Budget Hearings with Approps Committee

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House Appropriations Committee budget hearing with DEP
2/20/13, 9:30 a.m., 140 Main Capitol
By Kimberly Hess, PLS

The committee held a budget hearing with the Department of Environmental Protection (DEP).

Michael Krancer, Secretary, Department of Environmental Protection, Secretary of DEP, highlighted the past year at DEP.

He reported the department has increased efficiency in all programs, met timeframes 98 percent of the time and whittled the backlog by 40 percent, assisted in ensuring that the refineries in southeastern Pennsylvania remained open, begun implementing a natural gas vehicles program, initiated acid mine drainage initiatives, worked to find the cause of the fish stress in the Susquehanna River, overseen the continuing improvement in the health of the Susquehanna, appointed a new
Susquehanna River coordinator, undertaken permitting of the Homer City generating station retrofit to save and create jobs, overseen air emissions throughout the state are good, and lead the effort to get Presque Isle Bay has delisted from areas of concern list. He concluded it has been a busy year with a lot of positive accomplishments and he plans to keep that up
in the coming year.

Chairman Adolph commended Sec. Krancer for his role in returning the refineries to operation, remarking that it saved 2,000 direct jobs and potentially another 10,000 indirect jobs. He particularly noted the praise of Delta, which is now the first airline operating its own refinery. The chairman then asked about the plan to transfer funding for the conservation districts out of the General Fund, remarking he is “not crazy about” the plan because he likes for the legislature to be able to keep an eye on where the money is. Sec. Krancer, first addressing the refineries, said he was glad to play a part in that bipartisan effort.

Regarding the funding of conservation districts, the secretary explained the void will be filled by Act 13 of 2012. He opined the conservation districts’ financial health will be better served under this funding scheme because they will not be subject to the vagaries of General Fund funding. He suggested they will do well in the future due to the influx of Act 13 funds. Chairman Adolph indicated he does not doubt that, but reiterated that he likes to see a number next to a line item. He pointed out the
situation can change from administration to administration.

Lastly, Chairman Adolph asked for a breakdown of staffing levels and efficiencies at the department. Sec. Krancer replied he is very comfortable with the department’s staffing levels, noting this is the third budget in a row in which he has not had to discuss furloughs. He said the department will be operating more efficiently on permit decisions, noting that the oil and gas program is funded separately and has seen staff double in recent years.

Chairman Markosek pointed out the Hazardous Sites Cleanup Fund receives revenue from the Capital Stock and Franchise Tax (CSFT), which the governor proposes to eliminate. He asked how projects will be funded after the tax is eliminated. Sec. Krancer said the residual funding will last at least a year, at which time $28 million will be available. Jeff Logan, Executive Deputy Secretary of Administration and Management, further explained $40 million will come in this year and another $40
million will come in in fiscal year 2015-16, $7.5 million the next year. The Act 13 impact fee, he continued, will bring FY 2014-15 up to $50 million. Lastly, he noted that the department will have plenty of time to adjust the program and prioritize projects. Chairman Markosek indicated his data indicates revenues will be lower than Logan outlined. He opined the fund
will be severely negatively impacted. Sec. Krancer reiterated the department has time and will continue to think about how it will move forward and will work with stakeholders on that effort. Chairman Markosek discussed the need to be creative in finding opportunities, remarking on how long he has been hearing the same promise on transportation funding. Sec. Krancer offered his supportive opinion of the “bold” transportation plan that has been put forth by the administration.

Rep. Miller, chairman of the Environmental Resources and Energy Committee, asked about the Chesapeake Bay strategy and planning for the major river basins in the commonwealth. Sec. Krancer replied DEP is working with partners to address the Chesapeake Bay strategy. He reported progress made has been “nothing short of amazing for Pennsylvania, especially for agricultural community.” He said all sectors have done their part to put Pennsylvania on target, noting that the federal
Environmental Protection Agency (EPA) has recognized problems with its model and made adjustments. He remarked it is important to make sure the science is right to ensure that the $10 billion investment is made prudently. Regarding the other rivers, Sec. Krancer emphasized each river needs to be addressed separately as they each have their own unique
challenges.

Rep. Vitali, minority chairman of the Environmental Resources and Energy Committee, discussed climate change. He said Pennsylvania contributes one percent of the world’s greenhouse gases yet he has not seen a single statement from the Corbett administration on the subject. He asked the secretary if he agrees with a statement made by the National Academy
of Science which says, in part, that climate change is occurring, it is caused by humans, and it poses a significant risk. Sec. Krancer declined to answer yes or no, pointing out that it is a compound statement with many claims he would have to investigate. The secretary indicated Gov. Corbett has discussed air emissions and said Pennsylvania is doing its role with respect to carbon emissions. He stated the US has reduced its carbon footprint more than any other nation in the world due to increased use of natural gas in electricity generation and also discussed action in Pennsylvania that has lead to reduced emissions, including the support of natural gas vehicles, use of lower sulfur crude in refineries, and co-generation at the refineries. He concluded, “We’re seeing market based solutions to the greenhouse gases issue.” When pressed to agree
or disagree with the statement, Sec. Sec. Krancer said regardless of whether that statement is true, the United States and Pennsylvania are doing a “heck of a lot” on lowering carbon emissions without carbon trading or taxes.

Rep. Vitali asked if the governor has made statements regarding climate change, to which the secretary suggested the question should be
directed to the governor. He also could not confirm the accuracy of the statement that Pennsylvania contributes one percent of the world’s greenhouse gases. Rep. Vitali referred to data from NASA scientists which concluded that carbon dioxide in the atmosphere needs to remain below 350 parts per million. Sec. Krancer declined to agree or disagree with the statement and reiterated his belief that market based solutions will take Pennsylvania in the right direction on that issue. He also emphasized the subject at hand is global warming, not Pennsylvania warming.

Rep. Pyle asked about project syllabus, which is the permit review process and permit decision guarantee. Sec. Krancer explained a project syllabus, much like a college course syllabus, lays out an outline of what is expected of applicants. He noted the program has only been in place for one quarter, thus data is limited. Dana Aunkst, Deputy Secretary of Field
Operations, further explained the program. He said the department is measuring permit data this year against the prior year’s performance to determine efficiency in the number of days to process an application in the four major program areas.

Sec. Krancer stated approximately two percent of applications were denied in the previous system, but up to 40 percent were deficient and required additional work, which generated frustration all around. He said the department now has laid out expectations of what a permit application needs to look like. Aunkst reported the denial rate was 1.31 percent in the nine prior years and was 1.36 percent in the first quarter of the new process. Rep. Pyle indicated he looks forward to receiving
more results as time goes by.

Rep. Pyle then asked about the funding decrease in the line item for sewage facilities planning grants and enforcements under Act 537. He described problems in his district whereby housing projects are rejected because the sewage plants cannot handle the increase. Sec. Krancer replied that item has been cut back since 2008 because of the situation in the state and federal budget. He indicated affected groups have seen it coming and were able to prepare for the reduction, but noted Act 13 will be able to provide some assistance in that regard. Rep. Pyle remarked they will need to learn new ways to deal with the issue.

Rep. Conklin questioned decreased funding for West Nile Virus spraying, noting that an aggressive approach in the past has reduced the number of outbreaks. Sec. Krancer responded the department did increase activity last year, noting a record number of acres were sprayed. He said that while this is more of a health issue, it is housed in DEP. The secretary said
he would provide specifics on the amount of spraying and counties that will be sprayed in the upcoming budget. Chairman Adolph noted a record 93,000 acres were serviced last year. Regarding climate change, Rep. Conklin referred to a comment made by the secretary about the record storms of recent years and asked if those storms are the price of doing business as a result of climate change. Sec. Krancer clarified he was simply referring to the weather; not climate change.

Rep. Petri asked a series of questions about natural gas pipelines. He questioned what interagency efforts and discussions are taking place with the industry, noting that the industry is frustrated with its inability to get easements. He also wanted to know if discussions have been held on how to build out a pipeline system and suggested the interstate system could be used as means to acquire easements. Sec. Krancer indicated the Public Utility Commission is better suited to answer the
questions, noting that DEP’s role is to assure that pipeline projects, when proposed, meet environmental standards like erosion and sediment control. DEP does not address easements. Rep. Petri opined it is incumbent on legislators to find ways and force parties to come together and ease the way to deliver the product to the market.

Rep. Kula discussed air pollution resulting from natural gas drilling operations. She explained several components of the drilling process, including transportation and compressor stations, contribute to air pollution, and particularly discussed a study which found compressor stations are the major source of air pollution from gas production. She asked about a recent proposed rule to address the emissions. Sec. Krancer said that refers to general permit #5, which is an update of the prior general permit. He explained the general permit draws a line for emissions between 75 and 90 percent, and remarked the
report referenced dovetailed with the DEP air emissions report, both of which conclude the unconventional natural gas sector is very minor contributor to air emissions in the state. He reported total emissions have dropped dramatically, largely due to use of natural gas in electricity generation, and suggested natural gas proliferation has established billions of dollars in health benefits. Rep. Kula asked if the department anticipates a new air permit fee. Sec. Krancer replied in the affirmative, explaining “we’re doing such a good job controlling emissions” that the fee proposal needs to be structured because the fees are based on emissions. He said the proposed rulemaking will be open for public comment until April 8, 2013. Rep. Kula referred to new oil and gas rules released from the EPA and asked what DEP is doing to ensure cleaner air and how many Pennsylvania operators currently do green completions. Sec. Krancer said he would provide data on Pennsylvania green completions to the committee. He also suggested an industry trade group may have helpful information, too.

Rep. Millard thanked the secretary for visiting Columbia County to look at flood problems and for the department’s help in resolving issues in acquiring flood damaged property. He then asked about gravel bar removal, remarking that gravel bars can aggravate flooding problems. He mentioned a potential pilot program to enable private interests to remove the usable materials and minimize costs to DEP and asked if the secretary would support such an initiative. Sec. Krancer replied he is always will to discuss ideas, but cautioned such a program would involve permits and the science of how the nature of the river will be affected. He confirmed some funding for flood control will be available through the Commonwealth Finance Authority (CFA) and Act 13 and noted guidelines for flood control projects were recently approved. Rep. Millar remarked it
would be a win-win if municipalities can coordinate with conservation districts to address the bars.

Rep. Santarsiero asked the secretary if he believes global warming is occurring. Sec. Krancer declined to get into positions of agreeing or disagreeing with assertions, explaining that his job is to protect the environment and apply the law. Rep. Santarsiero then asked about the secretary’s earlier statements that certain forms of energy production, including natural gas, have less of an impact. Sec. Krancer agreed and acknowledged that lower carbon emissions are a good thing. He
also provided the committee with a listing of statements made by Gov. Corbett on the subject, which had been provided to him during the hearing.

Rep. Santarsiero asked if the secretary agrees that energy derived from solar, wind, nuclear, and geothermal power is better for the environment for the same reasons. Sec. Krancer reviewed the costs of production,
construction, and life cycle of such energy sources and said, on the basis of pure generation, those products have fewer emissions. He agreed lower carbon emissions is something to strive for. He pointed out that wind and solar energy only account for two percent of energy consumption, even with market stimulants. Rep. Santarsiero concluded that legislation that would propose increased use of low emission energy sources would be a good thing. He also noted the potentially
positive effect on the state’s economy. Sec. Krancer replied requiring the use of one type of energy over another instead of a market-based solution “is a horse of a different color.” He pointed to proposals to expand the Alternative Energy Portfolio Standards (AEPS) have other impact beyond simply the short term appearance of low carbon emissions and has the affect of disincentivizing other sources that are low emission. Rep. Santarsiero disagreed, arguing in preference of a source that
provides electricity with lower emissions.

