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April 15, 2015 The Honorable Denny McNamara, Chair The Honorable Rick Hansen, DFL Lead Environment & Natural Resources Policy and Environment & Natural Resources Policy and Finance Committee Finance Committee Minnesota House of Representatives Minnesota House of Representatives 365 State Office Building 247 State Office Building 100 Rev. Dr. Martin Luther King Jr. Blvd 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, Minnesota 55155 St. Paul, Minnesota 55155 Dear Representatives McNamara and Hansen: I write in opposition of HF 846DE3, the Omnibus Environment and Natural Resources Policy and Finance Bill, scheduled for hearing this week in your committee. My opposition is based on numerous individual and detrimental provisions in the bill. But my opposition is based more on the fundamental approach that underpins this bill. Transparency and integrity are the fundamental principles upon which Governor Dayton has required all agencies to base their budgets. I agree with these principles. In our budget, we propose reasonable, justifiable solutions to documented problems as well as efforts to meet the demands and needs of citizens and businesses, while continuing to move forward towards our statutory goals for clean water, clean air, and pollutionfree lands. Overall, the Governor’s budget proposal for our agency was a modest 1percent increase to meet known needs and did not rely on General Fund revenues for that increase. I strongly oppose the use of shifts and gimmicks in budgeting. Our budget adheres to the principle that revenue sources (fees and tax receipts) should closely align with the services performed and their related outcomes. On many of these fronts, however, this bill appears to be a step backward. Its provisions result in damaging cuts for the Minnesota Pollution Control Agency (MPCA), cuts that would prevent the agency from maintaining emergency response and cleanup capability and from meeting the Agency’s statutory goals for protecting public health as well as improving and restoring the environment. Moreover, at a time of significant General Fund surplus, it is illconceived to shift funds from MPCA dedicated accounts to increase the General Fund for other purposes outside the MPCA. Fiscal Issues: From a fiscal standpoint, I have two core concerns. First, due to the interplay of caps and transfers in this bill and resulting reductions in the Remediation Fund, the MPCA’s work to clean up closed landfills and Superfund sites would be reduced, and our emergency response capability would be hampered – the latter at a time when increased shipments of oil are crossing our state by rail, pipeline and truck. During listening sessions around the state last year, first responders voiced their strong concerns that the MPCA’s environmental emergency response capability be maintained to support their efforts in dealing with spills of hazardous substances. My second core concern is that it is difficult to see what problems this budget aims to address. Is there a problem that requires the shift of solid waste tax revenues to fund natural resources work? Does the performance of the Agency suggest that the bill’s proponents have found performance deficiencies? If so, what are they? Specific deficiencies in the agency’s performance have not been laid out, either in

