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