Rep. Santarsiero then asked why the line item for flood control projects was zeroed out in the budget. Sec. Krancer deferred on funding decisions to Budget Secretary Charles Zogby, but noted funding remains an option under Act 13, the CFA, PA H2O, and PennVEST.

Rep. Grove remarked on the perception that DEP hinders job creation. Sec. Krancer disagreed with that perception and cited numerous businesses that have specifically been helped by DEP. He asked to be put in contact with anyone who feels that way. Rep. Grove was pleased to hear this and suggested the perception may simply be a public relations issue. He then asked about the recycling fund. Sec. Krancer discussed the importance of recycling and said the department is trying to bring about recycling solutions. He mentioned a recent recycling event held at the capitol.

Rep. Wheatley read from a letter that had been sent to the secretary on December 2, 2012, from Rep. Jesse White (D-Washington) and had not yet received a response. He asked the secretary to share the department’s policy on sharing information about possible water contaminations. Sec. Krancer responded he had sent two letters, dated November 6 and November 9, to Rep. White and addressed his concerns. Rep. Wheatley again asked if it is important to the department that
residents know what is in their water. Sec. Krancer referred him to the letters, which he then submitted to the committee.

Rep. Wheatley then asked about training of water specialists and specifically inquired if the department designed the training and if special certifications are required. Sec. Krancer said the department has many experts and offered to provide information on the specific training regime and background of inspectors to the committee. When pressed, he explained different people perform different functions throughout the inspection chain.

Chairman Adolph interjected and expressed his confidence that all the inspectors are adequately trained. He assured Rep. Wheatley that the information will be provided to the committee and disseminated to the members.

Rep. Wheatley explained he was informed of a specialist sent to analyze water who had said he received no specialized certification and training, but had instead completed only an industry-produced program.

Rep. Gingrich noted the earlier mentioned changes in Act 537 funding and asked what can be done to help local governments.

Sec. Krancer reiterated options will be available through PennVEST under Act 13.

Rep. Carroll asked the secretary to let the committee know if he finds the funding for flood control is inadequate. He remarked the flood prone nature of the state demands a proactive approach. Sec. Krancer agreed.

Rep. Carroll then asked about the Bureau of Abandoned Mine Reclamation and for an update on the use of federal dollars. He was particularly
interested in abandoned mine sites in the anthracite region. Sec. Krancer offered to research the question and report back to the committee, indicating that the federal law may have been reversed. Rep. Carroll expressed that he does not want the passage of time to reduce focus on the need to continue the plan to mitigate the obvious problems.

Rep. Day requested an update on oversight of water quality and natural gas drilling activities and to address the current position and future direction on the public transparency on the contents of frack water. Sec. Krancer directed Rep. Day to congressional testimony he presented in May, 2012, which discussed the department’s safeguards. He reported DEP has an expansive program that protects water resources from many activities. In terms of transparency, Sec. Krancer stated
Pennsylvania is on the forefront, and noted Act 13 contains the linkage to frack focus.

Rep. Dean read from the Pennsylvania Constitution and questioned if the secretary shares the trust in duties regarding the environment. Upon receiving confirmation, she questioned the downward trend of DEP budgets over the past decade. She asked if the secretary would like to see greater resources directed to the department. Sec. Krancer countered this year’s budget marks an upward trend, as the General Fund appropriation is increased over the prior year. He also referred
to statements made by his predecessor, John Hanger, who stated the negative impact of General Fund reductions on the environment is overstated because in a typical year only about a third of DEP’s budget comes from the General Fund.

Since then, he continued, fees for natural gas drilling permits have increased. He concluded, the “bottom line answer” is the budget that is presented here is adequate to fulfill the trust discussed by Rep. Dean. Rep. Dean acknowledged the General Fund is not the only source of DEP funding, but lamented it is a diminishing source. She pointed to reductions in positions and programs as reasons for her concern. Lastly, Rep. Dean asked the secretary to consider looking at the affects of climate
change in the budget. Sec. Krancer replied he would consider the request.
Rep. Boback asked if DEP addresses pipeline safety, particularly environmental siting safety in conjunction with the Public utility Commission. Sec. Krancer replied pipeline safety is under the jurisdiction of the Public Utility Commission, noting DEP’s role is limited to ensuring the pipeline sitings meet erosion and stream crossing regulations. He also commented federal pipelines fall under different guidelines altogether.

Rep. Bradford asked about a study of the impacts of natural gas drilling in southeastern Pennsylvania. Sec. Krancer said that study will be conducted by the Department of Conservation and Natural Resources and suggested that department would be better suited to address the question.

Rep. Bradford then asked about a recent controversy regarding the undercounting of wells, which was revealed in a report by a Canadian researcher. Sec. Krancer explained he submitted factual corrections to the author, whom he stated was “very very wrong on his assertions on what Act 13 provides.” Rep. Bradford countered the report created a credibility issue for the department and a perception among average Pennsylvanians. Sec. Krancer indicated he would submit his response to the author to the committee, reiterating that the author made a number of errors.

Rep. Bradford returned to the discussions of global warming and once again asked the secretary if he believes global warming is real. Sec. Krancer replied, “I couldn’t be more clear. Lowering carbon and greenhouse gases emissions is a good thing.” Rep. Bradford again asked if climate change is real. Sec. Krancer replied, “I couldn’t be more clear. Lowering carbon and greenhouse gases emissions is a good thing.” Rep. Bradford countered, “You couldn’t be more opaque.”

Rep. Peifer discussed the high quality exceptional value waters in his district and praised the work of conservation districts. He noted his concern about gravel bars, like Rep. Millard. Rep. Peifer then reviewed his concerns with new regulations proposed for sewage systems. He explained the sewer models could have a real negative economic affect on the building industry, particularly a requirement for a 1,000 foot buffer. He asked what the legislature can do to help the department fight
lawsuits that are resulting in rulings that are leading to these regulations. He argued the streams in his district are clean and protected and there is no need to increase the buffers. Sec. Krancer said the issue is policy and legal and he’s not entirely clear on the concern, but he expressed confidence in the science the department is using. Rep. Peifer elaborated he is told the regulations expanding the buffer zones are due to court rulings to protect waterways, but people in his district are
protecting the water already. He called for a scientific challenge to the court rulings. Sec. Krancer lamented judicial decisions substituting for legislation.

In the interest of time, Rep. Denlinger asked for written responses to his questions. He requested information on the status of the nutrient trading and credit program and specifically a discussion on the impacts of non-source point agricultural farms within south central Pennsylvania. Rep. Denlinger also asked for an update on the department’s interactions with the Fish and Boat Commission on efforts to declare the Susquehanna River as an impaired waterway under the Clean Water Act.

Sec. Krancer confirmed he would respond in writing, but briefly noted Pennsylvania’s nutrient credit program is the envy of the area and the discussion regarding the river have been well-documented.

Due to time constraints, Chairman Adolph adjourned the meeting. He urged members with outstanding questions to submit them to the chairmen.

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House Appropriations Committee Budget Hearing with the Attorney General
2/21/13, 3:30 p.m., Room 140 Main Capitol Building
By Jeff Cox, PLS

The committee held a budget hearing on the Office of Attorney General (OAG) 2013-2014 Budget Request.

Kathleen Kane, Attorney General, testified, “Right now the flat funding that has been proposed by the Governor puts us at about $78 million.” She pointed out that the OAG had increases in expenses including salaries, health benefits and pension payouts that totaled 7.8 percent, or nearly $6 million. Kane told the committee members, “If we are flat-funded, in conjunction with the 7.8 percent increase in expenses, we will actually be losing $6 million this year and we will not be able to maintain the current levels we maintained in 2012.” She explained that this would mean approximately 57 positions would need to be cut and the OAG would have to look at closing some offices. Kane warned, “I believe that puts Pennsylvania in unsafe territory to be quite frank with you.” She observed, “I believe the most basic function of our government is to protect the public.”

Kane said her office is requesting a $6 million increase. She added that is just to maintain last year’s levels. Kane testified the OAG is requesting $7 million with $3 million for a violent street crime unit that “we believe is absolutely necessary for the protection of Pennsylvania.” She went on to warn about the increasing problem with Mexican drug cartels in the Commonwealth. Kane commented, “They are in Pennsylvania, they are taking over our neighborhoods, and they are more violent than the Colombian drug cartels.” She argued, “We have the means to fight them only if we have the funding to fight them. We have got to put more people out on the street.” Kane also spoke about increases for the Child Predator Unit. She pointed out the OAG has identified 2,000 IP addresses in Pennsylvania of people with child pornography. Kane assured lawmakers, “The reason we are asking for the money is not to study, it is not to have a task force or do a blue ribbon panel, it is to actually go out and get them off the street.” She urged the committee to reconsider the Governor’s flat funding proposal.

Chairman Adolph noted that the line item for general government operations in the OAG request has an increase of $3.3 million over the Governor’s proposal or a 9 percent increase over the current year. He wanted to know what is included in that line item and whether it includes costs for information technology. Kane explained that includes all of the Criminal Law Division, the Public Protection Division, and the Civil Law Division as well as all of the Management Services Division. She further explained that within the Management Services Division is the IT division, but that number is not included for the Child Predator Unit. Kane said that number will be included in their additional request. Chairman Adolph asked how many current employees there are at the OAG. Kane responded, “735.” Chairman Adolph then asked Kane how many employees she would like to have one year from now. Kane explained that, comparatively speaking, in 2008, there were 826 employees of which 194 were attorneys and now there are 176 attorneys. She said she would like to be able to put more agents as well as attorneys in the Child Predator Unit because of the demand her office is seeing. Kane also said she would like to fill the vacancies the OAG currently has. She noted the OAG has vacancies right now in the Public Protection Division, which includes consumer protection, and in the Tobacco Division. Kane said, “We don’t want to have to let anyone go.” Chairman Adolph assured Kane that the Appropriations Committee will make a point to consider the cost to carry from one year to the next. He added, “We can’t immediately get you back to 2008 because we aren’t back there yet; because the revenue coming in is just getting back to the 2008 figures and our expenses have grown as a result of various aspects of the budget.”

Chairman Adolph asked Kane how many employees she would like to add to the current 735 employees. Kane explained that within the new initiatives of the OAG the increase is by only 12. She added, “We would like to fill the positions that we have and we would not like to lose any more positions or close any offices.” Chairman Adolph wanted to know if the 12 would be all attorneys. Kane said it would be attorneys as well as agents, but mostly agents.

Chairman Adolph then wanted to know the average salaries of the attorneys in the OAG. Kane responded, “We have a very complex system of salaries in our office.” She added, “I’m still trying to wrap my hands around it.” Kane explained the attorneys have grades as well as ten steps within that grade so it really varies. She pointed out the attorneys “have not had raises in many, many, years.” Chairman Adolph asked that the information be provided to the committee. He then asked Kane about what efficiencies she has implemented to reduce expenses. Kane said 80 positions have been abolished in the OAG since 2008. She added the OAG has not filled 31 positions and reduced the number of paid interns and temporary wage employees in the last couple of years. Kane noted there have been no pay increases for management employees in the years 2009-2010, 2010-2011, and 2012-2013. She added that in 2011, the previous administration gave a very small increase to management employees. Kane said her office is looking at the closure of five smaller offices if it becomes necessary and more may have to be closed if funding is not restored. She added limits have been place on out-service training and the OAG has reduced funding for education and outreach programs. Kane also said all cell phone plans have been reviewed for efficiency and reduced the number of attorney membership dues for the Pennsylvania Bar Association.

