SENATE BILL NO. 121 "An Act relating to pollutants; relating to perfluoroalkyl and polyfluoroalkyl substances; relating to the duties of the Department of Environmental Conservation; relating to firefighting substances; relating to thermal remediation of perfluoroalkyl and polyfluoroalkyl substance contamination; and providing for an effective date." 9:10:16 AM Co-Chair Bishop relayed that it was the third hearing for SB 121. The intention of the committee was to hear comments from the Department of Environmental Conservation (DEC) and cover the fiscal notes for the bill. Co-Chair Bishop asked for confirmation that there was currently no mechanism by which DEC could accept, handle, or expose any amount of perfluoroalkyl and polyfluoroalkyl substances (PFAS). 9:11:39 AM TIFFANY LARSON, DIRECTOR, SPILL PREVENTION AND RESPONSE, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, confirmed that there was no currently established infrastructure. Co-Chair Bishop presented a hypothetical scenario in which DEC obtained funding for the Resource Conservation and Recovery Act (RCRA) or for Section 404 of the Clean Water Act (CWA). He asked if DEC would be able to accept PFAS if it received RCRA funding as well as a Subpart C designation [under federal Title 40, Subpart C: Characteristics of Hazardous Waste]. 9:12:53 AM AT EASE 9:13:14 AM RECONVENED RANDALL BATES, DIRECTOR, DIVISION OF HABITAT, DEPARTMENT OF FISH AND GAME, expressed that he would like to defer the question about RCRA. CHRISTINA CARPENTER, DIRECTOR, ENVIRONMENTAL HEALTH, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, asked for Co- Chair Bishop to repeat his question. Co-Chair Bishop repeated his question. Ms. Carpenter replied that she would like to provide a thorough response to the committee at a later date. She explained that RCRA ensured that hazardous waste was disposed of properly. There was no current infrastructure to accept Aqueous Film-Forming Foam Concentrates (AFFF) if it contained PFAS. 9:16:06 AM Co-Chair Bishop asked Ms. Carpenter to research the matter to provide an accurate response to his question. He suggested that if the department was given the RCRA designation, it would have the means to travel around the state to catalogue the contaminated sites. Co-Chair Bishop asked Ms. Larson about the difference between the Environment Protection Agency's (EPA) Title I and Title V air permits. He understood that the state currently operated under Title V. Ms. Larson responded that both permits were currently issued. The bill intended to implement the permitting activity into a Title V process, which took about a year and half longer than a Title I process. She relayed that DEC believed the permitting process was better suited under Title I as it was less time intensive but included the same level of oversight as Title V. Co-Chair Bishop understood that emissions were the same under Title I and Title V. Ms. Larson answered in the affirmative. Senator Wilson referenced the fiscal note from DEC with control code YoiXA, which indicated a need for three additional positions to provide PFAS oversight. He asked how the department would absorb the costs of the new positions in outgoing years, especially considering other positions had been cut in the previous year. Ms. Larson relayed that given the language in the bill, the department would require a total of four additional positions in perpetuity for as long as the statute existed. She thought the legislature held the authority to ensure that the new positions would be funded. Senator Wilson shared his concern about funding sources and thought there were no other funding options apart from unrestricted general funds (UGF). Co-Chair Bishop believed there was a bill in the other body that would help. He indicated that the committee would discuss later in the meeting the Infrastructure Investment and Jobs Act (IIJA) money as it pertained to PFAS. 9:20:48 AM Co-Chair Stedman noted that there was a request for an addition of 233 state employees in the current budget submission. He thought it seemed that the state was exposing itself to a substantial increase in personnel in a single budget cycle. He was concerned about adding more positions in order to oversee PFAS and thought there had to be a better solution. Co-Chair Bishop emphasized that everyone wanted clean drinking water. He referenced discussion around the EPA and asked when the agency would be releasing more information and guidance. Ms. Larson cited that EPA had released its strategic roadmap in October of 2021 on how it planned to address the variety of PFAS compounds. There were many benchmarks that EPA hoped to achieve within the next four to five years. The agency expected to release a proposed rule regarding PFAS in the National Primary Drinking Water Regulations (NPDWR). Sometime in the next few months, a regulated community was expecting to see the results of its research and peer review process and the results would determine whether the methodologies were sound. She noted that the current limits were 70 parts per trillion for a lifetime health advisory, and she had been told that the limits were expected to go down by an order of magnitude to seven parts per trillion or less. She relayed that the approval was expected to be released in August of 2022. 