SB 116-EMISSION CONTROL PERMIT PROGRAM  COMMISSIONER ERNESTA BALLARD, Department of Environmental Conservation (DEC), provided the following description of SB 116. This legislation is a proposal to streamline the permitting process. Over the last 30 years, much has been learned about the environmental and health hazards associated with air pollution, emission control technologies, air modeling and, most importantly, about the necessary protective ambient air standards. Through national and state legislation, DEC has recognized shared values of environmental protection, along with many other core values enshrined by the legislature in state law. These values form the framework for government regulatory programs. COMMISSIONER BALLARD told members that environmental protection is not incompatible with resource development; it is a fundamental component of resource development as are labor and worker safety laws. Governor Murkowski is committed to enhancing Alaska's economy through resource development and he is equally committed to protecting Alaska's environment. A strong economy will generate the revenue needed to continue funding important regulatory programs. Governor Murkowski and his cabinet recognize that Alaska's laws form the framework for a successful resource development program. Environmental laws are one of the essential pieces of a public policy mosaic. They are no more and no less important than the other pieces. SB 116 will improve the process and the function of the underlying state policy to protect the environment. It will not in any way change the protective standards. COMMISSIONER BALLARD told members through DEC's proposed fiscal year 2004 budget, DEC intends to sharpen its focus on its core responsibilities, air permitting being one. SB 116 is essential to achieve the results promised in its budget proposal. COMMISSIONER BALLARD said the federal Clean Air Act and the Environmental Protection Agency (EPA) rules have been amended several times in recent years to establish new programs and control concepts. Alaska's state permitting program has not kept pace with the national regime and, more importantly, it has not kept pace with the needs of Alaskan communities and industry. Alaska must have a predictable permitting process that is protective of air quality. In the past, DEC has not been able to mesh its federal programs well with the needs of the remote, isolated and small communities in Alaska. DEC seeks to be flexible and timely enough to take advantage of fast changing business opportunities, particularly on the North Slope. SB 116 does both. It provides the tools DEC needs to work with Alaska- specific isolated geography and tools to meet the challenges of industry. COMMISSIONER BALLARD said specifically, SB 116 creates a predictable, timely and rational permitting program. It differentiates major pollution sources from minor sources. It regulates minor sources with standardized permit conditions based on best management practices. DEC's present permit by rule program works in the oil industry for the drilling rigs. DEC wants to expand that concept of permit by rule to include more situations. DEC has more mobile and portable plants and machinery than most states and issues more Title 5 permits than Colorado and more PSD permits than the state of New Jersey. DEC needs appropriate tools to work with Alaska's very unusual but essential mobile fleet. SB 116 provides those tools and allows DEC to exempt sources from permitting to the extent allowed under federal law. It achieves efficiency in permitting through adopting federal rules by reference, making it easier for DEC to permit rural power plants. DEC will be able to use the clean unit test to avoid a detailed site-by-site technology analysis now required for every rural plant. COMMISSIONER BALLARD told members that currently, Alaska is regulating minor sources in the same way it manages major sources of air emissions. SB 116 establishes a permit program for minor air pollution sources, when it is needed to protect ambient air quality and health. This single improvement in permitting minor sources will be widely recognized as significant permit streamlining. DEC worked with a stakeholder work group last fall that recommended this and other changes and will herald the incorporation of these changes into state law. SB 116 makes an important revision to the permit fee structure. It changes the present hourly permit administration fees to flat fees whenever possible. This single change will allow permittees to predict in advance both community permittees and industrial permit applicants. They will know their permit costs in advance and plan for those costs in their budget cycle. COMMISSIONER BALLARD told members SB 116 is the result of two very important efforts DEC concluded at the end of the last calendar year. The first was a several year benchmarking effort in which other states' permit programs were evaluated and compared to DEC's permit programs. DEC determined it needed the benefit of statutory changes, which will be accompanied by regulatory changes. DEC will need a staff increase to meet the standards maintained in other states. The other effort this bill reflects is the effort of the stakeholder work group, an effort facilitated by Brian Rogers and concluded in a report made available to committee members. COMMISSIONER BALLARD said she is proud to propose legislation that she believes reflects the best practices in other states and also reflects the wishes and expectations of the work group