Chair Green understood this legislation would bring State statute into compliance with federal regulations on air primacy and "air permitting". Ms. Jackson affirmed. 9:18:20 AM JOHN KUTERBACH, Air Permits Program Manager, Division of Air Quality, Department of Environmental Conservation, testified he was available to answer questions on this technical bill. He stated this legislation adjusts the definitions adopted two years prior to comply with federal regulations. 9:18:57 AM Co-Chair Green asked the consequence if this legislation does not pass into law. Mr. Kuterbach replied that the Department would be unable to obtain approval of the permitting process from the federal Environmental Protection Agency (EPA). The "critical deficiency" is that the current State definitions identify "who needs an operating permit more narrowly than the federal regulations require." The federal regulations require that multi-stationary sources under single ownership be combined in determining whether a permit is needed. Alaska laws consider each source individually. 9:19:52 AM Co-Chair Green noted that with the exception of a definition change, this legislation amends few words of the current statute. She asked for an explanation of the repeal provision contained in Section 8. Mr. Kuterbach explained the "repeal is the definition of modification." Modification is used "very precisely" in "several federal programs that we're required to implement." These differ slightly for each program. The initial intent was to adopt the correct definition in statute, which was possible for one of the federal program, but not the others. This legislation proposes repealing the definition from statute; another section of the bill would require the Department to adopt language in regulations consistent with the federal program implemented. 9:20:59 AM Co-Chair Green noted the July 1 2005 effective date and asked if the Department would be prepared to implement the provisions of this legislation by that time. Mr. Kuterbach assured this date was adequate. 9:21:18 AM Ms. Jackson stated that initially the Department had requested authority to adopt definitions. Upon discussion, it was determined that establishing the definitions in statute was more appropriate. 9:21:40 AM Senator Olson asked if any party in the private sector has commented on this legislation. Ms. Jackson informed that the Department sent letters to parties that would be affected by this legislation, particularly those who hold mining permits. No responses were received and no concerns were voiced. She personally contacted the Alaska Oil and Gas Association and the Alaska Mining Association, and was told the organizations had no concerns. Co-Chair Green stated that the mining association has a history of providing input on legislation affecting its membership. Senator Olson clarified the Alaska Mining Association has not voiced any objection to this legislation. Ms. Jackson affirmed. 9:22:48 AM Co-Chair Wilken offered a motion to report the bill from Committee with individual recommendations and accompanying fiscal note. Co-Chair Wilken objected to the motion to pose a question. He asked if Mr. Kuterbach is responsible for all air permits issued by the State. Mr. Kuterbach answered he is. Co-Chair Wilken asked if the witness is familiar with the situation involving Husky Lumber in Kenai. Mr. Kuterbach was involved in resolving the issue. Co-Chair Wilken asked if he was satisfied with the analysis of that issue and the resolution reached. Mr. Kuterbach was satisfied the issue has been resolved, although was "sorry that it turned out the way it did in the initial stages and that we didn't catch it earlier." Co-Chair Wilken appreciated the involvement of the witness and the commissioner in resolving the issue. Co-Chair Wilken removed his objection. 9:24:01 AM Without objection SB 144 MOVED from Committee with zero fiscal note #1 from the Department of Environmental Conservation. 9:24:30 AM [Pause on the record.]