Tuesday, June 6, 2017

House Committee Seeks Ways The General Assembly Can Get More Involved In The Regulatory Process

The House State Government Committee Tuesday held a hearing in what it called state regulatory abuses, burdens and legislative oversight of the regulatory process seeking suggestions on how the General Assembly can be more directly involved in the regulatory process.
While the hearing was on regulations adopted by state agencies generally, the focus of many questions were the draft GP-5 and GP-5A general permits DEP has proposed to regulate methane emissions from oil and gas operations and draft changes strengthening a general permit to allow the land application of biosolids (sewage sludge).
The lead off witness was DEP Secretary Patrick McDonnell who provided the Committee with an overview of the regulatory development and adoption process in the agency. (Click Here to read written testimony.)
“As guided by statute and policy, the DEP regulatory process is designed for the input of many interested stakeholders – including legislators, industry organizations, individual companies, small businesses, advocacy organizations, and all residents of the Commonwealth who have a stake in the protection and preservation of public health and the environment,” McDonnell said.  “Stakeholder engagement and public comment are essential to the process.”
“We likely have the most advisory committees of any state agency, and we actively
seek the counsel of these interested and committed volunteers,” explained McDonnell.  “But we don’t stop there. We convene public hearings, stakeholder listening sessions, regional roundtables, industry quarterly meetings, and advisory committee work groups to ensure that we are continually engaging in constructive dialogues.”
He recalled a hearing by the State Government Committee held in 2013 on the regulatory review process which heard testimony from a researcher at Rutgers University who noted Pennsylvania ranked as one of the lowest volumes of rulemaking in the United States and is consistently low year to year.
In 2007, Pennsylvania promulgated 68 regulations [across all agencies], and in 2016, 75, across all of state government. By comparison, in 2007, Washington State promulgated 993 regulations.
The researchers also rated all 50 states on three criteria of regulatory reforms: executive review, legislative review, and fiscal analysis, and found that Pennsylvania and North Carolina have the most regulatory reviews of any state in the nation.
He said they found that Pennsylvania’s current regulatory process is more complex and has more “veto points” than the federal government does – which is why they wrote a chapter on Pennsylvania.
Dr. Borie-Holtz’s testimony noted the uniqueness of IRRC, the existence of a timeline for finalization of rulemaking, and the reviews by three separate entities to ensure the rulemaking does not exceed statutory authority.
Rep. Daryl Metcalfe (R-Butler), Majority Chair of the Committee, said he has a concern about adopting regulations through general permits or technical guidance “skirting” the regulatory review process.  He used the 40+ page oil and gas methane emission control general permits as an example.
[Note: The state Air Pollution Control Act specifically authorizes DEP to adopt regulations on issuing general permits, which DEP did in 25 Pa Code Chapter 127.514.]
McDonnell said DEP made an effort to include all the citations from federal or other sources in the draft permits to make sure all the information was in one place to help the applicants applying for general permits.
He noted the comment period on the methane permits just closed [June 5] and said his goal is not to issue a permit the industry cannot comply with.
McDonnell said DEP learned a lot from stakeholders during the comment period, in particular about the practical mechanics of their operations with respect to methane emissions and will work with those stakeholders on a final version of the general permits.
In response to questions about permit application turnarounds, McDonnell said there are things that were done to DEP and others DEP did to itself over the last decade that slowed permit reviews..
First, he said 10 years of budget cuts and with more than 700 positions lost have had an impact on DEP’s permit programs.  He said, for example in the Oil and Gas Program, one region used to have five people to review permits with additional clerical staff to back them up.  Now they have just two people.
On DEP’s part, McDonnell said he is putting an emphasis on staff training to limit different interpretations of regulations and on having the right IT and management support so employees can do their job.
On concerns about the volume of regulations DEP administers, McDonnell said the agency does administer a broad number of programs from waste, air and mining, to x-ray machines to nuclear power plants [because of the state laws adopted to regulate those entities.]
McDonnell said he has instituted internal reviews, with the help of stakeholders, for programs-- like the erosion and sedimentation control-- to just not “pile on,” but to take a look at how the basic program can be improved.