Rep. Parker commended Kane for her testimony before the Senate Appropriations Committee and her strong stand on closing the “Florida loophole” and reviewing all of the Commonwealth’s reciprocity agreements with other states. She also commended Kane for her positions in support of lost or stolen legislation and universal background checks to control the flow of illegal handguns. Rep. Parker then discussed the witness relocation program. She wanted to know what counties other than Philadelphia have utilized the program. According to Kane, the counties include Allegheny, Westmoreland, Somerset, Centre, Dauphin, Lancaster, Chester, Delaware, Montgomery and Bucks. Rep. Parker asked if most of the cases within the program involve homicides. Kane said that the numbers have indicated that a majority of them related to gun crimes. Rep. Parker commented that State Police Commissioner Noonan told the committee there were 500 homicides in Pennsylvania. She added she attended a meeting last week where Mayor Nutter indicated 331 of those homicides were in Philadelphia. Rep. Parker said Philadelphia “understands the importance of the witness relocation program.” Kane commented, “The importance of the witness relocation program can never be overstated.” She told the committee members, “If we cannot protect the witnesses and victims of crime then they will not testify. If they don’t testify, we don’t have a case.” Kane expressed concern that the program is currently running out of money and encouraged support for the OAG’s proposed $101,000 increase for the program. Rep. Parker said that when Mayor Nutter met with the Philadelphia delegation he noted New York’s reduction in violent crimes as the result of some local initiatives. According to Rep. Parker, Mayor Nutter asked the delegation to strongly advocate for enhanced penalties for anyone caught carrying a firearm illegally in Philadelphia. She indicated Rep. Taylor is planning to introduce legislation in that regard and she wanted to know if Kane could support the bill. Kane said she would have to take a look at it before commenting. Rep. Parker said several school safety initiatives will be introduced this legislative session and she asked Kane to participate in the discussions regarding the legislation. Kane said she would.

Rep. Gingrich expressed alarm with what Kane had said about the Mexican drug cartels. She noted that State Police Commissioner Noonan did not mention gang-related crime during his testimony. Rep. Gingrich wanted to know Kane’s sources for the information on the cartels and about the role of the State Police and the OAG. Kane responded that the information was from the National Drug Intelligence Center and deals specifically with Mexican cartels. Regarding Noonan’s testimony, Kane commented, “I am wondering perhaps there is a different usage of terms.” She said, “We don’t categorize them as gangs, we categorize them as drug trafficking organizations.” Kane said the problem is not limited to Pennsylvania or just the Mexican drug cartels. She added there still are traditional street drugs and street gangs. Kane told lawmakers that the problem with the Mexican drug cartels is law enforcement is not equipped to deal with them right now. She noted the cartels came to Pennsylvania in the past two year and warned “they are more violent than the Colombian drug cartels.” Kane said she will be attending a conference of the National Attorneys General Association on the subject of Mexican drug cartels. She stressed the importance of working together with the State Police as well as federal and local law enforcement on this issue. Kane once again explained the importance of her proposed violent street crime unit. She indicated she has already spoken to Commissioner Noonan.

Minority Chairman Caltagirone pointed out he represents the city of Reading, which he said has been listed as “the most violent city in the United States.” He noted the increased drug activity by the cartels in the Reading area. Chairman Caltagirone also noted that as crime has been increasing in Reading, the city has had to reduce its police force by 50 officers. He said most third class cities in Pennsylvania “are plagued with this problem.” Chairman Caltagirone also said he has been involved in a group to try to come up with a plan to interdict the drug supply before it reaches the street. Kane responded, “We are ready to get out on the streets with you.” She noted that one tool her office has which is not available to the State Police and local law enforcement is the authority for wiretaps. She described wiretaps as “a source of good information.”

Chairman Caltagirone pointed out that federal law enforcement agencies such as DEA have closed their offices in Reading. He said he hopes efforts can be coordinated with federal law enforcement offices. Kane said she has already met with the federal attorney for the Middle District and “he’s on board.” She told Chairman Caltagirone he will see results in the coming year.

Rep. Pyle wanted to know how many lawyers Kane wanted to add with the proposed $6 million increase. Kane responded, “We are asking for a $6 million increase so we can stay at the funding levels from last year.” She added, “Funding levels right now are $78 million and last year we had a 7.8 percent increase in expenses.” Kane once again told the committee members that if the OAG is flat-funded they will have to reduce their staffing level by 57 positions. Noting his legislative district is located in western Pennsylvania, Rep. Pyle commented that the problem in his area is heroin, which is coming from Detroit through Cleveland and then through New Castle to his area. He urged Kane to look at the Cleveland area and have her office speak with the State Police barracks in Kittanning. Kane responded, “I will.” Rep. Pyle wanted to know how much of the $6 million will be used for the review of reciprocity agreements. Kane responded, “None.” She explained that the agreements are reviewed by the Office of the Chief Deputy Attorney General, which reviews all of the state’s contracts and agreements. Kane indicated her office has identified four states who have changed their laws regarding handgun permits and her office wants to make sure those laws have the same safeguards as Pennsylvania law.

Rep. Dean commented that she has been involved in the establishment of the PA Safe Caucus. Kane commended Rep. Dean for her involvement. Rep. Dean asked for details in the closing of the “Florida loophole.” Kane explained that in 1995 the General Assembly granted the Attorney General to review and sign reciprocity agreements regarding firearm permits. She described the agreement with Florida as “poorly drafted.” According to Kane, at that time Florida’s law did not include a residency requirement so if a Pennsylvania resident could not get a permit in Pennsylvania that resident could apply for a permit from Florida and because of the reciprocity agreement that Florida permit could be used in Pennsylvania. She noted that the Florida law now has a residency requirement. Kane emphasized that the closing of the loophole does not affect Pennsylvania permit carriers. She added that about 4,000 Pennsylvania residents had a Florida permit, including some residents who were denied a permit in Pennsylvania. Kane commended the General Assembly for enacting legislation increasing the penalties for straw purchases. She said 40 percent of gun crimes involve a firearm obtained through a straw purchase. Kane emphasized the need for lost or stolen legislation, which she said protects the gun owner and the public, and the need for universal background checks. Rep. Dean asked if the OAG has a good relationship with the Pennsylvania Instant Check System (PICS) and the National Instant Check System (NICS). Kane responded, “We do now.” She gave a brief overview of some of the previous problems involving the systems.

Rep. Denlinger wanted to know Kane’s position on legalizing marijuana and whether it is a gateway drug. Kane responded, “My first inclination as a prosecutor was that it was a drug and once your high does not come from marijuana it needs to come from someplace else.” She added, “However, I will state with certainty that I know what I know and I know what I don’t know so I am not afraid to say I don’t have the information. Kane told Rep. Denlinger, “I would like to see more studies regarding the use of medical marijuana, regarding its effects and how other states dealt with the fallout, if there is any. At this point, I don’t think I have enough information to make an intelligent decision and I would rather hold off until I have even more information.” Rep. Denlinger then asked Kane about her approach to the Commonwealth’s current marijuana laws. Kane said she would continue to prosecute violations of the law “until the General Assembly tells us differently.” Rep. Denlinger asked about the proposed increase for Medicaid fraud detection and what the rationale is for the increase. Kane explained that the program is 75 percent federally funded and the state funds the remaining 25 percent. She said the reason for the increase is to make sure the OAG can keep the federal grant because it is matching.

Rep. Carroll commented that the Bureau of Consumer Protection is the one division of the OAG that the average Pennsylvanian interacts with and he described it as “a vital entity in your office.” He said he hoped Kane “will not lose focus on the importance of the Bureau of Consumer Protection.” Kane responded that bureau personnel has been reduced from 93 to 73 employees since 2008 but it still responded to 41,000 calls and helped secure $93 million for Pennsylvania. She said she will not lose her focus on the importance of the bureau to Pennsylvania consumers.
Representing York County, Rep. Grove spoke about the drug and gang activity along the I-83 corridor. He noted the OAG budget has three separate lines for Drug Law Enforcement, Local Drug Task Forces and the Drug Strike Task Force and there is an increase for all three. He wanted to know if consolidating the three would be a better way to utilize resources. Kane responded that the increases are due to increased expenses for salaries, health benefits and pensions. She described Drug Law Enforcement, Local Drug Task Forces and the Drug Strike Task Force as “three different animals” and said she is not sure how easy it would be to try to consolidate them. Rep. Grove asked about the Joint Local-State Firearm Task Force. Kane said it has been “very successful.” She noted since its inception the Task Force has opened 2,325 investigations, arrested 804 individuals, and recovered 1, 678 illegal firearms. Kane also noted that in 2012, the Task Force opened 296 investigations resulting in 160 arrests and the recovery of 183 firearms. Rep. Grove commented that he would like to discuss expanding the task force to third class cities sometime in the future. He then noted drugs, guns and gangs seem to be the same thing and asked Kane if there is a need for specialization in each of three categories. Kane responded, “Yes.” She explained the differences in the three categories and why they are specialized categories.
Rep. Kula noted the Criminal Justice Enhancement Account was established in 2005. She wanted to know the status of the reimbursements to the counties. Kane pointed out that reimbursements are another “pass through” for the OAG and explained that the counties have been reimbursed up to and including 2010. She said a portion of the counties have been reimbursed about $75,000 each up to calendar year 2011. Kane added the Commonwealth still owes the counties about $31,000 each, which is about $2 million.

Rep. Mustio asked for an update on Kane’s review of the West Penn/Highmark merger. Kane responded that the review has been completed and her office has no objection. She said it is also under review by the Insurance Commissioner.

Rep. Bradford wanted to know the impact of the impending federal sequestration on the OAG. Kane responded that at this time she does not know the effect it will have. Rep. Bradford commented that many communities in southeastern Pennsylvania have become frustrated with the General Assembly’s failure to enact lost and stolen legislation and have begun enacting local lost and stolen ordinances, which he expects will be challenged in court. He asked Kane about her views on the issue of clips and magazines for firearms. Kane said she recently participated in the roundtable discussion with Vice President Biden and other law enforcement representatives regarding gun laws. She expressed strong support for the 2nd Amendment but added she does not believe “a 70 round clip is for hunting or sport.” Kane said it is time to look for reasonableness in some of the laws. Rep. Bradford wanted to know the cost to the Commonwealth for challenging the federal Affordable Care Act in court. Kane said she did not know and she would have to get back to the committee with the information. Rep. Bradford asked about the lawsuit filed yesterday by the NCAA against the Commonwealth. Kane explained that her predecessor Linda Kelly decided the Office of General Counsel (OGC) should handle antitrust lawsuit filed by the Governor. Regarding the NCAA suit, Kane pointed out the one of the duties of the OAG is to defend the Commonwealth in court. She said it will be up to Governor to decide to have OGC, an outside counsel or the OAG defend the Commonwealth in the NCAA suit.

Rep. Boback wanted to what other types of fraud are investigated by the OAG in addition to Medicaid fraud. Kane explained how the OAG is involved in multi-state lawsuits regarding fraud. She cited some recent examples such as the recent lawsuit against Standard & Poor’s and recent settlements involving Toyota and mortgage fraud. Kane said her office is looking at a number of other multi-state lawsuits. She told the committee members, “Fraud is theft.”

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Senate Appropriations Committee budget hearing with DEP
2/21/13, 1:00 p.m., Hearing Room 1, North Office Building
By Kimberly Hess, PLS

The committee held a budget hearing with Department of Environmental Protection (DEP) Secretary Michael Krancer.

