Thursday, July 27, 2017

PEC Urges House, Senate Members, Governor To Oppose Drastic Changes To DEP Permit Reviews

The PA Environmental Council Thursday sent a letter to all members of the General Assembly  and Gov. Wolf urging them to oppose provisions in the Tax Code bill-- House Bill 542 (Thomas-D-Philadelphia)-- that make drastic and unprecedented changes to permit reviews by the Department of Environmental Protection.
The text of their letter follows--
Dear Governor Wolf and Members of the General Assembly:
On behalf of the Pennsylvania Environmental Council, I am writing to express our opposition to amendments made to tax code legislation – House Bill 542 (P.N. 2259) – that severely compromise environmental protections in our state. These amendments include:
-- Establishing a new, legislatively-appointed review board that has sole authority to disallow air permitting controls for the unconventional gas industry. This provision provides special treatment for one particular industry with respect to environmental law and regulation.
-- Mandating third party review and approval of environmental permits. In more direct terms, effectively ceding a primary component of the state’s responsibility to protect public health and the environment to private interests. There are no provisions made as to assuring the qualifications of these private interests, ensuring the right for public comment, or protecting against self-dealing.
These drastic amendments are ill-advised, and likely violate both federal law and our state’s constitution. They should be rejected as an affront to responsible environmental protection.
We urge you to vote against this amended legislation.
For more information on programs, initiatives and special events, visit the PA Environmental Council website, visit the PEC Blog, follow PEC on Twitter or Like PEC on Facebook.  Visit PEC’s Audio Room for the latest podcasts.  Click Here to receive regular updates from PEC.

Thursday PA Environmental NewsClips - Senate Votes Revenue Package

Senate returns to session at 9:30 TODAY for vote on revenue package.
The Feds
Click Here for Updated Environmental NewsClips & News
Click Here for PA Capitol Digest NewsClips & News
Click Here for PA Environment - The Feds

Senate Environmental Permitting Changes Would Emasculate DEP’s Ability To Regulate Air, Water, Mining, Waste, Radiation, Oil & Gas