Part of that review is to “push downward” on the requirements and he pointed to the mining e-permitting initiative which eliminated 20 percent of the information requested on permit modules.
McDonnell, in response to a question, said differences between the regions is an issue which staff training will help address.
McDonnell said his priority is to take the steps necessary to make the department operate as efficiently and effectively as possible.
Layne Baroldi, Synagro Technologies, a biosolids land application company, expressed a concern about the use of general permits (GP-07, 08, 09) to change regulatory requirements.
He said DEP and EPA are doing a “great job” regulating biosolids, but DEP is planning to include a phosphorus index in the next version of the general permit which will help determine how much material can be applied to soil before it becomes a water quality problem.
He noted DEP has not yet begun the public input process on draft changes to the general permit [which is required by DEP’s procedures].
Baroldi said he welcomes the addition of the phosphorus index, but just wants to talk about the science behind the requirement.
Michael Krancer, Silent Majority Strategies, LLC and former DEP Secretary in the Corbett Administration offered his views centered on the GP-5, GP-5A general permits on oil and gas methane reduction.
He started by saying, “Everyday I came to work I was impressed with the professionalism of the department and the staff wanting to do a good job.”
The issue, Krancer, said is DEP is using the general permit process as a “go around” the regulatory review process.  “This is regulation by permit… there is no discretion on whether the requirements are to be complied with and that’s a regulation.”
He said a full regulatory review on those requirements would have brought other issues out into the open for a broader discussion, for example, should leaks from natural gas distribution systems be regulated and whether the general permit will be effective at reducing methane.
[Note: While Michael Krancer was Secretary of DEP, the first version of General Permit-5 dealing with methane emissions from oil and gas operations was issued on February 2, 2013.  During his tenure the agency also proposed a change to a permit exemption #38 setting requirements on air emissions from oil and gas exploration, development, production and associated equipment.]
Kevin Sunday, PA Chamber of Business & Industry, supported an enhanced regulatory review role for the General Assembly similar to the provisions of Senate Bill 562 last session that was vetoed by Governor.    He also expressed support for Rep. Hill’s bill-- House Bill 209 (House Bill  2408 from last year) creating an Office of the Repealer.
Sunday did caution members of the Committee about adopting legislation requiring a vote by the General Assembly on every regulation proposed.
Kevin Shivers, PA National Federation Of Independent Business, said small businesses are sensitive to regulation changes from the tax code to local land use regulations because they do not have a chief counsel on staff or a regulatory compliance officer.
Shivers suggested the General Assembly adopt a moratorium on new regulations while it reviews the current regulatory process for improvements.
He indicated support for legislation requiring the General Assembly to vote on a final regulation-- House Bill 901 (Rothman-R-Cumberland)-- the companion to Senate Bill 561 (Disanto-R-Dauphin) now moving in the Senate. (Click Here for more.)
Dr. James Broughel, Mercatus Center At George Mason University, said Pennsylvania has tens of thousands of regulations in all programs on the books, much higher than states like Arizona and Missouri.
He suggested a cap on the number of regulations could lock in advantages for the state, because Pennsylvania’s regulatory environment actually looks more competitive than neighboring New York and New Jersey
Broughel did note, making the regulatory process more burdensome may actually encourage more “back door” regulations by agency.
Click Here to watch a video of the hearing (when posted).  [Note: This story may be updated as written testimony becomes available.]
Rep. Metcalfe said he expects to scheduled an additional hearing on possible solutions to regulatory issues raised at this hearing in the next two weeks.
The Committee has scheduled a hearing on this topic on June 12 in Selinsgrove to hear comments from entities regulated by the Susquehanna River Basin Commission.
The hearing will be held a Susquehanna University, Stretansky Hall, 514 University Avenue in Selinsgrove, Snyder County starting at 9:30.
Rep. Daryl Metcalfe (R-Butler) serves as Majority Chair of the Committee and can be contacted by sending email to: dmetcalf@pahousegop.com. Rep. Matthew Bradford (D-Montgomery) serves as Minority Chair and can be contacted by sending email to: mbradford@pahouse.net.
(Photo: Rep. Daryl Metcalfe (R-Butler)
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