comprised of those who need air permits to succeed in Alaska. She noted that Tom Chapple and John Kuderbach of DEC were available to answer questions. SENATOR WAGONER questioned why SB 116 requires an increase in the number of staff at DEC if the legislation will make the permit process more efficient. COMMISSIONER BALLARD said DEC concluded, from its benchmarking study, that it has not put adequate manpower into its permitting programs, both in the field to understand site-specific circumstances, and in the office to do the work. The tools that those individuals will require also need to be sharpened through statutory reform. For example, DEC will need to be able to incorporate federal rules more quickly and more efficiently. That is accomplished through a statutory change. In addition, DEC needs a larger work force to accommodate the very large work burden of air permitting in the state. Those are both requirements of DEC's proposed budget and the Governor's requested legislation. CHAIR OGAN said he shares Senator Wagoner's concern. He asked if most of SB 116 contains technical changes to conform to federal definitions, while the section that will require extra staff is on page 14. He also asked if the additional costs of the fiscal note will be recovered from emission fees. COMMISSIONER BALLARD said those costs will be recovered from permit fees. CHAIR OGAN asked if the emission fees are charged on a per ton basis of the emission of pollutants. He noted the bill changes the word "contaminant" to "pollutant." He asked her to address the provision on page 14. COMMISSIONER BALLARD said the language on page 14 refers to emission fees. She said the good news is that DEC's emission fee income is declining because emission fees are based on emissions. The implementation of better control technology has lowered emissions throughout the state. The manpower changes within DEC will be offset by an increase in the permit fee charged to issue a permit. COMMISSIONER BALLARD explained that one reason it is so important for DEC to have adequate field staff is to reflect the unique circumstances in Alaska. In the instance of air emissions, those circumstances are particularly unique and do not apply anywhere else in the country. Alaska has permafrost, which sometimes results in a larger project footprint than in an area that only requires digging to construct a single foundation. Sealift in harbors is also common in Alaska and requires larger storage capacities. DEC needs to use the flexibility provided in the federal rule to the maximum and incorporate it into its standards to reflect its unique circumstances. DEC found, in its benchmarking study, that to accomplish that, DEC has less staff than states with a fairly similar permitting burden. She repeated that DEC's permitting workload is comparable to or greater than any state in the nation for its size because Alaska does not have a power grid. The air emission control program is one of the most important to economic development and environmental protection in the state. If Alaska had a power grid, this would be a relatively minor issue. CHAIR OGAN noted that Governor Murkowski told the Legislature that if it increases the budget in any component, it must decrease it elsewhere. He asked if DEC is planning to offset the $900,000 fiscal note by raising the cost of processing permits through an increase in permit fees, which is essentially a user fee for developers. He referred to the language on page 14, line 2, and pointed out it says "these shall be recovered from emission fees under AS 46.14.258 for the following services." He asked if DEC is charging for those services now or whether they are new charges. COMMISSIONER BALLARD said DEC charges for those items now. Many of the permit applications are for community power plants. DEC does not exclusively provide this service to industry. It is a necessary component of permitting all sources of emission. The permit program will cover its costs through permit fees, as it does now. CHAIR OGAN asked if DEC is requesting any additional authorization for program receipts to cover the $900,000 cost. COMMISSIONER BALLARD said the fiscal note shows exactly what positions will be necessary. CHAIR OGAN said that basically, SB 116 appears to contain technical changes to the law. He suggested requesting additional positions in the Governor's operating budget. COMMISSIONER BALLARD said all of the positions are in the operating budget proposal. However, a statutory change needs to occur to allow those positions to be as effective as possible. DEC's present statutes and regulations established a program that does not meet the needs of Alaska's communities and industries because they contain terms that are inconsistent with federal terms. That inconsistency makes it difficult for DEC to adopt, by rule, federal changes. The inconsistency requires DEC to go through a lengthy site-by-site or permit-by-permit process. DEC will charge more to cover the cost of its staff increase, however it would not be appropriate to charge more for an outdated program so the statutory changes are necessary. She explained that in the spirit of the Governor's request that increased costs to budget components be offset by decreases elsewhere, DEC's budget contains a fairly significant reduction of other activities in order to focus on this effort. DEC has proposed a net reduction of positions in order to accommodate the growth of this core program. CHAIR OGAN asked why DEC provided a fiscal note if this increased cost is being "washed out" by other cost savings. COMMISSIONER BALLARD said the fiscal note fulfills DEC's requirement to communicate to the Legislature the precise fiscal impact of the legislation. Even if DEC raises its permit fees, it needs the Legislature to appropriate increased revenue. She noted that a requirement of the federal Clean Air Act is that the program fees cover the cost of the program. SENATOR ELTON asked if SB 116 will only cover stationary sources of emissions and not apply to cruise ship emissions. COMMISSIONER BALLARD deferred to Tom Chapple for an answer. MR. TOM CHAPPLE, Director of the Division of Air and Water Quality, DEC, told Senator Elton that SB 116 does not change anything relative to cruise ships; it addresses stationary sources that require permits. CHAIR OGAN asked if SB 116 makes any substantive changes. MR. CHAPPLE replied that the terminology changes will change terms in state law to comport with federal terms. That major feature of the bill will allow DEC to streamline the program by both adopting the federal rules and the court cases behind the federal rules. He explained that whenever a question arises about what a term means when DEC is implementing a permit, people do not have to ask whether DEC's terms differ from terms in the decisions made in four court cases. Using the same terminology will save costs to both industry and the state. CHAIR OGAN asked why, in spite of the streamlining, the program will cost more. MR. CHAPPLE told members that SB 116 is a step forward toward timely, responsible, predictable permits. DEC's past record for construction permits, which are required to build a new mine or power plant, takes an average of 254 days. That is not timely. SB 116 will allow DEC to accomplish efficiencies through streamlining but that alone will not enable DEC to issue permits in 90 to 120 days, which would be timely. CHAIR OGAN said his line of questioning reflects his concern about the "disconnect" between the bill and the fiscal note. The bill will streamline the permit process by changing terminology to comport with federal rules, but it necessitates additional employees. COMMISSIONER BALLARD said if DEC does not make both changes, it could not achieve the promised result. Both changes were presented together because DEC believes they are inseparable. It would be pointless to put more manpower into the existing permit program because it is cumbersome and does not achieve for the permit holder the opportunities to conform to federal programs. SB 116 alone will not allow DEC to achieve the efficiencies because it will not have the manpower to use the better tools. DEC believes they belong together and, in the interest of full disclosure, they ought to be presented as one piece. SB 116 is necessary to gain the efficiencies that the manpower will use; the manpower is needed to make the bill real. SENATOR SEEKINS asked if SB 116 will enable DEC to use the same terminology as the federal government so that SB 116 in itself will not create additional expense, but implementing it to reduce the permit process time will require additional staff. COMMISSIONER BALLARD said that is correct. Certain requirements in the bill will, in and of themselves, require additional effort, which DEC believes will be beneficial. That entails reallocating minor sources to a permit-by-rule category and writing some new general permits. Some of the work associated with this bill is over and above DEC's current permitting regime. That alone will not achieve the result expected by the communities and industries that need these permits. SENATOR SEEKINS noted the funding source identified on the fiscal note is the 1093 Clean Air Protection Fund*. He asked what the asterisk signifies. MR. CHAPPLE explained that the user fee revenues are deposited into the Clean Air Protection Fund. That dedicated fund was created in Alaska law in 1993 because the Clean Air Act requires the operating permit program to be a dedicated fund. DEC realized since then that only the operating permit program is supposed to have dedicated protection. The revenues generated from construction permits and minor source permits should go into a different fund - the Emission Control Permit Fund. SB 116 will create that new fund. The asterisk signifies the year 2006 because that is when DEC believes the funds need to be split. Until DEC accomplishes the permit reforms, it will be impossible to say how much should go into each pot. CHAIR OGAN referred to page 2 of the fiscal note and read, "...the accounting for the air permits will change to align with requirements of the Alaska Constitution...." He asked what part of the current program is out of alignment with the Alaska Constitution. MR. CHAPPLE answered under the Alaska Constitution, a dedicated fund can only be established if it is required under a federal law provision. This change will allow only the fees from the operating permit program to go into the Clean Air Protection Fund to align with federal law. Right now, the fees from construction permits and operating permits go into that fund and that is not consistent with the Alaska Constitution. CHAIR OGAN asked why that is being done. MR. CHAPPLE said DEC is trying to correct the problem. CHAIR OGAN asked what portion of the bill addresses the dedicated fund. MR. CHAPPLE said that is in Section 34 on page 17. CHAIR OGAN asked if changing the conforming language in regulation will be a one-time expense. COMMISSIONER BALLARD said that is correct. She explained that the fiscal note anticipates