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  • April15,2015TheHonorableDennyMcNamara,Chair TheHonorableRickHansen,DFLLeadEnvironment&NaturalResourcesPolicyand Environment&NaturalResourcesPolicyandFinanceCommittee FinanceCommitteeMinnesotaHouseofRepresentatives MinnesotaHouseofRepresentatives 365StateOfficeBuilding 247StateOfficeBuilding100Rev.Dr.MartinLutherKingJr.Blvd 100Rev.Dr.MartinLutherKingJr.Blvd.St.Paul,Minnesota55155 St.Paul,Minnesota55155DearRepresentativesMcNamaraandHansen:IwriteinoppositionofHF846DE3,theOmnibusEnvironmentandNaturalResourcesPolicyandFinanceBill,scheduledforhearingthisweekinyourcommittee.Myoppositionisbasedonnumerousindividualanddetrimentalprovisionsinthebill.Butmyoppositionisbasedmoreonthefundamentalapproachthatunderpinsthisbill.TransparencyandintegrityarethefundamentalprinciplesuponwhichGovernorDaytonhasrequiredallagenciestobasetheirbudgets.Iagreewiththeseprinciples.Inourbudget,weproposereasonable,justifiablesolutionstodocumentedproblemsaswellaseffortstomeetthedemandsandneedsofcitizensandbusinesses,whilecontinuingtomoveforwardtowardsourstatutorygoalsforcleanwater,cleanair,andpollutionfreelands.Overall,theGovernorsbudgetproposalforouragencywasamodest1percentincreasetomeetknownneedsanddidnotrelyonGeneralFundrevenuesforthatincrease.Istronglyopposetheuseofshiftsandgimmicksinbudgeting.Ourbudgetadherestotheprinciplethatrevenuesources(feesandtaxreceipts)shouldcloselyalignwiththeservicesperformedandtheirrelatedoutcomes.Onmanyofthesefronts,however,thisbillappearstobeastepbackward.ItsprovisionsresultindamagingcutsfortheMinnesotaPollutionControlAgency(MPCA),cutsthatwouldpreventtheagencyfrommaintainingemergencyresponseandcleanupcapabilityandfrommeetingtheAgencysstatutorygoalsforprotectingpublichealthaswellasimprovingandrestoringtheenvironment.Moreover,atatimeofsignificantGeneralFundsurplus,itisillconceivedtoshiftfundsfromMPCAdedicatedaccountstoincreasetheGeneralFundforotherpurposesoutsidetheMPCA.FiscalIssues:Fromafiscalstandpoint,Ihavetwocoreconcerns.First,duetotheinterplayofcapsandtransfersinthisbillandresultingreductionsintheRemediationFund,theMPCAsworktocleanupclosedlandfillsandSuperfundsiteswouldbereduced,andouremergencyresponsecapabilitywouldbehamperedthelatteratatimewhenincreasedshipmentsofoilarecrossingourstatebyrail,pipelineandtruck.Duringlisteningsessionsaroundthestatelastyear,firstrespondersvoicedtheirstrongconcernsthattheMPCAsenvironmentalemergencyresponsecapabilitybemaintainedtosupporttheireffortsindealingwithspillsofhazardoussubstances.Mysecondcoreconcernisthatitisdifficulttoseewhatproblemsthisbudgetaimstoaddress.Isthereaproblemthatrequirestheshiftofsolidwastetaxrevenuestofundnaturalresourceswork?DoestheperformanceoftheAgencysuggestthatthebillsproponentshavefoundperformancedeficiencies?Ifso,whatarethey?Specificdeficienciesintheagencysperformancehavenotbeenlaidout,eitherin

  • RepresentativesDennyMcNamaraandRickHansenPage2April15,2015billsortestimony.UnderthisAdministration,theMPCAhasbenchmarkeditsperformanceagainstestablishedgoalsandpriorities;wemonitorenvironmentalconditionsincludingwaterquality,airquality,solidwastedisposalinlandfills,recycling,theefficiencyofourpermittingandenforcementactions,andmuchmore.TheMPCAisaleaderamongstateagenciesincontinuousimprovementeffortsthathaveresultedinsignificantcostsavingsandincreasedtimeliness.Inspecific: The$34.6millioncapontransfersfromtheEnvironmentalFundtotheRemediationFundwould

    limitwhatcouldbespentonemergencyresponse,Superfundcleanups,closedlandfillconstructionandmaintenance,andhazardouswastecleanups.Intheeventofamajorthreattopublichealthortheenvironment,ifaresponsiblepartycouldnotbefoundorwasunabletopayforcleanup,wewouldhavetowaitforoneormoreyearstosecuresufficientfundsfromtheLegislaturetoaddressthesituation.Thecapalsolimitsthetimelinessofcleaningupsitesthatcouldberedevelopedfornewbusinessesandcreatejobs.

    Thebillcreatesastructuralimbalancethatwillcontinueintothefuture.Withthecap,shiftsandtransfersofpenaltieslaidoutinthisbill,theRemediationFundwouldbeinadeficitpositionattheendofFY2017,andtheEnvironmentalFundwouldnolongerbeabletosustaintheRemediationFundasexpected.Fundamentally,thisunsustainableschemeofcapsandtransfersisunsoundfiscalpolicy.Forexample,theAgencyscapacitycouldbelimitedincleanupsofwatersupplycontamination,suchasthoseinBayportandSpringPark.