The amendments adopted by the Senate Appropriations Committee Wednesday night to the Tax Code bill-- House Bill 542 (Thomas-D-Philadelphia) -- include provisions creating a special Advisory Committee that must approve any air quality general permits for oil and gas operations before they go into effect and directs DEP to set up a third-party permit review program for all its permits.
The net impact of the changes would be to emasculate the ability of the Department of Environmental Protection to regulate pollution under any of its programs and sets up significant conflicts with the ability of the agency to continue to administer any of its federal regulatory programs.
The amendment also directs DEP to take all fees collected by the agency over the last calendar year for any permits considered delayed and transfer those funds to the third-party reviewers, further cutting DEP’s operating budget.
These changes are on top of the 40 percent cut to DEP’s budget over the last 13 years made by the General Assembly and Governors and the loss of over 22 percent of its staff.
Now the Senate amendments propose to take away DEP’s permit fees and its authority to issue environmental permits and create another private bureaucracy of third-party reviewers and allow a permit applicant to pick the reviewer he wants, including picking a landscape architect or land surveyor to review a hazardous waste permit. There are no provisions for supervision of these individuals or for accountability.
All, of course, with no resources to administer this new private bureaucracy.
  The provisions were no doubt deliberately put in the Tax Code bill, which only has to do with taxes not administrative issues, along with the natural gas severance tax to make it much more difficult for the Governor to veto.
Air Quality Permit Advisory Committee
One amendment would create a new 7-member Air Quality Permit Advisory Committee dominated by 6 members appointed by the Senate and House and one member by the Governor (Section 2401-B, page 46 of the amendment).
The language requires the Committee to approve all general air quality permits meant to regulate air emissions from oil and gas operations.
It was meant to address the ongoing disagreement with some in the General Assembly and DEP over its proposed methane emission control general permits covering oil and gas operations.
This is the first time in history a legislatively-dominate body has veto authority over any environmental regulation or permit short of a vote to pass new legislation or a resolution that is then presented to the Governor for his action.
Mandatory Third Party Environmental Permit Reviews
Another amendment to the bill directs DEP to within one year establish a program for third-party review of any permits (not licenses or certifications) issued by the agency (Section 2401-C, page 47).
DEP is required to review all permit decisions already made (issuances, denials changes in ownership, transfers, renewals, amendments) and permit decision delays (beyond the permit guarantee deadlines or 30 days if not included in that program) in the prior calendar year and submit that report to the Chairs of the Senate and House environmental committees within one year.
DEP is required to contract with third-party permit reviewers and transfer its report on all permit decisions and permit decisions delays to those reviewers.  
The third-party reviewers are required to be licensed professionals defined as “an individual licensed by the Commonwealth as a professional landscape architect, engineer, land surveyor or geologist.”
Any permit fees collected by DEP for permit considered delayed are directed to be turned over to the third-party reviewers.
The third-party reviewers are designated an “agent of the Commonwealth” for purposes of resolving each permit application which is subject to a permit decision delay and permit decisions.  
There are no provisions for any supervision of these individuals or for accountability.
There are no conflict of interest provisions that would prevent a consultant from reviewing his own application, and if DEP added even a basic conflict provision would they be going beyond their statutory authority?
There are no provisions dealing with public participation. Since the third-parties are now handling a permit application will they make the decision on holding a public hearing or extending a comment period when a legislator calls?  
There are no deadlines for permit review actions by the third-parties and no provision requiring them to follow procedures, many times hammered out with federal agencies, to assure permit review integrity.
The permit applicant may also select his own permit reviewer (an “individual licensed by the Commonwealth as a professional landscape architect, engineer, land surveyor or geologist”) among those third-party reviewers contracted with DEP.
These third-parties are accountable to no one, according to the language in the bill. There is no provision to even require the third-parties to communicate with DEP on what their decision was or to allow DEP access to the documents they sent to permit applicants.
There are no provisions dealing with appeals of permits by the applicant or public. Since third-parties are an "agent of the Commonwealth" and charged with "resolving each permit application" will there even be appeals and who defends a permit in court. Certainly not DEP under this program since they had nothing to do with the permit decision.  
And just as certain, the third-parties will not defend permits for free although there is no provision for paying third-parties more than DEP permit fees.
DEP is authorized to adopt regulations to implement these provisions, but again, would adding common sense protections for the public be going beyond their statutory authority as written?
Click Here to read the amendment for yourself the amendment. Click Here for Senate Fiscal Note and summary)
What DEP Has Said About Third-Party Reviews
At a Senate Transportation hearing in February, DEP Deputy Secretary John Stefanko said there were several significant concerns with third-party reviews, not the least of which is the statutory requirements requiring DEP make its own independent determination when taking permit actions.
“Only the Commonwealth has constitutional obligations to the public and our natural environment,” said Stefanko.  “Absent direct supervisory oversight and Commonwealth parallel review, the quality of review and application of constitutional, statutory and regulatory requirements is difficult to control. Sufficient QA/QC [Quality Assurance/Quality Control] requires time and personnel, likely eliminating any cost benefits and time savings assumed by the third-party review structure.”
He noted third-party reviews would required DEP to providing training of third party reviewers by the Department.
“The Department has made staff training a priority. This is a complex and time consuming activity. It will take a great deal of time, effort and energy to insure that the third party reviewers are properly trained and understand Department regulations and guidance,” explained Stefanko.  “This time effort and energy would be better spent by enhancing Department staff capabilities to deliver training to both Department and County Conservation District staff.”
Stefanko also pointed out, during an appeal of a permit approved under a third-party review, that third party would be required to defend its actions before the Environmental Hearing Board and Commonwealth Court.
The third-party reviewer would not defend its reviews for free and impose additional costs on the agency.  The third-party could also be responsible for attorney’s fees and other costs if they lose.
He also said there is a significant concern over potential conflicts of interest and ethics with third-party contractors.
Click Here for a copy of Stefanko’s written testimony.  Click Here to watch a video of the hearing.
Oil and Gas Erosion Permit Reviews
Section 2403-A of the Tax Code bill (page 77) requires DEP to do several things with permits for unconventional oil and gas wells development--
-- Any permit which has not been denied by DEP within the statutory timeframe is deemed approved;
-- If the review period is extended for cause, DEP must refund the permit review fee to the applicant;
-- DEP is required to review well permits within 45 days (or 60 days with cause), general air quality permits within 30 days and an erosion and sedimentation permit within 53 days or 24 business days of submission for an expedited application.
Permit Review Reforms Without Destroying Environmental Protection
There are without doubt changes and reforms needed to speed DEP permit reviews and make them more consistent across the state.
Many of those reform initiatives were discussed at DEP’s budget hearings this year, separate committee hearings and at the confirmation hearing for DEP Secretary Patrick McDonnell.  Click Here for a list of those initiatives.
At a Senate hearing on May 24 David Spigelmyer from the Marcellus Shale Coalition “applauded” efforts by Secretary McDonnell to help speed up permit reviews, while at the same time pointing out legitimate issues.
But without investment in technology and people, these changes will never be made.
The Senate didn’t just miss the mark on this issue, it isn’t even on the same planet.
It is ironic this proposal comes out now, during the same week we are celebrating the 15th anniversary of the Quecreek Mine Rescue, a rescue by public employees doing their jobs and volunteers working cooperatively with private contractors to get a critical job done.
Just the opposite of this proposal.