DEC's fiscal year '04 budget request. It is conceivable that DEC will need a different staffing configuration or number in later years. There being no further questions, CHAIR OGAN took public testimony. MS. MARILYN CROCKETT, Deputy Director of the Alaska Oil and Gas Association (AOGA), told members that an AOGA representative participated in DEC's stakeholder work group that put together a package of recommendations to streamline and enhance the air emissions permit program. The group met on a regular basis over a four-month period and wrestled with the problem of reduced emission fee revenues and the challenge of timely issuance of permits. Members unanimously supported the work group's report, issued in December. The commissioner has adopted that report; SB 116 is one result. AOGA has not had the opportunity to scrutinize the bill, but she understands, from the briefing she received from Mr. Chapple and Mr. Kuterbach, that the intent is to implement those recommendations. If SB 116 accomplishes that intent, AOGA supports it and applauds DEC for proposing it. She advised members that AOGA might propose some minor changes to the legislation. AOGA agrees that the statutory changes will allow DEC to adopt a more federalized-looking permit program, which will resolve a lot of the problems that come up on individual permits. CHAIR OGAN informed Ms. Crockett that the committee will hear SB 116 in about two weeks and asked her to submit comments by that time. MS. CHARLOTTE MacKAY, representing herself, told members that SB 116 removes the necessary obstacles to allow DEC to adopt the work group's recommendations. The work of restructuring is yet to be done and she believes the fiscal note will help enable the process to continue. She said DEC has been very open and receptive to outside suggestions. She believes that by following the work group's recommendations, DEC will be able to maintain its high level of protectiveness while concurrently creating a more responsive and predictable air permit program. MR. TADD OWENS, Executive Director of the Resource Development Council (RDC), said that although the RDC did not formally participate in the work group, several RDC members had direct participation in that process. The RDC is pleased to see DEC and the Administration come forward with SB 116 to implement the recommendations from that work group. The RDC believes SB 116 is part of a comprehensive effort to streamline the state's permitting systems. He made two comments in regard to the fees: It's our understanding that under the old air program, those fees that were charged on an hourly basis will now fall under the old HB 361 that was passed several years ago. Under that fee structure, the RDC supports very strongly. I would also like to commend DEC for - the committee has discussed the fiscal note of this bill and I believe Commissioner Ballard noted that the overall DEC budget reflects that there's a gain in this program and they've made adjustments in other areas to make sure that their overall budget request has come in flat. We very much appreciate their efforts on that behalf as well. CHAIR OGAN asked if he is aware of any discussion about who will bear the cost of the increase in user fees. MR. OWENS replied that it is the RDC's understanding that the fees that were previously charged on an hourly basis for construction and operating permits will now fall under the legislation that the RDC and its members spearheaded several years ago. The RDC feels very comfortable with the sideboards that legislation puts on fees charged to permit applicants. The RDC also feels very comfortable with the division between the costs borne by the private sector and the overhead costs borne by DEC. There being no one else wishing to testify, CHAIR OGAN asked for a sectional analysis of the substantive changes that will be made if the legislation is enacted. MR. JOHN KUTERBACH, manager of the Air Permits Program, gave the following explanation of specific sections of the bill. Section 12 (page 5) makes two changes. It allows DEC to exempt operations from getting an operating permit to the extent allowed under federal law. Under DEC's current statute, if EPA exempts a source, DEC is to follow suit. However, it does not specify what to do when EPA's decision is pending. Federal law allows DEC to exempt an operator under that scenario; Section 12 allows DEC to follow that federal law. He explained that federal law lists a class of sources for which EPA is supposed to decide whether a permit is required. EPA has not yet made a decision on most of those categories of sources but it allows states to defer permitting. CHAIR OGAN asked what would happen if DEC takes a more liberal interpretation of the law than the federal agency and whether DEC can back-pedal if it has issued a permit. MR. KUTERBACH explained that would fall under DEC's Title 5 permit program so DEC would submit a proposed regulation to EPA for approval. He then continued with the sectional analysis. Section 12 also requires permits for the minor [source] permit program that are categorized under regulation. Sections 13 and 14 establish the minor permit program. The language that requires permitting of minor sources from the major source permitting programs is removed in Section 13. It is re-established under Section 14 as the minor permit program to provide a clear distinction in statute between the major source permitting program, which will cover construction and operating permits, and the minor source permitting program. CHAIR