Sen. Yaw, chairman of the Environmental Resources and Energy Committee, asked if DEP has enough “boots on the ground” in the oil and gas program and if the program is adequately funded. Sec. Krancer answered affirmatively, but noted the permit fee package is in its third year and is under review. Sen. Yaw asked about the permit application backlog that Sec. Krancer inherited. Sec. Krancer explained the department has implemented a new permit decision guarantee program and in the first quarter has seen a dramatic improvement. He said efficiency improved in all program areas and timeframe targets were met 98 percent of the time. he stated the backlog has been reduced by 40 percent and assured the members that the department has not sacrificed quality in its effort to reduce the backlog. Sec. Krancer further explained one of the benefits of the new permit guarantee is that the department has laid out its expectations for submitted applications and is now able to spent more time reviewing applications and less time fixing them.

Sen. Yaw next asked about the quality of the Susquehanna River and issues surrounding smallmouth bass. Sec. Krancer reported the Susquehanna River Basin Commission issued a report just last week on the state of the river and that report observes that the quality of the river has improved steadily over the past few years. He noted small mouth bass questions have been raised and DEP is very committed to finding an answer to the issue. Sen. Yaw questioned if prescription drugs in the water could be a factor in the bass problems. Sec. Krancer responded that is an issue worth looking into and is one of many angles to take.

Sen. Yudichak, minority chairman of the Environmental Resources and Energy Committee, announced his pleasure that the secretary has offered his support for SB 411 regarding the use of acid mine water in natural gas drilling. He asked how the department will coordinate with drilling companies to advance the goals of the legislation. Sec. Krancer replied “the ball will be in their court” to determine if that is a course of action they want to pursue. If they do choose to do so, he explained, they will have to apply for the necessary permits. He further explained that he is already encouraging drillers to utilize waste water when fracking. Sen. Yudichak asked about the status of the drill cutting study and if they can be of beneficial use for reclamation. Sec. Krancer replied that process is just beginning and will take about 14 months to complete. He remarked it will be the most comprehensive study of its nature in the country.

Sen. Yudichak asked about abandoned mines and specifically inquired if the department coordinates with the current natural gas drillers in terms of finding abandoned wells. Sec. Krancer said he is very aware of the problem, noting the number of abandoned wells is “in the six-figures.” He indicated current well drillers will take stock of what is around them in that regard.

Lastly, Sen. Yudichak asked for an update on the auditor general’s recent announcement that he will be conducting a performance audit on DEP’s water testing and waste processing. Sec. Krancer said he has a meeting set up to meet with the auditor general and determine the parameters of the audit. He confirmed DEP will be very supportive of the audit, remarking “We’re very bullish about the standards we use and always engaging in discussions to improve.”
Sen. Ferlo opined the secretary is unavailable to public forums, noting that he does not recall ever seen the secretary in attendance at Marcellus Shale industry related events he has attended. He asked the secretary if he would attend a hearing of the Senate Democratic Policy Committee if invited. Sec. Krancer expressed his disappointment with the perception, explaining that he has attended a number of events over the years including a House Democratic Policy Committee hearing. He offered to provide information to the committee on the events he has attended. Regarding attendance at a hearing, he stated he welcomes invitations and will determine his availability from there.
Sen. Ferlo asked for information on the number of unconventional wells in the commonwealth, citing conflicting reports. Sec. Krancer confirmed the department is “absolutely aware” of all permitted wells and said he would provide such data to the committee.

Sen. Ferlo pointed out 1,100 citations were issued in 2011 but 90 percent of them resulted in no fines. He asked why no fines would be issued, remarking that Pennsylvanians are demanding proper enforcement and citation of “an industry run amuck.” Sec. Krancer noted inspections increased from 10,000 to 12,000 over the past year and at the same time violations are down 50 percent. He explained the goal of a notice of violation is to bring the situation to the attention of the operator in order to correct the problem. He concluded most notices result in correction and do not escalate. Sen. Ferlo argued many companies are repeat violators. Sec. Krancer did not agreed with the characterization, reminding the senator that DEP issued the highest fine in the history of the industry a few years ago.

Sen. Baker expressed great concern with the Sewage Advisory Committee recommendations, explaining the proposed regulation will have crippling impacts on small businesses and development in her area. She said all the watersheds in the county are exceptional or high value and questioned the need for the new requirements and asked the secretary to commit to meet with residents in the region. “This is entirely detrimental to our community. We’ve worked very hard, very diligently” to have exceptional waters, she concluded, and the proposed layers will be very challenging. Sec. Krancer indeed committed to the requested meeting and remarked the impacts underscore the importance of who sits on the judiciary because judges do not always anticipate unintended consequences. Sen. Baker concurred it is difficult to explain to her constituent that the requirements were not the result of a decision made by elected officials.

Sen. Baker then asked about the transfer of funding for conservation districts from the General Fund to funds from Act 13 of 2012. She said her local conservation districts are quite concerned about shortfalls, pointing out that they will not qualify for additional funding if they do not have spud wells yet they face additional responsibilities from gas pipelines. Sec. Krancer opined the funding will be more than adequate and will also be a more reliable source of funding because it will not be subject to the vagaries of General Fund funding. He concluded conservation districts will be in better shape than they would be otherwise. Sen. Baker asked that the department consider the activity related to pipelines and suggested the law may need to be revisited.

Sen. Schwank noted she previously served on a conservation district and she argued that while state funding from Marcellus Shale may or may not increase, many counties are reducing their payments to the districts. She also noted that conservation districts receive a portion of funding from building permits, which have declined over the past few years. She concluded the districts are facing funding issues, which could have dire consequences. Sen. Schwank then discussed the burdens of the cost to build sewage treatment plants and asked if there is another option. Sec. Krancer remarked on the diversity of funding issues and agreed with the point on building permits, but noted the trend appears to be reversing. He commented, “We’re potentially on the cusp of rebuilding and revitalizing Pennsylvania’s economy.” The secretary then offered to have a conversation on the question of sewage treatment plants, remarking that he is always looking for less costly, more efficient, equally protective solutions.

Sen. Solobay offered praise for the department’s “boots on the ground” in his district. He then asked what steps the department has taken to streamline and standardize procedures, as the secretary pledged in his confirmation hearing. Sec. Krancer reported the department has made tremendous progress in that regard. Dana Aunkst, Deputy Secretary of Field Operations, who was charged with addressing consistency issues, explained the department underwent a significant reorganization in 2011 and has ensured that everybody throughout the chain understands procedures. He emphasized the importance of communication. Following the reorganization, Aunkst continued, the permitted process was examined to ensure consistency in procedures across the commonwealth. He said the department’s new permit review process includes standard operating procedures for each type of permit or application. He concluded, the department has made significant progress toward consistency and efficiency.

Sen. Solobay then discussed conflicting information from the Environmental Protection Agency (EPA) and hospital, explaining the EPA decries the emissions of coal fired power plants yet hospitals are reporting premature infant deaths are below the national average. Sec. Krancer confirmed a recent air inventory found Pennsylvania’s emissions are way down, which creates billions of dollars in health benefits. Sen. Solobay expressed his frustration with the EPA’s position. Sec. Krancer noted coal fired power plants are subject to strict emission standards.

Sen. Tomlinson followed up on the last line of questioning and said he was once told that the quality of the air coming into Pennsylvania is not good. He asked if DEP has data on that. Sec. Krancer indicated that issue is a matter of perspective, pointing out that states to Pennsylvania’s north and east believe the air coming out of Pennsylvania is not clean enough, to the point that New Jersey initiated a lawsuit. He confirmed he does have data on air quality and said he would provide it to the committee, noting that the federal Clean Air Act requires the states to be good neighbors to each other.

Sen. Vance asked about the permit backlog. Sec. Krancer replied the backlog is currently 6,000 and Aunkst explained the department is working from oldest to newest and is contacting the applicants to confirm they still want the application. Aunkst explained that the department will reach a point where the remaining applications are those where the applicant had to apply but did not necessarily want the permit, which he called the “high hanging fruit” that will slow the progress. Sec. Krancer said the goal is to eliminate the backlog by June, a goal he called “realistic.”
Sen. Vance then asked about the department’s role in implementing the new law which prohibits disposal of electronics in landfills. Sec. Krancer said he would report back to the committee on the mechanics of the law, but noted he attended a recycling event in the Capitol a few weeks ago and saw “great excitement” about the new law which was put into effect last month.

Sen. Vance asked how much money DEP and PennVEST funneled to conservation districts in fiscal year 2012-13. Jeff Logan, Executive Deputy Secretary of Administration and Management, replied DEP provided $2.8 million to conservation districts, Agriculture provided $1 million, the Public Utility commission provided $1.25 million, and the Public Utility Commission to Agriculture to DEP to the conservation districts was another $1.5 million.
Lastly, Sen. Vance asked who is monitoring the bass issue. Sec. Krancer replied a number of stakeholders are involved, including DEP and the Fish and Boat Commission. He reported DEP had 187 days sampling the river last year and remarked it is a team job to determine the cause and course of action. He could not provide a timeframe.
Sen. Vogel discussed two bills he introduced last session, one which would repeal the summer gas requirement for Pittsburgh and one which would exempt new vehicles from emissions testing, and discussed the cost of these requirements to consumers. He asked for an update on the state implementation plan. Sec. Krancer said the department is working on analyzing what is necessary to put it into play, noting it is a multi-party process because the state implementation plan is federal law. He outlined the procedure the state must follow in order to change the plan and discussed the need for broad discussions and studies to determine the course of action. Sen. Vogel opined addressing the summer blend should be a top priority because it is an undue burden on consumers.

Sen. Argall requested additional information on the prospective funding stream for conservation districts and for a timeline on when the remaining tire piles will be cleaned up. Sec. Krancer confirmed he would get that information to the committee.

Sen. Blake thanked the secretary and DEP’s northeast regional office for their responsiveness. He then discussed the sewage facilities planning and enforcement grants and the 537 permit process and asked for an update. Sec. Krancer pointed out Act 13 has a role in the sewage facilities planning grants with respect to funding through PennVEST, PA H2O, and the Commonwealth Financing Authority (CFA). Logan reviewed the funding for the program, explaining 75 percent of the Marcellus Shale Legacy fund is available for those activities, which includes Act 537. He said the grants will go through CFA and are the source of funding for municipalities to apply.

Sen. Blake next asked about funding for flood control projects, noting it has been zeroed out in the budget. He called for a proactive approach to flood control. Sec. Krancer replied the legislature responded to that concern by authorizing funds through Act 13. Sen. Blake opined Act 13 is insufficient.

The senator then asked about the natural gas vehicle program. Sec. Krancer replied “this program generated more interest amongst people of Pennsylvania than I’ve seen in a generation.” He said he would provide specific information to the committee, but remarked his sense is the program will be oversubscribed. He also noted two other programs, one providing for vehicles under 14,000 pounds and the other seeking to convert state fleet vehicles. He remarked swapping out foreign oil for homegrown, cleaner natural gas is a tremendous opportunity. Sen. Blake remarked there is “no question” that the demand side needs to be addressed.

Lastly, Sen. Blake asked if the state is in position to deal with new recycling markets. Sec. Krancer responded he is never satisfied with where he is and is always striving to do better. He remarked the recycling event he mentioned earlier was “real encouraging” as the private sector is working to match supply and demand to recycling. He remarked it is a testament to how the private sector works to find market solutions to issues.