9:24:04 AM Co-Chair Bishop thought that Ms. Larson's prediction on the order of magnitude reduction was accurate considering that IIJA would designate $5 billion specifically to PFAS and other emerging contaminants over the next five years. Co-Chair Bishop asked who would be covering the fiscal notes. Mr. Bates responded that the fiscal notes would be presented by the governing divisions. Co-Chair Bishop suggested beginning with the fiscal note that involved the air quality permit. 9:25:14 AM JASON OLDS, AIR QUALITY DIVISION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, addressed a new fiscal impact note from DEC with the OMB component number 2061 and control code of iVDzt. The fiscal impact note totaled $80,000 to pay for contractual support and three new peer review positions to develop a threshold limit for PFAS. The bill referenced a minimal amount for air quality emissions, and the fiscal note established a threshold under special procedures that would allow DEC to obtain contractual support and peer reviews. He noted that DEC was typically disincentivized from developing procedures that were more stringent than EPA. Co-Chair Bishop understood that the difference between Title I and Title V was the time involved in the process, and that the emissions would remain the same. He asked if he was accurate. Ms. Larson deferred the question to Mr. Olds. Mr. Olds responded that Co-Chair Bishop was correct. There were a separate set of administrative procedures, but the inherent monitoring or emissions associated with a given permit did not necessarily change. He clarified that Title I was a state-only process, whereas Title V included specific rules crafted for the permit process under federal regulations. Co-Chair Bishop asked for confirmation that if the process was to be unchanged and remain under Title V, the department would need $80,000. Mr. Olds relayed that the $80,000 figure was to establish the minimal threshold value in the bill. There currently was no emission limit, and in order to craft the limit the department would have to go through special procedures to develop the threshold value and would need contractual support. Co-Chair Bishop asked if the $80,000 was simply intended to get the department up to speed. He understood that after the contractual procedures had been completed, then the pricing of the permit could begin. Mr. Olds answered affirmatively. 9:28:27 AM AT EASE 9:30:38 AM RECONVENED Ms. Carpenter addressed a new fiscal impact by DEC with OMB component 3202 and control code QaKQo. The Drinking Water Program within the Division of Environmental Health (DEH) under DEC would provide technical and engineering assistance to the Division of Spill Prevention and Response (SPAR) in their efforts to ensure drinking water was safe. She relayed that DEC would require two additional positions to adhere to the requirements of the bill. One of the new employees would be responsible for providing technical and compliance assistance to owners and operators of contaminated public drinking water systems and to SPAR. The second requested employee would be responsible for approving proposed treatments for contaminated drinking water systems. The fiscal note requested the funds for the two positions to help with the work. Co-Chair Bishop asked if Mr. Bates was aware of the IIJA funds. He assumed that DEC would be working with all responsible parties to help individuals who had contaminated drinking water. He understood that DEC would work collaboratively with other entities to apply for IIJA funds in an effort to receive as much money as possible. Mr. Bates wanted to give a brief overview of the State Revolving Fund (SRF) program, which was a low interest loan for communities in Alaska. He elaborated that it was a capitalization grant from EPA for drinking water and clean water funds and was a revolving fund and would grow year after year. The program had been extremely useful in Alaska and successful nationally as well. The eligible entities included municipalities as well as private non-profit utilities that were rate-regulated by the Regulatory Commission of Alaska (RCA). The IIJA funds for SRF would be distributed through existing programs and processes within the SRF program. He reported that $7.54 million per year would be distributed to the state through IIJA for five years. The funds would be used to address emerging contaminants with a specific focus on PFAS in drinking water systems. He assured the committee that the funds were fully subsidized and were considered grants rather than loans because there was no matching requirement. 