Wednesday, July 26, 2017

Nothing In Senate $970 Million Revenue Package For The Environment, Code Bills Littered With Environmental Riders

The $970 million revenue package now before the Senate for a final vote Thursday includes no new money for environmental project or program funding and the related Code bills are filled with environmental riders, most wanted by industry groups.
The package does include a new natural gas severance tax, a new gross receipts tax on consumer natural gas use, increases in the telcom and electric gross receipts taxes and changes to the Sales Tax law that would force vendors doing business through online marketplaces such as Amazon to pay Sales Tax.
Also part of the recurring revenue package is $200 million for expanded gaming, but the Senate will not consider a gaming bill this week.
There remaining budget deficit will be made up by securitizing the tobacco settlement money totalling about $1.3 billion in new debt.
Taking Away DEP’s Ability To Issue Permits
The amendments adopted by the Senate Appropriations Committee Wednesday night to the Tax Code bill-- House Bill 542 (Thomas-D-Philadelphia) -- includes provisions creating a special Advisory Committee that must approve any air quality general permits for oil and gas operations before they go into effect and directs DEP to set up a third party permit review program for all its permits.
The net impact of the changes would be to emasculate the ability of the Department of Environmental Protection to regulate pollution under any of its programs and sets up significant conflicts with the ability of the agency to continue to administer any of its federal regulatory programs.
The Senate amendments create another private bureaucracy of third-party reviewers and allow a permit applicant to pick the reviewer he wants, including picking a landscape architect to review as hazardous waste permit.
All, of course, with no resources to administer this new private bureaucracy and with no supervision or accountability provisions for the third-party reviewers.
Click Here for all the details.
Revenue Sources
The new severance tax is expected to generate about $108 million and revenues generated from the tax will be pledged to hold harmless the Unconventional Gas Well [Act 13 Impact Fee] Fund at the $200 million annual funding level and the remainder will be deposited in the General fund.
In exchange for the severance tax, Senate Majority Leader Jake Corman (R-Centre) said they have negotiated regulatory reforms for the Marcellus Shale drilling industry that involves provisions that would deem approve permits not processed by existing permit review deadline (45 days), not starting the clock over again when a permit is resubmitted and “other issues significant for the industry.” (Click Here for a description of those changes, which were partially described above.)
The new Gross Receipts Tax on Natural Gas would generate about $303.7 million of which $20 million dedicated to LIHEAP and $20 million for natural gas infrastructure improvements and to expand market access for residential gas customers.
Another provision would annually transfer $20 million from the Oil and Gas Lease Fund to the Marcellus Shale Legacy Fund [it should be $35 million] for distribution to the Environmental Stewardship Fund and $15 million is transferred to the Marcellus Legacy Fund to transfer to the Hazardous Sites Cleanup Fund.  
The summary of these provisions includes the line: “When making appropriations from the Oil and Gas Lease Fund, the General Assembly shall consider their trustee duties under Section 27, Article 1 of the Pennsylvania Constitution” in a nod to the June 20 PA Supreme Court case on the Environmental Rights Amendment.
Nonrecurring revenues include transferring $200 million from the Joint Underwriting Association Fund.
Sen. Corman also said Senate Republicans intend to do agency mergers related to human service programs, but not this week.
Environmental Riders
The following is a summary of the major environment-related riders in the Fiscal Code, Tax Code and Administrative Code bills--
Fiscal Code - House Bill 453 (Ryan-R-Lebanon)
-- Oil and Gas Lease Fund: Annually transfer $20 million [supposed to be $35 million] from the Oil and Gas Lease Fund to the Marcellus Shale Legacy Fund for distribution to the Environmental Stewardship Fund and $15 million transferred to the Marcellus Legacy Fund to transfer to the Hazardous Sites Cleanup Fund.
-- Air Pollution Act Transfer: $30.4 million from a settlement by the Attorney General relating to violations of the Air Pollution Control Act by Volkswagen received during the fiscal year to the General Fund.