Sen. Mensch asked about funding for the Hazardous Sites Cleanup Fund (HSCF), which is funded from the to-be-eliminated Capital Stock and Franchise Tax. Sec. Krancer replied the residual funding will give the state time to find a solution. Logan reviewed the projections for the next few years, stating $40 million will come in this year and another $40 million will come in during fiscal year 2015-16, $7.5 million the next year. The Act 13 impact fee, he continued, will bring FY 2014-15 up to $50 million. Sec. Krancer assured the question is what, if any, additional funding will be optimal.
Sen. Mensch next asked about the status of the implementation of MS4, remarking that small municipalities very concerned about the cost consequences. Sec. Krancer offered his willingness to help ease the transition and expounded on issues that arose with the EPA. He concluded the issues have been resolved as best as could be hoped under the circumstances.

Sen. Vulakovich asked about brownfields. Sec. Krancer responded brownfields are one of his passions and confirmed the department has undertaken several, including the hockey arena in Allentown. He said the brownfields can be used to draw companies into Pennsylvania.

Sen. Vulakovich requested an updated on tire pile remediation, remarking the piles “look like hell on earth.” Sec. Krancer reiterated the state is making progress and only five percent of the pile remains. Lastly, Sen. Vulakovich asked to set up a meeting for a person who has a potential big idea on the use of the tires. Sec. Krancer confirmed he would love to engage.

Sen. Waugh asked how the 22 percent increase to PennVEST will be programmed and, before hearing the answer, suggested that it would be helpful to provide assistance to homeowners faced with prospect of having to install septic or connect to sewer for no reason except they’re in a bad situation and forced to do it. He opined PennVEST would be a good place to provide relief, even if in the form of a low interest loan. Sec. Krancer noted PennVEST is a separate entity but said he would provide the requested information. He indicated he is open to broader discussions on the senator’s suggestion.

Sen. Waugh noted DEP’s budget includes proposed funding of $8.5 million for agricultural conservation easement and asked if that is a straight transfer to the Department of Agriculture, because DEP does not have an administrative role in that program. Sec. Krancer said he would provide more information to the committee, indicating that he is not familiar with the line item.

Sen. Waugh next expressed concern with responses to flooding, explaining that a regulatory change may solve one problem but can create problems elsewhere. He called for prudence in the process.

Sen. Yaw discussed the advantages of single stream recycling and mandatory curbside pickups. He asked the secretary to look at the law on the subject, opining that it is out of date. The senator also suggested that single stream recycling be implemented in the Capitol and other state buildings. Sen. Yaw also asked about DEP’s fee schedule for permitted gravel quarries, citing one quarry whose fees increase ten-fold. Sec. Krancer said the noncoal fees are based on size and said he would provide additional details to the committee. Lastly, Sen. Yaw asked for more information on the status of stream clean pilot project in Bradford County, which the secretary said he would provide to the committee.
Sen. Yudichak noted Act 13 provided for the funding stream to the CFA to be securitized to raise more funds to help communities and asked if DEP supports that securitization. Sec. Krancer was not familiar with that aspect of the law and said he’d look into it, but remarked if it is in the law it must be allowed. Sen. Yudichak next asked the department’s plans to address the federal surface transportation bill regarding abandoned mine reclamation funding, noting that Pennsylvania stands to lose $200 million over next ten years. Sec. Krancer was not sure of the status of that law, indicating that it may have been reversed. He said he would research the issue and report back to the committee.

Sen. Tomlinson congratulated the secretary for his work in keeping the refineries of southeastern Pennsylvania open and asked about the purported improved emissions from the refineries. Sec. Krancer remarked it was a “labor of love” to work to save the refineries and 22,000 jobs. Regarding emissions, he confirmed they will decrease due to the fact that one refinery is no longer operating as such, domestic low sulfur crude will be used, and the plants will employ co-generation.

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Senate Appropriations Committee budget hearing with DCNR
2/25/13, 3:00 p.m.., Hearing Room 1, North Office Building
By Kimberly Hess, PLS

The committee held a budget hearing with Richard Allan, Secretary, Department of Conservation and Natural Resources (DCNR).

Sen. Yaw, chairman of the Environmental Resources and Energy Committee, asked about natural gas leasing in Tiadaghton State Forest, explaining there has been controversy surrounding the use of the land and subsurface mineral rights. Sec. Allan confirmed those tracts of land have a unique role in the department. He explained the forest includes more than 25,000 acres owned by two 50 percent partners and DCNR does not own the subsurface rights. He said the companies own surface and subsurface rights for about 7,700 of those acres and the department was approached about drilling on those tracts. To date, he affirmed, the owners have agreed not to do any drilling activity on the land. He indicated the tracts are in the center of the plot and further noted the department is looking into its rights regarding access to the tracts. Sen. Yaw asked about the royalties the department is receiving from drillers. Sec. Allan explained the royalties are deposited in the Oil and Gas Fund and the department draws upon that fund, as approved by the legislature. He said the department will have about $60 million in royalties by the end of this fiscal year and of that, the first $50 million has been approved for spending. Sen. Yaw pointed out the more money the department draws from the Oil and Gas Fund, the less it needs to draw from the General Fund. He asked if those dollars are used for general operations. Sec. Allan confirmed the funds are used for anything DCNR is authorized to do.

Sen. Yaw asked about the line item for forest pest management in state forest operations, which was zeroed out. Sec. Allan confirmed that item has been transferred to forest operations and will receive $2 million. He explained the pest management office has been consolidated and moved to the Rachel Carson Office Building in order to increase efficiency, which will save about $125,000 each year. He noted the department is also leasing a state-of-the-art lab from the Department of Agriculture.

Sen. Yudichak, minority chairman of the Environmental Resources and Energy Committee, recalled that funding for the Keystone Recreation Parks and Conservation Fund was important part of debate in last year’s budget and asked if that will recur this year. Sec. Allan replied it will not, pointing out that the funding remains in the budget.

Sen. Yudichak then referred to a letter the department sent to one of the aforementioned companies with land ownership in the Tiadaghton state forest and asked what the 500 acres in proposed converted areas refers to. Sec. Allan said that is the total impact if all the total acreage was accessed by the company and that there would be any development, like well pads and pipelines. He indicated such activity would not affect the state’s moratorium on drilling because these companies are subsurface owners. He emphasized this situation is only about access.

Sen. Yudichak commended the department for 15 straight years identified as independently certified for state forest management. He asked if the moratorium helps in the management of environmentally sensitive areas. Sec. Allan replied the department constantly monitors the forests, noting it is the largest state-owned forest with the certification in the country.

Sen. Yudichak asked how many wells have been drilled on DCNR lands, how lease arrangements work, and how DCNR interacts with the Department of Environmental Protection (DEP). Sec. Allan replied DCNR manage its leases with the companies and has implemented best management practices and guidelines for them to follow. He noted DEP inspects the wells and DCNR enforces its leases and reported 902 wells have been approved by DCNR, of those 859 are permitted by DEP, of that 559 have been drilled, and of that 307 are producing.

Lastly, Sen. Yudichak praised the Heritage PA program and asked if its funding has been eliminated. Sec. Allan stated the funding was eliminated in last year’s budget and that is being carried forward. He noted $2.3 million will be available in the form of community conservation grants.

Sen. Rafferty remarked on the importance of the Keystone Fund and encouraged the secretary to ensure it remains available.

Sen. Solobay asked about a restoration project in his district. Sec. Allan said the department intends to rebuild the dam and the lake and will be meeting shortly with affected parties. He said he expects the process to move forward in the near future. Sen. Solobay asked if the figures being discussed in the settlement will be sufficient to refinish the whole facility. Sec. Allan confirmed it will be.

Sen. Solobay asked if the department has had conversation with the Pennsylvania Game Commission about development on commission properties. He explained he has heard that the development is opening the canopy and allowing growth of food plots, which is benefiting wildlife. Sec. Allan confirmed he is seeing the same thing and stated the department works closely to assess the impact of development on wildlife.

Sen. Solobay remarked on the need for modernization of facilities in some places. Sec. Allan said the department provides a quality and affordable recreational service to citizens, ranging from camping to the top of the line nature inn at Bald Eagle. He explained the department needs to use the funds it has to get the best return. He remarked the department has no plans to build any more facilities like the nature inn and said additionally dollars will be dedicated to infrastructure maintenance and modernizing cabins.

Sen. Baker noted the department has an estimated $1 billion in infrastructure and major maintenance needs and asked about the long term plan to address that need. Sec. Allan said the department will first address public health and safety issues and reported one of his priorities is to increase the amount of money spent on infrastructure. He said he hears a lot about needed maintenance, and noted that larger projects will be funded through the capital budget.

Sen. Baker asked how the department is involved in Act 9 of 2012’s implementation. Sec. Allan responded DCNR is working with DEP and the federal and Pennsylvania Emergency Management Agencies to implement the law. He said the department is posting required signage and moving as quickly as it can.

Sen. Baker asked about DCNR collaboration with the Department of General Services. Sec. Allan explained Act 147 of 2012 allows the two departments to collaborate on efforts to lease state properties. He said they have been in discussions and will likely enter into an agreement for leasing responsibilities in the future. He confirmed it will be a public process.

Lastly, Sen. Baker asked that priority consideration be given to funding Heritage areas and suggested the dedicated funding be restored.

Sen. Gordner thanked the secretary for work on the anthracite outdoor adventure park in Shamokin, remarking it is a perfect example of how to take old coal lands and put them to good use. Sec. Allan offered his assistance going forward. Sen. Gordner then asked if the increased revenue from user fees is due to increased usage or increased fees.

The secretary said it is partly due to an increase in fees. He explained the department examines the fees annually to ensure they are on par with neighboring states. He noted the department is also becoming more efficient and is using private concessionaires when possible because they have a higher return. Sen. Gordner asked if the department checks capacity for trailers and campers. Sec. Allan confirmed the department does, but noted the department is often limited in expansion. He said he is open to any type of opportunity to provide more for our citizens.

Sen. Vogel complimented the department for the lower highlands hiking trail bridge and the lodge at bald eagle state park. He then asked about dirt road and gravel road maintenance. Sec. Allan responded the department maintains 3,500 miles of dirt and gravel roads, with an allocation of $1 million, which “doesn’t quite cover it.” He said he has been advocating for several million dollars from the Oil and Gas Fund. Sen. Vogel asked if it needs to be addressed in governor’s transportation plan. Sec. Allan replied, “I wouldn’t say that.” He said if the funds came from an alternative source, the dollars currently spent on dirt and gravel roads would be diverted back into infrastructure. Sen. Vogel asked if it should be in the transportation budget and the secretary replied, “we’d like an increase in that funding, yes.”

Sen. Argall offered his support for the Keystone Fund and Heritage areas. He asked the secretary if he would object to a restoration of funding. The secretary replied he would not.

Sen. Schwank asked how local grants through community partnerships and determined. Sec. Allen explained the department has a process to rank the applicants. He noted the Keystone funding is from 65 percent of the Realty Transfer Tax, and those dollars are diverted to various enumerated purposes. He stated the department gives equal attention to all applications, but pointed out only $26.5 million was available last year, but applications were for nearly three times more than that.

Sen. Schwank asked about the status of the community landscape initiatives (CLI), remarking on the success of one in her district. Sec. Allan stated that is a very successful program of operating large amounts of land and areas where the department has facilities and the communities participate with the department. He remarked the seven CLIs have become tourist destinations, community revitalization projects, and furthered economic development. He reported the department partners with diverse partners, including state agencies, communities, and nonprofits. He remarked the Department of Transportation is a great partner on trail development and the Department of Community and Economic Development has been a partner in tourism development.