OGAN asked for a description of the differences between the two programs. MR. KUTERBACH said the major source permitting programs are actually set up in the Clean Air Act for operations with a large potential for major sources of air pollution. The federal rules contain what is called, "new source review," which includes prevention of significant deterioration (PSD) permits for large industrial operations or large increases of pollutants at existing operations. The permitting process for those operations is very extensive; the permits are referred to as Title 5 permits. They are for operations with large sources of pollution or sources subject to federal regulation that may apply to smaller units. It is on those smaller unit federal emission standards that EPA must decide whether an operating permit is required. Those sources would be deferred. SENATOR BEN STEVENS referred to language on page 5, line 21, and asked whether the phrase, "has the potential to emit" is in federal law. MR. KUTERBACH said it is. SENATOR BEN STEVENS asked how that determination is made. MR. KUTERBACH said the evaluation is based on the actual measured ability of sources to emit pollutant and on some assumptions about how those sources would operate. The federal definition, which DEC would incorporate by reference, bases it on the maximum amount of emissions the facility could emit in one year based on the design of the equipment and any approved limitations to that emission. SENATOR BEN STEVENS expressed concern that the words, "has the potential to emit" are very ambiguous and asked whether DEC must follow strict guidelines in that evaluation. TAPE 03-13, SIDE B SENATOR BEN STEVENS noted he has the potential to be as wealthy as Warren Buffett but he doesn't know whether he'll realize that potential. SENATOR ELTON said he hopes so. CHAIR OGAN asked if DEC hires consultants or has engineers on staff to make that determination. MR. KUTERBACH said the evaluation is technical in nature and is based on the engineering design of the equipment and the maximum ability of that equipment to emit pollutants. He noted that physical principles are involved. SENATOR BEN STEVENS thanked Mr. Kuterbach for the clarification. He then asked why the phrase, "as having the potential to violate the ambient air quality standards" was deleted on lines 26-27. MR. KUTERBACH explained that the technical evaluation of having the potential to violate ambient air quality standards has a much less technical basis behind it. It is very easy to measure the exhaust of a boiler and multiply that measurement by hours and days. It is much more difficult to predict how that pollution will distribute through the atmosphere and possibly violate ambient air quality standards. SENATOR BEN STEVENS commented that in his way of thinking, having the potential to emit is essentially the same as having the potential to violate the ambient air quality standards but, because technical guidelines are used, he would not press the matter further. MR. CHAPPLE told members that the language on both lines 17 and 21 that mention the 100 tons per year and potential to emit 250 tons per year are based upon federal law, which defines those as large sources. The Clean Air Act is based on the premise that states need to identify what sources have the potential to violate ambient standards and manage those sources. In the past, DEC has lumped both small and large sources together under the construction and operating permit program. Those are being separated in SB 116. He stated: And so, ones that have the potential to violate ambient standards tend to be the smaller ones even though the bigger ones will too. It's just not as - the federal law says clearly when you're above this amount, you have the potential to be a major source and the potential to violate health standards. It's the smaller ones - it's where we have done other work to say a source smaller than 100 tons in this situation, or this type of source, could violate public health standards and therefore put them into the minor source permitting program. We think that's an improvement because we can streamline the minor source permitting. That's the separation that's occurring in this section, Senator Stevens. SENATOR BEN STEVENS then referred to Section 3(b)(4) on page 2 and noted that a new section AS 46.14.130(c)(2) is being added. He felt that language is ambiguous. He asked if Section 14 (page 6) contains the reasons for issuing a minor permit and expressed concern that the phrase, "the potential to violate" gives DEC a lot of latitude. MR. KUTERBACH said that language does give DEC a lot of latitude, however, the language on page 2 deals with those regulations that must go through special procedures in order to be adopted by DEC. The special procedures include a peer review of DEC's determination of the need for that regulation. SENATOR BEN STEVENS asked if Section 3 on page 2 pertains to regulations. MR. KUTERBACH said that is correct. He explained the intent of Section 3 is to update the cross-reference. DEC currently has this broad language about the public health effects distributed both in the construction and operating permits. That is what is cross-referenced in Section 3 on line 25. It removes the old cross-reference and puts in a new cross-reference. AS 46.14.010(b) or Section 3 specifies that certain types of DEC regulations must go through extra procedures in order to be adopted. SENATOR BEN STEVENS said it looks to him like SB 116 streamlines and will be more definitive but yet adds