    MMBisdirectedtotransfer$13.276millionfromtheClosedLandfillInvestmentFund(CLIF)toa

    DNRaccountinthespecialrevenuefund.Further,nofurtherpaymentswouldbemadeintotheCLIFunderthisbill.CLIFwasintendedtobuildasustainablefundbyJuly1,2020thatcouldmeettheongoingmaintenance/managementcostsof113MPCAadministeredclosedlandfillsforwhichthestatesobligationforenvironmentalremediationcarrieswellintothemid21stcentury.Asaresultofthisbill,theCLIFfundwillrunoutofmoneyin13years,or2033,wellshortofknownprogramcosts.

    Anothertransferof$8.1millionfromtheMetropolitanLandfillContingencyActionTrust(MLCAT)

    accounttothespecialrevenuefund,redirectsresourcestoanunrelatedpurpose.MLCATisadedicatedaccountintowhichmetroMetroresidentspayaportionoftheirgarbagebillssothatfundingwillbeavailableforlongtermneedsatsevenlandfills.Citizenspaidintothisaccount,andIdonotagreethattheirpaymentsshouldbeusedtofundnonlandfillactivities.ThistransferwouldleavetheMPCAemptyhandedwhenmoneyisneededtotakecareoftheselandfillsinthefuture.

    Therequestedoperatingincreasesfortheagencyarenotincludedinthisbill,whichimpactsboth

    theEnvironmentalandRemediationFunds.Atatimeofasignificantbudgetsurplus,failingtofundbaseoperationsincreasesseemsunnecessary.Further,thebilllanguageonlines9.179.29directsalloperatingreductionstobemadeinsolidwasteactivities.Thiswillputadisproportionatereductiontoactivitiesincludingcertificationandtraining,solidwastemanagement,solidwastepermitting,andwasteandtoxicpollutionprevention.

  • RepresentativesDennyMcNamaraandRickHansenPage3April15,2015 ThecancellationofthestatutoryappropriationfromtheGeneralFundtotheNaturalResources

    DamageAccount(NRDA)oftheRemediationFund,$906,000overthebiennium,willremovefundsforprojectsthatoffsetthelongtermdamagesofcontaminantsbyimprovinghabitatandtheenvironment.Thisactionalsocutsfundingforstaffthatpursue/obtaindamagesreimbursementstothestate.

    ThezeroingoutoffundingforbiomonitoringstartinginFY2018isofconcern.Thisprogramwascreatedin2007duringthePawlentyAdministration.Itspurposeistohelpbetterunderstandtheimpactofenvironmentalexposuresofcontaminantssuchasmercury,lead,cadmiumandPFCsonpublichealth,includingvulnerablepopulationssuchmothersandtheirbabies.Thesehighlytoxicsubstancesareknowntoharminfant,childandmaternalhealth.Infact,onein10babieslivingontheNorthShoreofLakeSuperiorhavemercurylevelsabovelimits.ThestatutesestablishcleargoalsandresponsibilitiesfortheMNDepartmentofHealthwithsupportfromtheMPCAtobuildanddevelopthisprogram.Onesignificantresultoftheprogram:inWashingtonCounty,ithasbeenclearlydemonstratedthatcleaningupdrinkingwatersourcesleadstoreducingtheconcentrationsofperfluorinatedcompoundsinhumanblood.Thisprogramhasallowedforgreaterawarenessoftheconsequencesofexposuretocontaminantsindrinkingwater,airandsoil.Itshouldnotbeended.Itshouldbefundedpermanentlyinthebasebudget.

    ThezeroingoutoffundingfortheCleanWaterPartnershipprogram,at$800,000/biennium,willend

    alongstandinggrantprogramtooutstatelocalunitsofgovernment.Unlikeotherwaterrelatedgrantprograms,theCleanWaterPartnershipfundscanbeusedtobuildlocalcapacitytocarryoutlocalwaterqualityprotectionandimprovementprojects.Mostavailablegrantsrelatedtothisactivitydonotallowfundstobespenttosupportlocalcapacitythroughthehiringofstafforpurchaseofequipment.