Sen. Ferlo called for community input in the partnerships the department forms and indicated he is specifically concerned about the development of hotels. Sec. Allan assured the senator that the department is very sensitive to the needs of communities and local businesses and stated unequivocally that there is no plan to build a hotel. Sen. Ferlo reiterated his concerns about small businesses’ inability to respond to requests for proposals. He further expressed concern with the lack of environmental sensitivity in the development of the Marcellus Shale. He argued the process does not provide for enough public input. Sec. Allan pointed out the drilling moratorium remains in place and the department is required to grant access to subsurface owners. He reviewed the stipulations that the department imposes on subsurface owners. Sen. Ferlo decried the lack of public input, to which the secretary pointed out these transactions involve proprietary information regarding the mineral rights the companies own.

Sen. Farnese asked how royalty payments are tracked and paid out and whether safeguards are in place. Sec. Allan said the department has a dedicated group of staff dedicated to reviewing royalty payments, tracing them daily and reporting on them weekly. He confirmed a number of safeguards are in place. Sen. Farnese asked if the department knows where all the wells are. Sec. Allan confirmed the minerals division knows where every well is and what money should be in the fund.

Sen. Wozniak asked about shallow wells on DCNR properties. Sec. Allan stated about 100 shallow wells remain active and confirmed they are also monitored. Sen. Wozniak then discussed ATV trails. He called for the trails to connect and go to a destination instead of in circles, and suggested natural gas pipeline pathways may be useable for this. He opined increased ATV trails will bring in revenue. Sec. Allan said the department is always looking at connecting trails, but indicated ATVs pose a particular challenge because they are not licensed. He noted a recently funded study in Armstrong County regarding the use of ATVs and also discussed the additional work associated with maintaining the trails. Sen. Wozniak proposed implementing user feels in the system. Sec. Allan said that would require a statutory change. He pointed out every dollar invested in DCNR yields a return of $12 to the local economy.

Sen. Vulakovich pointed out 700 acres have been leased for Marcellus Shale drilling and the department has won certification awards for 15 years in a row, and suggested this two facts would not be possible for the department wasn’t watching Marcellus Shale activities closely. Sec. Allan said that is a part of the department’s success, explaining forests are managed for sustainability and growth and the department expends extra effort to ensure any activity in the system will not have an adverse impact. He concluded the certification proves the department has been managing the forest in the best possible way, even with the impact of Marcellus Shale development. Sen. Vulakovich agreed. He also asked about the condition of roads in Marcellus Shale regions. Sec. Allan reported that in some cases, the roads are better than they were due to the improvements made by the drillers, but he noted that initially the drillers did not recognize the need to improve the roads.

Sen. Vulakovich also asked about the department’s proposal to lease structures to cell phone companies. Sec. Allan explained the plan will bring in additional revenue and expand cell coverage across the state. He emphasized the cell towers will be placed on existing structures only. Sen. Vulakovich remarked this would be beneficial to residents in the area and also visitors who may encounter problems when they are recreating.

Lastly, the senator suggested the department look to scouting groups to participate in department projects. Sec. Allan confirmed the department does work with various groups on its projects.

Sen. Blake agreed on the need to fund Heritage areas, and asked of information on the past ten years of funding for the program. He also asked about timber sales, specifically inquiring about international versus domestic sales. Sec. Allan said he would look in to the question, but noted the department enters into contracts with local companies and would not really know where they market it. He noted some of the timber does go overseas and also noted increased demand as the housing market rebounds. Sen. Blake asked about debt service on Growing Greener II and if it will crowd out projects. Sec. Allan confirmed the debt service is flat. Sen. Blake advised caution when increasing fees to ensure they are not burdensome. He also asked about public health impacts from Marcellus Shale drilling activities. Sec. Allan pointed out the Marcellus Shale Commission recommendations have not yet been fully implemented and suggested they encompass health concerns. Sen. Blake indicated his support for the cell service plan.

Sen. Fontana asked about the transition since the Heinz history center took over operation of the museum in Point State Park. Sec. Allan responded it is going well. He noted the department has also changed its agreement with the city regarding maintenance. Lastly, he noted the fountain will be turned on in June.

Chairman Corman recommended that the secretary work to ensure that the transportation proposal includes funding for the gravel roads. He also asked about occupancy rates at the inn. Sec. Allan assured the chairman that he is working on the transportation plan and reported the occupancy rate is 54 percent, which he called “not bad.” He said the inn is not making any money, but does provide a different opportunity for people to be in nature.

Speaking hypothetically, Chairman Corman asked about the ability of the department to take over the responsibilities of the Fish and Boat Commission. He explained the commission is facing declining licenses and needs more revenue. Sec. Allan confirmed it is a possibility, noting that the agencies do work collaboratively on various issues.

Sen. Yaw said he is hearing that public lands are increasingly available for public use as drilling create more routes to remote areas. Sec. Allan confirmed he is seeing a similar phenomenon. He said the vast majority of department land is available for hunting and DCNR is working with the Department of Military and Veterans Affairs to increase accessibility. Sen. Yaw asked where the money for infrastructure needs will come from. Sec. Allan clarified he does not expect the needed $1 billion to come in the next two years and reiterated that the department will be prioritizing projects, addressing public health and safety needs first.

Sen. Yudichak commended the secretary for doing a great deal with very little, but has remained on the defense. He asked the secretary for his plans on offense, particularly discussing possibly youth employment programs. Sec. Allan said he’s open any innovative program. Regarding the budget, he said the department has been able to draw additional funds last year and this year, and he will prioritize investment in infrastructure. Sen. Yudichak noted $64 million will be available through Act 13 of 2012 for Growing Greener-type programs and asked if this is an opportunity for programs like he suggested or infrastructure. Sec. Allan said those funds will go to different areas and the department will get, at most, $1 million. He also noted the department will be participating with the Commonwealth Finance Authority on reviewing grants. Sen. Yudichak noted Act 13 included language providing for the securitization of funds for a bond and asked if the department will be exploring that option. Sec. Allan was not familiar with the provisions and said he’ll look into it.

Sen. Baker asked about conversion of the department’s fleet to natural gas. Sec. Allan said the department began looking at the issue a year ago and found the possibility of use of different types of fuels, depending on the facilities the department wants to address. He said the department is looking at joint use facilities and any opportunity to utilize the increased availability on fuel. Sen. Baker wondered how much the department spends on fuel.

Sen. Wozniak remarked on the lifecycle of manmade items, such as dams, and the stabilization of the eco system. He also commended the work of the Boy Scouts. Lastly, Sen. Wozniak asked for information on how much it costs to operate Shawnee State Park and how much money the park generates. He said the public needs to know the costs, remarking not all things are sustainable. Sec. Allan said he would get that information to the committee.

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Senate Appropriations Committee Budget Hearing with the PSP 2/27/13, 2:30 p.m., Hearing Room 1, North Office Building
By Nina Lehr, PLS

The committee held a budget hearing with Colonel Frank Noonan, Commissioner, Pennsylvania State Police and the Governor’s Office of Homeland Security.

Sen. Baker asked what the Pennsylvania State Police plans are in regards to school safety and what resources they would need. Noonan replied since the shooting in 2006 in Lancaster, the state police have been providing school safety evaluations, only at the school district’s request, to identify anything they can improve. He stated they have evaluated 250 schools and 20 colleges but since the recent shooting in Connecticut, there has been a dramatic increase in requests which has created a 240 school backlog. He noted they are adding more people to that division but it takes awhile to train them and they are having training sessions throughout the state. Sen. Baker asked what resources they are finding the schools need through these evaluations. Noonan responded that every school district is different and some of the older school buildings do not have the same security measures built in as the newer ones do. Sen. Baker commented she is fascinated by the “See Something” Send Something” app created by the Office of Homeland Security and asked if they are finding that to be effective. Noonan replied this program is extremely effective and there have been over 600 tips come in on this app and it allows citizens to take a picture with a cell phone and send it anonymously to the police. Sen. Baker asked if the statewide radio system is something the state can and should salvage. Noonan responded the state has built an intricate infrastructure and were recently able to replace the VHF radios with narrow-banded radio. He added this has allowed them to communicate more easily with county and local officials and eased problems with “dead spots.”

Sen. Ferlo remarked the governor’s pension proposal seems to remove new troopers from the pension system and puts them into a defined contribution plan. Noonan replied they have been working with the State Employees Retirement System (SERS) and the Budget Office to get answers but it is hard to define what is going to happen because there is no exact budget bill. He emphasized there is nothing proposed that should change pensions before 2015. Sen. Ferlo asked for information regarding how much of the pension is from forced overtime as opposed to voluntary overtime. Noonan replied he is unaware of any forced overtime and it is always on a voluntary basis. Sen. Ferlo asked how the expungement process for adolescents is progressing. Noonan replied there is a 16,000 expungement backlog between adults and adolescents and closer toward the end of the fiscal year they generally put more funds into the process to get those expungements completed. He noted they had a 13 percent increase in expungements this year and have had a 48 percent increase over the last five years. Sen. Ferlo asked for a follow-up memo on any additional resources they need to get that backlog decreased. He expressed concern over the 1,000 troopers eligible to retire and the drastic reduction in the complement. Noonan responded it is his biggest concern and have had discussions with Governor about this issue. He noted they do have 3 classes of cadets, the first one being 115 cadets, 60 for the second and 115 for the third.

Sen. Vulakovich stated years ago the statewide radio was so bad the state police decided to stay on their own radio system. Noonan replied they have two radio systems now, which is unique to Pennsylvania. He added 95 percent of the police cars have the new radios in place. He stated the equipment has gone through its shelf life and will have to buy new equipment in the next two years. Sen. Vulakovich asked if the state police has started to put money in their budget to address that problem. Noonan replied they are trying to determine what the best system is to use and are hoping to come back with a recommendation in the next two years. Sen. Vulakovich asked what relationship the state police has with the Pennsylvania Emergency Management Agency (PEMA) in regards to the radio system and coordinating between the agencies. Noonan replied PEMA is “on our board” as well as several other agencies that are frequent users of the system. Sen. Vulakovich asked what the cost is per year to cover the municipalities that do not have their own police force. Noonan replied it is impossible for them to give a number but it does increase response times and “stretches the manpower.”

Sen. Farnese stated it is his understanding that under the Uniform Firearms Act, it is not currently a crime for a person under the act to attempt to purchase a firearm even if they know they are ineligible because of a firearm conviction and asked if the state police would support creating such a crime as well as background checks for all gun sales. Noonan replied it is a crime to try and purchase a gun when one knows they are ineligible, a crime known as unsworn falsification. Sen. Farnese asked how the information on outstanding warrant is shared with the police. Noonan replied there is an immediate notification made to the police agency and there is a feature in Pennsylvania Instant Check System (PICS) that allows them to identify individuals that may involved with straw purchases. He added unsworn falsification is not considered a serious charge and suggested making these more serious crimes.

Sen. Rafferty suggested looking toward New York, who has had the same supplier for the radio system, as an example going forward. He asked if there was a guarantee from the governor’s office that if there is an over or underestimate on the budget, there will be still be cadet classes formed. Noonan replied he did not a specific guarantee but the governor has assured him this is a priority. Sen. Rafferty asked how the state police are focusing their resources regarding computer crimes. Noonan replied they have increased the number of computer forensic examiners and are providing training for civilian partners regarding what to look for. Sen. Rafferty asked if they has disseminate their force differently now because of certain events. Noonan replied the Marcellus Shale has changed the way they allocate officers and have a staffing formula they use that if the number of incidents increase they add more officers to that area.