a new subsection, which is very broad. CHAIR OGAN suggested that Senator Stevens meet with Mr. Kuterbach to discuss the matter. MR. KUTERBACH continued with his sectional analysis. Section 15 adds a phrase that recognizes that DEC does not want to use the same processes for minor source permits that it uses for the major source permits and adds an exception to the types of regulations that DEC has to adopt in order to implement the permit program. Minor source permits are exempted. That allows DEC to decide what is most appropriate for the type of minor permit that regulations are being developed for. Section 17 eliminates an application deadline. The current operating permit program has two application deadlines: one for existing facilities and another for new facilities that do not require construction permits. The second application deadline is not in federal law and it only applies to minor facilities that need an operating permit but not a construction permit. Since the minor permits will be pulled out, very few facilities would fall under this deadline so DEC recommends that it be removed. Section 20 is new. It adds a deadline for issuing minor permits. Section 23 recognizes that a public comment process will be unnecessary for a majority of the minor permits and refers to the ad judicatory hearing requirement only if a public comment process is required or solicited. Section 25 is a new section that specifies requirements for general minor permits. DEC currently has a section under AS 46.14, which allows general permits. That language comes from federal rules for major permits and does not recognize explicitly that the permit can be valid for operations that are mobile. The intent is to explicitly say that the general permit can be used for operations that move around. However, because the other language is important for the major source permitting program, it was retained. Section 26 adds a phrase required by federal language for the major operating program and specifies that is what the restrictions are for. Section 28 changes the fee structure from hourly fees to the flat fees based on AS 37. CHAIR OGAN asked which are greater. MR. KUTERBACH said most people would say the hourly fees are greater. He continued. The current AS 46.14.240 contains an explicit list of what services hourly fees can be charged for. Section 28 changes that to the flat fees. Section 30 says that DEC is not allowed to directly charge qualified small businesses for some of those permit services under federal Title 5 mandates. Those services must be paid for from emission fees. Section 31 pertains to a change on page 15, line 31. At present, DEC is supposed to periodically review its fees every three years. AS 37 requires that review to occur every four years. Section 31 changes the three-year requirement to four years for the sake of consistency. Section 32 changes the current statutory requirement to use emission fees for cost recovery from operating permits only. It specifies that emission fees will also support the implementation of minor permits or construction permits. Section 34 establishes a new receipts account. When the construction permit fees and minor permit fees are separated out of the dedicated fund, they will be placed in this new account. Section 35 simply adds minor permits to DEC's authority to terminate, modify, or revoke permits. Sections 48 through 60 contain the permit definition changes. In every case, DEC has tried to replace the department term or definition of a term with its federal equivalent. One exception is Section 59, which adopts the federal definition of "stationary source," which corresponds to the Alaska definition of "facility." However, the Alaska definition has one unique situation not covered in the federal definition, that being that Alaska has both floating and onshore processors. DEC's current statute treats them the same. The state definition explains that a vessel can also be considered a facility if it is engaged in an industrial operation. The federal rule does not make that distinction so it has been retained so that onshore and offshore processors are treated the same under the permit program. CHAIR OGAN asked why that is being done. MR. KUTERBACH said it retains the decision made in 1993 to treat them the same way. SENATOR ELTON said his guess is that was done to make sure there is an equal playing field between those who have invested onshore and those who have not. CHAIR OGAN asked if DEC currently gets emission fees from vessels. MR. KUTERBACH said this covers what DEC currently does; it will not add any new facilities. If DEC were to change to the federal definition without including offshore processors, they would no longer be regulated under the permit program. He explained that Sections 61 through 63 provide for the transition period. While SB 116 removes a lot of impediments to streamlining, DEC will have to promulgate regulations to get the minor permit program established and up and running. These sections provide for that time period. Sections 64 through 66 address the effective dates. The majority of the changes become effective immediately. The sections changing the fee from an hourly fee to a flat fee take effect January 1, 2005 to give DEC time to determine what the flat fees should be and to establish the necessary regulations. Section 66 establishes that the separation of the dedicated fund will occur in 2006. 4:48 p.m.  CHAIR OGAN thanked the DEC participants and closed the hearing on SB 116. The committee took up SB 44.