    GovernorsInitiatives:WhileIappreciatetheinclusionoftheMPCAspolicyandtechnical,orhousekeeping,billintheOmnibuslegislation,themajorityoffundingrequestsexpressedintheGovernorsInitiativeswerenotincludedinthebill.OnlypartsoftwooftheGovernorsInitiativeswereincluded: EnvironmentalDataServicesandProgramImprovementswouldbefundedat50%lessthanthe

    Governorsrequestandforonlyonebienniuminthisbill.Thisfundingprovidestheservicesthatbusinessesandcitizensexpectinthisdigitalage.MPCAsgoalistomoveawayfrompaperandsnailmail,andtransitionrapidlytoonlineservicesandapplications.ThisbillwouldsignificantlyimpedeourabilitytodosoanddelayneededenhancementstothebusinesssystemdevelopedandimplementedasareplacementtotheMPCAsagingbusinesssystem.

    TheGovernorsvaporintrusioninitiativeisweakenedsignificantly.Vaporintrusionisanemerging

    problem,whereinsitesthatwerecleanedupinthepastarenowfoundtobethesourceoftoxicvaporsseepingintohomesandotherbuildingsandthreateningpublichealth.Thepetroleumsideofthevaporinitiativeisfunded,buttheSuperfundsideisnot.TheGovernorsbudgetrequestforthiswastocontinuethefundingfromthepreviousappropriation.ThisisneededtosupporttheongoingworkoftheAgencyatseveralexistingsitesofknownvaporintrusion.Asaresult,theMPCAwillhavelessabilitytohelpcitizenswhounknowinglyliveaboveanolddrycleanerorfactorysitefromwhichtoxicvaporsareleakingintotheirbasements.

  • RepresentativesDennyMcNamaraandRickHansenPage4April15,2015TwooftheGovernorsInitiativeswerenotincludedinthisbill:

    ThefirstwouldhaveenhancedtheToxicFreeKidsActbyensuringthatparentsareprovidedinformationontoxicsubstancesinchildrenstoysandfood;and

    Thesecondwouldhavebegunatransparentprocesstorestructureagencyprogramfeestomakethemmoreequitableandsustainable.

    PolicyIssues:Severalpolicyprovisionsinthisbillwouldreduceactivitiesthatprotectpublichealthandtheenvironment.GovernorDaytonisonrecordopposingtheinclusionofunwarrantedpolicyprovisionsinbudgetbills.ThepolicyprovisionsthattheMPCAopposesinthisbill: ThebillincludeslanguagefromHF616andHF617,billsthatwouldaddcostandtimetothewater

    regulationprocesses.TheMPCAtestifiedagainstboththesebillsincommitteehearings.HF616requireslegislativeapprovalofallwaterqualitystandardsthatcontaininnovation,specificlevelsofindustryimpactoranyagencyimpact,andrequiresacostanalysisforallcurrentandfuturewaterqualitystandardsorrules.HF617requiresapeerreviewofeverywaterrelatedstandard,rule,guideline,andofdocumentationaccompanyingwaterrelatedpermits.HF846DE3includesabackdoorcutbecausethefundingconnectedwithrequirementsfromHF616wouldendinFY19.Thebillappropriates$5.3millionoverthebienniumforpurposesofHF617,abillthatduplicatescurrentpeerreview,wouldslowdownpermittingprocesses,andwouldimposecostsonpermitteeswhowouldalsoberequiredtoprovidepeerreviewsofmaterialssubmittedtotheagency.OneexampleofthiswouldbeafeedlotNPDESpermit.Underthisbill,whenfarmersseektorenewtheirNPDESpermits,theycouldberequiredtopayforpeerreviewofthescientificdocumentationtheysubmitinsupportoftheirrequesttoMPCA.

    LanguagefromHF1000,onwildricewaterqualitystandards,wasopposedbyouragencyincommitteehearings.ThislanguageasintroducedwouldimpedetheMPCAsabilitytorespondtopermitrequestsforexpansionsofexistingfacilitiesorconstructionofnewfacilitiesupstreamofknownwildricewaters.Lastmonth,theMPCAannouncedourdraftproposedapproachforthewildricewaterqualitystandard,alongwithadraftproposedlistofwildricewatersanddraftproposedcriteriafordefiningthosewaters.Withthisnewprocessanddefinedtimeframeinplace,theMPCAquestionsthenecessityofthislanguage.