9:35:26 AM Ms. Larson addressed a new fiscal impact note by DEC with OMB component 3094 and control code YoiXA. The fiscal note was the largest of the notes by DEC and requested four additional SPAR employees who would be conducting the majority of the oversight and monitoring work described in the bill. The majority of the requested $6.3 million would fund the sampling and provisioning of drinking water in communities where PFAS contamination was suspected. A small portion of the fiscal note also requested funds for administrative oversight and the associated costs. Senator Wilson asked if the department could add receipt authority to offset some of the costs. Ms. Larson explained that the department had an obligation to cost recover under statute. However, the entity that polluted they system with PFAS contaminants was usually the party that was required to pay the costs. The state would pay the majority of up-front costs due to the manner in which the bill was written, but it could collect the funds from the polluting entity after contamination had been proven. Co-Chair Bishop thought the bill would also require the state to dispose of up to 25 gallons annually of PFAS contaminated substances for persons domiciled in Alaska. Ms. Larson answered affirmatively. Co-Chair Bishop thought the matter was similar to his earlier question regarding RCRA. 9:37:37 AM Mr. Bates addressed a zero fiscal impact note by DEC with OMB component 3204 and control code OhSKs. He noted that the establishment of concentration limits for PFAS in drinking water as proposed by the bill appeared to act as a maximum contaminant level (MCL). The establishment of MCL might require monitoring and discharge limits for all dischargers where PFAS compounds were reasonably likely to be present. If regulations were necessary, DEC would absorb the costs in the normal course of business as it reviewed permits. Co-Chair Bishop asked for an example of a wastewater facility that would be required to conduct monitoring. He asked if all municipal wastewater systems, seafood processing centers, and similar facilities would be required to conduct monitoring, or would it be applicable only to facilities in communities with known PFAS contaminants. Mr. Bates stated that the bill would apply to the facilities in which DEC reasonably expected to find PFAS contaminants. 9:39:36 AM JOHN BINDER, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, addressed a new indeterminate fiscal impact note for the Department of Transportation and Public Facilities (DOT) with OMB component 530 and control code bUckf. The note would not require operating funds, but DOT projected that it would require about $18 million of capital funds. He explained that the state had already identified approximately 30 airports in the state that were suspected of PFAS contamination due to the presence of AFFF, which was a substance used by airport crash rescue personnel. He reported that DOT had conducted PFAS testing at 10 of the suspected airports. The fiscal note assumed that the 10 airports that had been tested would need to be tested again since one of the compounds in the bill [hexafluoropropylene oxide dimer acid] had not been included in past tests. The results would drive whether a site needed to be characterized as contaminated and provided with new water processes. The department averaged out the costs that had been incurred in the past based on the tests that had been conducted to arrive at the predicted $18 million cost. However, the note was indeterminate because there was no way to know how many sites would need further action. It was possible that several of the suspected airports would not require additional action. Senator Hoffman referenced an Alaska map which showed the locations of PFAS contaminated sites (copy on file). He asked if DOT had the same map. Mr. Binder responded that he was not familiar with the map. He offered to provide a list of the 30 airports suspected of PFAS contamination. Senator Hoffman would appreciate the information. Senator Wilson wanted to verify that the estimated cost was $18 million. Co-Chair Bishop answered "Yes." 9:43:52 AM Co-Chair Stedman referenced Senator Hoffman's request for a list of contaminated sites and thought it would helpful if the top 10 sites were highlighted. Mr. Binder emphasized that DOT recognized that PFAS was undesirable at any of the state's airports. The contaminated airport sites were prioritized based on which sites were closest to communities and drinking water systems. Co-Chair Stedman asked for a list of the top 10 most contaminated airports. Mr. Binder agreed to provide the list immediately following the meeting. 9:45:25 AM AT EASE 9:46:15 AM RECONVENED Co-Chair Bishop asked for both DEC and DOT to provide a list of the contaminated sites ranked in order of severity. SB 121 was HEARD and HELD in committee for further consideration.