Sen. Greenleaf asked for comments on the issue of human trafficking. Noonan replied the state police is putting out the number to call if someone is a victim of human trafficking and it is more of a prevalent issue than most people think. He stated they are also partnering with the United States Attorney’s Office in Philadelphia to put on a program with experts to increase educational awareness. Sen. Greenleaf emphasized it is important to the state to use best practices in regards to law enforcement training. Noonan replied they provide training through the Municipal Police Officers Education and Training Commission (MPOETC) and have recently been able to provide all of the training online for free. Sen. Greenleaf commented the state is starting to put money toward community police forces and asked for comments on that. Noonan replied there are employees in each community headquarters that go out and meet with community leaders to provide training and make sure everyone is aware of any problems and issues.

Sen. Schwank asked how many communities have dissolved their police departments in the past year. Noonan replied municipalities have completely dissolved and ten communities have gone to part-time. He added part-time police coverage by communities has become a bigger problem because they cannot keep track of the hours being covered, which makes it difficult for the state police to schedule. Sen. Schwank stated there is legislation that would divert the funds garnered from fines from communities that are fully covered by state police to support new cadet training and asked if the state police would support that legislation. Noonan answered “yes, absolutely.” Sen. Schwank stated “we could do a better job of alerting our citizens of where crime is happening around them” and asked for thoughts on crime mapping. Noonan responded the State Police is trying to upgrade their systems to better update the public but it would be more effective to have more people able to do community outreach. Sen. Schwank asked how the State Police handles investigating animal abuse and seizing animals. Noonan replied it depends on the type and number of animals being dealt with and have created a coordinators position based out of the Bureau of Criminal Investigation. He added they have individuals specially trained to handle these kind of situations, however it is a relatively new position.

Sen. Tomlinson asked if the state police has anticipated an increase in pension costs in their budget and if so, what that percentage might be. Noonan responded it will be an increase of around 2.5 percent and the pension costs over the last four years have increased from $44 million to $82 million, which is a serious issue. Sen. Tomlinson asked if they are anticipating an addition in the number of troopers being assigned to the gaming facilities. Noonan replied there will be additional troopers being assigned because of the new casino opening in Fayette County and have accounted for those additional troopers in their budget. He added there are around 141 troopers in the gaming component. Sen. Tomlinson inquired about how the experience has been in the casinos. Noonan replied there has been around 400 incidents occurring per year per casino, ranging from simple assaults to more serious crimes.

Sen. Vance asked why the state police can only recoup ten percent of their crime lab fees. Noonan replied when evidence is picked up there is a letter given to that person for the cost that goes to the district attorney but the money also goes other places. He replied they are getting more money from certain counties but really have no way to track it and will be looking at different ways to collect the money. Sen. Vance commented she still questions troopers in casinos and feels it is the wrong place for them to be and asked who pays their pension costs while they are working at these casinos. Noonan answered the benefits and salaries are part of the casino costs. Sen. Vance asked if those police officers are always in uniform. Noonan replied at times they are but may depend on the situation and by law the state police is tasked with handling the incidents that happen at casinos. Sen. Vance reiterated that since casinos are private businesses they should have hire private people to guard them.

Sen. Vogel asked for the status of uploading mental health records into the National Instant Check System (NICS). Noonan replied they have uploaded 650,000 records and only 35 were denied. He stated they have set up a system that as they receive them on a daily basis they are downloaded to PICS. Sen. Vogel asked how many miles are put on a police car before they are replaced. Noonan replied around 100,000 miles and they maintain the cars well so when they are sold at auction they can recoup a lot of money. He noted since Ford has stopped making the Crown Victor they are now using Ford Interceptors, a car specifically made for police.

Sen. Mensch asked if the state police has taken a look into the attributing factors that would improve the complement. Noonan replied the biggest concern he has is the sporadic hiring and will hire many people one year and none the next which creates a lot of people eligible for retirement at the same time. He stated he would like to get to a system that hires a steady amount and this budget is the first step to that system. Sen. Mensch asked if there was any correlation between being a military veteran and joining the state police and if there were anything being done to incentivize that. Noonan replied veterans get ten points at the start of the exam and they do not require as many college credits. He added veterans make excellent troopers and are trying to figure out a way to upgrade the attention being spent to veterans. Sen. Mensch asked if the state police were in favor of municipal police using radar. Noonan replied he is 100 percent in favor of municipal police officers using radar but it is the decision of the legislature to enact that.

Sen. Blake asked the commissioner to talk about his experiences in regards to DNA testing over the past year. Noonan replied they have seen a dramatic increase in submissions and the current backlog for evidence submitted is 247 days. He stated they have hired ten more examiners for the DNA lab last year and need building upgrades to get more equipment and examiners. Sen. Blake remarked the state has to find a way to deal with incentives for the local municipalities to keep their police force instead of relying on the state police.

Sen. Waugh asked if there is some kind of arrangement for individuals in other states that may be interested in transferring to Pennsylvania. Noonan replied every trooper must go through the state academy but do have some agreements as far as federal officers that want to work for Pennsylvania but noted they do need to take training unique to the laws of Pennsylvania. Sen. Waugh asked if the Fire Marshall complement and funding was adequate. Noonan replied the Fire Marshall is critical service being provided to local communities and emphasized that is “something we cannot go back on.” Sen. Waugh asked if the mounted units are receiving all the equine resources needed. Noonan responded “they are the pride of the state police” and are given every resource they need.

Sen. Wozniak asked what an individual trooper costs the state annually to cover a local municipality. Noonan replied he can give an approximation but does not have the data because there are different circumstances. Sen. Wozniak asked if they could somehow find that information and provide it to the committee at a later date.

Sen. Tomlinson commented even though casinos are a private industry, it is the most regulated private industry that exists and 54 percent of money that goes through a casino is state money. He noted he believes the right decision was made to put state police in the casinos for uniformity and because there is a state interest in that enterprise.

Sen. Vulakovich asked about the smallest cadet class possible to still be effective. Noonan replied the smallest class they can have is 60 cadets, which costs around $100,000. Sen. Vulakovich asked if they have addressed the issue of internet cafes. Noonan replied there are several investigations going on and the law was challenged in federal court but was upheld and noted he believes they are doing very well in those investigations.

Sen. Schwank asked if the state police is worried about the Mexican drug cartels. Noonan replied he works with the Drug Enforcement Administration (DEA) frequently but the Mexican drug cartels are more of the source of drugs and have not established a presence in Pennsylvania.
Sen. Wozniak asked if there has been any discussion on creating a fee to enter into police training in order to help pay for cadet classes. Noonan replied that idea had never occurred to him but believes it would not be well received.

Sen. Hughes asked if the state police supports comprehensive background checks on all firearm sales. Noonan replied he is open to anything but believes mental health is the more prevalent issue. He noted out of the 500 homicides in the last year, only three were involving long guns and he said he is not opposed to it but there needs to be a way to enforce reporting. He reiterated mental health seems to be a recurring theme and that is where the attention should be focused. Sen. Hughes stated the number of minority officers have dropped dramatically in the last few years. Noonan replied the classes that were 50 percent minority in the past are now retiring and are recruiting a proportionate amount but will not get 50 percent in every class. He added the last few classes had a 17 percent minority and they currently have ten full time recruiters with the sole purpose of making sure the agency becomes more diverse and reflective of the diversity in the commonwealth.

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House Appropriations Committee Budget Hearings with DCNR
3/5/13
Report Provided by PLS

The committee held a budget hearing with Richard Allan, Secretary, Department of Conservation and Natural Resources (DCNR).

Chairman Adolph thanked the secretary for working with the committee last year to restore the Key93 grants. He then asked for an update on the funding for conservation districts. Sec. Allan noted DCNR is not involved with the conservation funding structure, but said his understanding is that the funding for the districts is now coming from revenue generated under Act 13 of 2012. He was not aware of any conservation districts contacting DCNR with concerns.

Chairman Adolph asked about the department's $1 billion infrastructure backlog. Sec. Allan explained the department has compiled an inventory of infrastructure needs which totals approximately $1 billion. He said the department is addressing health and safety first and using funds as wisely as it can. He noted dam projects amount to $49 million; road and bridge projects amount to $96 million; building and grounds projects are more than $300 million; recreation projects are $51 million; and acid mine drainage projects amount to $356 million. He explained infrastructure funding was zeroed out a few years ago and the department is still trying to catch up from that. Sec. Allan said funding comes primarily from the Keystone Fund, Environmental Stewardship Fund, and Oil and Gas Fund, and to a lesser extent from the Liquid Fuel Fund and other smaller resources.

Chairman Adolph noted $4.6 million is available for conservation district grants and asked who controls that funding. Sec. Allan suggested it is from Act 13, but was not sure and said he would get that information to the committee. Chairman Adolph indicated he has concerns on the subject and is trying to get in touch with who will make those decisions.

Chairman Markosek asked about the status of oil and gas drilling operations on DCNR lands. Sec. Allan reported the drillers are doing an excellent job on the required maintenance and upkeep on the roads that they are using. He noted they were slow to respond in the beginning, but are doing a good job now. Chairman Markosek expressed concern that DCNR's budget is increasingly reliant on revenue from natural resource extraction and suggested this may be in conflict with the department's conservation mission. Sec. Allan responded the department is able to use those funds for every aspect of its work. He was not aware of any conflicts between drillers and the agency that were not worked out. He explained the department requires drillers to submit a development plan to the department, which encompasses all aspects of drilling and restoration.

Chairman Markosek asked how reduced funding for flood control is affecting the department. Sec. Allan noted the department maintains 126 dams and the three top projects are high hazard dams.

Rep. Everett thanked the secretary for his help in resolving issues with snowmobile trails. He then asked about drilling on state lands and if the executive order on natural gas extraction remains in place. Sec. Allan confirmed the moratorium is in place. Regarding the number of wells, the secretary stated 902 wells have been approved by DCNR, of those 855 are permitted by DEP, of that 556 have been drilled, and of that 301 are producing. He noted approximately 150 wells were producing a year ago. Sec. Allan confirmed the department is seeing a slowdown in drilling on state lands, as is also being seen on private lands, and attributed this to a number of factors, including the decreased price of natural gas, companies moving westward to drill wet gas, and the close of a five year cycle where companies had to drill the hole in order to maintain leases. He anticipates an increase in activity in the next year as the price of gas rises.

Rep. Everett raised an issue that occurred on the Clarence Moore Tract of the Loyalsock State Forest Clarence Moore Tract. Sec. Allan explained any companies that own the mineral rights below state lands are asked to come with a long term development plan of how they anticipate developing the property to access their mineral rights. He said the companies have to discuss every single aspect through to restoration. In regards to Loyalsock, he remarked, "that is a complicated and legal issue." He said the department is pursuing all the possibilities through a legal determination on access rights to those properties.

Rep. Everett addressed concerns about fragmentation and asked the secretary to explain what the department is doing to study fragmentation. Sec. Allan replied that in addition to existing infrastructure, from time to time companies need additional access to get to their tracts or need to put in infrastructure. The department tries to reduce that impact. Regarding fragmentation, he said, companies are asked to follow what the department feels is a better plan if it sees an increase in fragmentation. For example, he said, the department would ask the company to use existing roads or rights of way, or lay pipelines side by side in order to reduce the possibility of fragmentation. Rep. Everett invited members to Lycoming County to tour and see ongoing and restored operations.