    SignificantchangestotheMPCACitizensBoard,fromHF1394,includeprovisionsthatbegthequestion:Whatistheproblemthatthebillseekstoaddress?TheBoardaddsvaluetotheworkoftheAgency.EntitiessuchastheLeagueofWomenVoterstestifiedtothisbeforetheCommittee.Weopposethisprovision.

    Astudyofcrumbrubber(HF1601)thatisrequiredandfundedwith$50,000inthebillis

    problematic.MPCAdoesnothavetheexpertiseneededtoevaluatethehealtheffectsofcrumbrubber,suchassmallfillparticleinhalation,anddermalabsorption,sowewouldneedtocontractouttomeettherequirementsofthisrider.Further,theappropriatedamountisnotsufficienttoobtainthetypeoforiginalresearchrequiredbythislanguage.Thefiscalnoteonthisbill,preparedbytheDepartmentofHealth,estimatedthecostat$205,000inFY2016and$118,000inFY2017,or$323,000forthebiennium.

  • RepresentativesDennyMcNamaraandRickHansenPage5April15,2015 TheLandfillDiversionTaskForceStudyrequiredinthebilldoesnotlineupwithfindingsofthe

    OfficeoftheLegislativeAuditor(OLA)onthisissue.MinnesotaalreadyhasasolidwasteframeworkthatworksandtheOLAendorsedthisapproach.TheOLAnotedthesystemneedsmoreaccountability,notless,andmorereporting,notmorecredits.IfwewantmorerecyclinginMinnesota,thisisntthepath.Rather,weneedtocreateandstrengthenmarketstogrowthedemandforrecycledmaterial.

    The$500,000foranoutsideconsultanttoassesstheMPCAisunnecessaryandredundant.Italso

    begsthequestion:Whatistheproblem?Whereisitdocumented?BeginningwiththeVenturaAdministrationandcontinuingunderthePawlentyandDaytonadministrations,MPCAleadershiphasworkedtoeliminatesilosandremovebarriersbetweendivisionsoftheagency.Additionally,theMPCAhasaproventrackrecordofdocumentingperformancegoalsandmeasuresthatdemonstrateitsprogramseffectiveness.Thisstudyandotherlanguageearlierinthebillsuggeststheagencyreturntothatpreviousorganizationalandmanagementstructure.ThisappropriationisnotaneffectiveuseofresourcesbecausetheOLAsProgramEvaluationDivisionalreadydoesthiswork.TheOLAhasauditedpartsoftheMPCAintherecentpast:solidwasteoperations,andenvironmentalreviewandpermitting.MPCAhasastrongContinuousImprovementprogramunderwaythatisprovidingmeasureablegains.

    Thebillsprovisionrequiringa90dayadvanced,nonpublic,andexclusivenoticetoproject

    proposersforalldiscretionaryEISandEAWshasthepotentialtodiminishpublictrustintheprocess,becauseitmandatesaperiodofsilencethatworksagainstthegoaloftransparentpublicdiscourse,andprolongstheenvironmentalreviewprocessunnecessarily.

    TheBaseBudgetReportrequiredinthisbillisunnecessarybecausetheinformationitseeksis

    alreadyavailableandprovidedtotheLegislatureduringthebiennialbudgetyears.

    ThelanguageonsubsurfacetreatmentsystemsatcampgroundsisnotthecompromiselanguagethatwasforgedbystakeholdersThisprovisionneedstobecorrected.

    Thenewrecyclingprogramspends$1.3millionattheexpenseofstatutorilyrequiredsolidwaste

    managementactivities.Thisprogramwasnotintroducedasabillnorheardordiscussedincommittee.

    Insummary,duetothefoundationalprinciplesofthisbillandtheproblemsitsprovisionscreate,Iopposethisbill.Sincerely,

    JohnLincStineCommissionercc: MollyPederson,OfficeofGovernorMarkDaytonandLt.GovernorTinaSmith CommissionerDr.EdwardEhlinger,MNDepartmentofHealth CommissionerMonaDohman,MNDepartmentofPublicSafety