-- Small Water And Sewer System Funding: $15 million available for small water and sewer projects with a cost of not less than $30,00 or more than $500,000.  Transfers an additional $10 million from Building PA Program to small water and sewer projects.
-- Funding Sewer/Water Laterals: Allows public municipal authorities to use funds to replace private water and sewer laterals.
-- Susquehanna and Delaware River Basin Commissions: Authorizes the Auditor General to audit the river basin commissions and no more than 25 percent of the appropriations to the commissions may be spent in any quarter and the commissions shall reimburse the Auditor General for the cost of the audit.
-- Natural Gas Pipeline Fund: $6 million transfer from the Building Pennsylvania Program to the Natural Gas Pipeline Fund
-- Repeals Drilling Moratorium End Date In Southeast: Repeals the January 1, 2018 expiration on the drilling moratorium in the South Newark Basin in Southeast PA.
-- Temporary Cessation Of Oil & Gas Wells: Provisions relating to payments of royalties during periods of nonproduction.
-- Farm Succession Planning Grants: Allows the Department of Agriculture to use funds from the Agricultural Conservation Easement Purchase Fund for succession planning grants to continue agricultural operations.
Click Here for the amendment
Tax Code - House Bill 542 (Thomas-D-Philadelphia)
-- Natural Gas Production Severance Tax (New): $108 million, would range from 1.5 to 3.5 cents per MCF depending on the price of natural gas.  Revenues generated from the tax will be pledge to hold harmless the Unconventional Gas Well [Act 13 Impact Fee] Fund at $200 million and the remainder will be deposited in the General fund.
-- Gross Receipts Tax (News) - Natural Gas: $303.7 million of which $20 million dedicated to LIHEAP, $20 million for natural gas infrastructure improvements and to expand market access for residential gas customers
-- Wild Conservation Tax Checkoff: Made permanent
Click Here for the amendment.
Administrative Code - House Bill 118 (Kaufer-R-Luzerne)
-- Recycling Fee Extension: Removes the sunset date for the $2/ton municipal waste recycling fee and funds will remain in the Recycling fund for grants.
-- Solar Borders: Requiring solar energy credits under the Alternative Energy Portfolio Standards to be purchased within Pennsylvania. [Senate Bill 404 this session, House Bill 2040 last session.]
-- Manganese Standard: Directs the Environmental Quality Board to propose regulations setting a point source water quality criterion for manganese to an upstream area within 5 miles or less of a known potable water supply or known private water supply within 90 days. [Supported by the Coal Alliance adopting a standard used by West Virginia prohibiting enforcement of a manganese discharge standard unless it was within 5 miles of a water supply.]
-- Conventional Oil & Gas Wastewater Treatment: Requires water treatment facilities providing water disposal services exclusively to conventional oil and gas wells shall be allowed to operate under existing permits through December 31, 2019. \[Supported by conventional oil & gas drilling industry and applies to three privately-operated conventional wastewater treatment facilities.]
-- Wyoming County State Park: Requires DCNR to conduct a feasibility study for the establishment of a state park in Wyoming County, including an appraisal of the fair market value of property proposed for a state park. [No funding provided.]
Click Here for Administrative Code bill amendment + summary.
Links To All Code Bills + Summaries
-- Tax Code: House Bill 542 (Thomas-D-Philadelphia) notice of Sales Tax due requirements for online vendors (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary)
-- Fiscal Code: House Bill 453 (Ryan-R-Lebanon) one vehicle for Fiscal Code now relating to responding to Auditor General Reports  (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary)
-- Administrative Code: House Bill 118 (Kaufer-R-Luzerne) comprehensive opioid package (Click Here for Administrative Code bill amendment + summary) (Click Here for Senate Fiscal Note and summary)
-- Human Services Code: House Bill 59 (Moul-R-Adams) adoption subsidy appeals (Click Here for the amendment + summary) (Click Here for Senate Fiscal Note and summary)
-- Public School Code: House Bill 178 (Day-R-Berks) relating to school security drills (Click Here for the amendment) (Click Here for Senate Fiscal Note and summary).
(Sen. Corman’s press Conference was broadcast by PLS Reporter via the Periscope App.)
NOTE: This article will be updated as new information becomes available.

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