Rep. Vitali, minority chairman of the Environmental Resources and Energy Committee, thanked the secretary for his willingness to continue to work with the members on issues regarding Loyalsock. He then asked if the $1 billion in infrastructure needs is an updated number. Sec. Allan confirmed that is an older figure which fluctuates as projects are completed and added. He said the current need is probably $939 to 950 million. He offered to submit a breakdown of need to the committee.

Rep. Vitali next discussed the diversion of funds from the Oil and Gas Lease Fund for DCNR operations as opposed to conservation projects, noting that two years ago the amount of $29 million has now risen to $47 million. He expressed concerned in light of the backlog regarding the diversion of the money to general operations instead of for conservation projects. Sec. Allan reiterated every single aspect of DCNR deals with the mission of recreation, conservation, and flood control. He said if costs are going up, the department may not be able to do its job and noted that even if $1 billion were available for the projects, it would be humanly impossible to complete all the projects in one year. Rep. Vitali stated his belief that salaries should come from the General Fund and the Oil and Gas Fund should be put back into the lands. He remarked on the inherent conflict of interest as the department is funded more and more by drilling operations and thus becomes more dependent on those operations.

Rep. Gingrich commended the commonwealth's 120 gold medal standard state parks. She then asked about user fees and specifically inquired what percentage of that goes into maintenance and personnel. Sec. Allan noted the fees are anticipated to bring in $23 million and said about $2.5 million is derived from contracts with concessionaires who provide a lot of other types of services like boat rental and food sales. He confirmed the department is open to any additional opportunity but said DCNR staff maintain the parks and do it very well. Rep. Gingrich asked if the department is considering increasing user fees. Sec. Allan explained the fees are looked at annually and in comparison with services in other states and from private facilities. He stated the goal is to provide a quality and affordable recreational opportunity. Rep. Gingrich expressed her hope that the fees remain manageable. She then asked if the department has planned any more modernization projects. Sec. Allan said the department is looking to increase electrical service at a lot of facilities due to increase demand. Rep. Gingrich asked about the Nature Inn at Bald Eagle, to which the secretary said that "unique" facility has an average occupancy rate of 54 percent. He said the department is satisfied with the facility, noting that a lot of the structure is from recycled products and wastewater and food waste at the site are recycled. Rep. Gingrich praised the programs available at the site. Lastly, she asked about the affect of the federal sequestration. Sec. Allan noted the total impact is not yet known, but explained DCNR has about 50 pass through grants from the federal government and a seven percent reduction would probably mean about $1 million less to give out from those grants.

Rep. Kula discussed the value of the Heritage area programs and noted funding decreased significantly and over the past decade and the line item was eliminated in 2010, with funding made available through a grant program. She argued this structure has hampered the ability of heritage areas to leverage more dollars. Rep. Kula noted the secretary's testimony indicates $2.3 million is being provided and asked if that is through C2P2 (Community Conservation Partnerships Program) funding or a line item. Sec. Allan confirmed that is in the current round of the C2P2 grant process, which was announced in December 2012. He said he would not object if the legislature chose to reinstate the line item.

Rep. Oberlander asked about the efforts of the department to provide more miles of trails for snowmobiles and ATVs, noting about 200,000 machines are licensed each year. Sec. Allan replied the department is always looking for opportunity to extend and make connections for these type of trails, noting that the department is responsible for snowmobile trail grooming and providing small grants. He remarked the trails for ATVs are more complicated, but the department tries to keep them on the roads they're required to go on. He said he is very concerned about damage in forest areas, but is constantly looking at upgrades. The department currently has four connecting trails for snowmobiles in forest districts, totally about 40 miles, and recently announced the opening of a private facility for ATVs in Northumberland County. Additionally, the department is funding a study for an ATV area in Armstrong County. He confirmed the department will work closely with communities who have the available roadways to add to these trails.

Rep. Oberlander asked about coordination with municipalities. Sec. Allan explained municipalities come to the department regarding possible trails and the department works with them. He confirmed the economic benefits of the industry and said the department always looks for economic benefit when it does any type of investment and is happy to work with anyone who ask for assistance. Rep. Oberlander noted the Department of Transportation (PennDOT) will be responsible for the registration and asked how DCNR will handle this. Sec. Allan explained DCNR will be using PennDOT's facilities to do the registrations, which will mean a big cost savings, but the program will continue to be run by DCNR. Rep. Oberlander asked if the department will work to increase the scope of usage, to which the secretary pointed out there is a restriction of what can be on state roads but said DCNR partners with PennDOT on a lot of trail work.

Rep. Carroll offered his support for funding the Heritage Area Program. He acknowledged the C2P2 program has been dedicated to try to make up the difference of lost funds, but appears to him that program is also oversubscribed. He suggested a dedicated line for the Heritage Area Program will benefit other applicants to C2P2 as a result.

Rep. Boback asked about dams under the department's jurisdiction. Sec. Allan reiterated the department oversees 126 dams, of which about six are high hazard. Regarding the three dams he mentioned earlier, he explained the department has begun design of what needs to be done and once that is completed will move into the construction phase. He indicated it is probably another year until physical work begins and estimated the work will cost $20 million for the three dams. The secretary offered to provide additional information about the dam projects to the committee.

Rep. Brownlee pointed out that the proposed budget consolidates forest pest management into state forest operations and asked if the 21 positions in forest pest management will be affected. Sec. Allan explained forest pest management is being moved, literally, from a substandard site in Middletown to the Rachel Carson Building in Harrisburg. He said this move will save $125,000 each year and the department has also signed a lease with the Department of Agriculture to use a state of the art laboratory. He confirmed the 21 positions will remain intact.

Rep. Brownlee asked about the department's vehicle fleet and if any thought has been given to transitioning to natural gas vehicles. Sec. Allan confirmed the fleet has been under review over the past year and the department is looking at can be pared back or converted. He noted the department has had discussions with PennDOT regarding joint fueling stations, explaining that natural gas vehicles can be costs depending on the type of natural gas is used. He concluded it is an ongoing study.

Lastly, Rep. Brownlee offered her support for funding Heritage areas. Sec. Allan stated the department works very closely with the areas.

Rep. O'Neill offered his praise for Hickory Run State Park. He then asked for an update on the ongoing study of the South Newark Basin Shale area. Sec. Allan replied the department is moving forward with the study and is currently in the process of formulating the process to move forward. He anticipates an announcement to that end will be made shortly. Once the plan is in place the department will contact the affected municipalities and they'll be informed and working with the department. He could not provide a timeframe as to when the study will be completed.

Rep. Bradford asked about the Wild Resources Conservation Program. Sec. Allan said that program was a great idea when it started, noting that funding came through a check off on the tax return form and through specialty license plates, but funding has declined as more specialty plates have come into use. He said the program now has just about enough money to manage it but not the grants administered by the program, so the department decided to provide the funds through Environmental Stewardship funds in a joint effort with the Fish and Boat Commission and the Game Commission. He said the upcoming budget will increase a little bit for the grants and explained the program does all types of research. Sec. Allan said the department receives requests from agencies for grants and a workgroup looks through all the requests. Additionally, he has tasked each deputate to give their input on needs. Rep. Bradford asked what needs have been identified. Sec. Allan replied the needs are primarily in forest area to help with monitoring and overseeing and offered to provide a complete list of grants approved in the last round to the committee.

Rep. Bradford then cited an article by StateImpact Pennsylvania regarding the change in direction in terms of policy and types of research done, which found there had been quite a bit of research in climate change and impact of drilling on the environment but those research initiatives are now being blackballed. Sec. Allan replied that is misinformation, explaining there is very little research on anything related to drilling. He said the department looked at all of its research, and found $1.2 million was being spent on ongoing research contracts. The department decided to put in as much as was necessary through wild resources. Rep. Bradford cited nine studies on global climate change were underway in 2010 and asked how many are currently underway. Sec. Allan said he would get that information to the committee. Rep. Bradford continue the article goes on to say that of 46 applicants, 21 were recommended and the article insinuates that was dropped to none for global climate change and one peripherally on drilling. He suggested those decisions were driven by political implications. Sec. Allan replied they are insinuations, not factual. He said a working group consisting of members from several agencies reviews all the grants. He could not comment on what the article insinuates, but said it is not factual. Rep. Bradford asked if minutes of the meetings of stakeholders are kept and made public. Sec. Allan confirmed minutes are kept and indicated they are available online. Rep. Bradford asked if the targeted priorities list for this year has been released yet. Sec. Allan replied it is not yet out but said the priority is to continuing the mission of recreation and conservation and look at infrastructure to continue to provide quality to citizens. Rep. Bradford asked if the impacts of drilling and global climate change are priorities. Sec. Allan said the department reviews the impact of drilling daily and uses a lot of outside input in everything it does. He said he is aware of global climate change and if someone has research to show an impact the department will look at it. Rep. Bradford said he is troubled by the politicization of science and advised the state should out a head of the issue and talk about what the impacts are.

Rep. Santarsiero asked how many acres could potentially be drilled. Sec. Allan noted 700,000 acres were leased before the moratorium was put in place and estimated about 25 percent of that has been developed, but said he'll get exact data to the committee. He reiterated he is not aware of any discussions to lift the moratorium. Rep. Santarsiero then noted about 80 percent of the mineral rights below state parklands are privately owned and asked if the administration received any overtures about drilling. Sec. Allan replied the administration is not discussing any leasing in state parks and has had no overtures. Rep. Santarsiero asked if the administration is open to such discussions but the secretary did not know.

Lastly, Rep. Santarsiero asked what brought about the study of the Newark Basin. Sec. Allan indicated it began with a report from the US Geologic Survey which stated the potential for natural gas to be accessed there. He could not recall the specific potential mentioned in the study. Rep. Santarsiero commented the issue "kind of came out of the blue for many of us." He acknowledged the secretary's earlier statements that the department is in the process of evaluating the study but asked for more detail on what the department's evaluation entails. Sec. Allan explained the department has to look at a lot of information. He said the effort is being undertaken by the Topographic and Geologic office, which is crafting a plan for how to execute the charge. He reiterated the department is very close to coming out with plan to move forward and said once that is together, the department will reach out to affected municipalities to include them in the process. He expressed hope the study will commence within a year but could not guess when it will end.

Rep. Dean noted the secretary's statements that the department monitors the impacts of drilling every day and asked what he is seeing. Sec. Allan said the department has a team of biologists, ecologists, and engineers doing the monitoring, which looks at every aspect the department is capable of looking at. He offered to provide specific results to the committee, noting that the department is looking at the physical impact. Rep. Dean asked the secretary for his impression in terms of water, air, noise, light, and aesthetics. Sec. Allan noted the forests have been recertified as sustainable and offered to provide that report to the committee. As for what he is seeing, he reported DCNR staff is doing an excellent job and is working closely with the operators. He said he has seen an increase in infrastructure, roads, pipelines, and water impoundments. He concluded there is a lot of activity out there.

Rep. Oberlander commented that as a former county commissioner she is very familiar with Pennsylvania's national diversity index. She asked how that program is managed through the department's budget. Sec. Allan said the department has outside contractors and bureau staff to work on the program. He said the review process is extensive for the species the department oversees, which are primarily plants, and the department works with a number of state agencies. When there is any potential development, he continued, personnel from the agencies have to provide the information when a search is requested. He noted the department has both in-house staff and private contractors through the heritage program that do these reviews. Rep. Oberlander explained that once the initial review completed, the developer has to go through a process through four state agencies before getting a permit. She asked how long this process takes and what it costs. Sec. Allan said DCNR aims to have a turnaround within 30 days. He said the cost varies and offered to provide some examples to the committee. Rep. Oberlander asked that the department also provide information on the impact, additional cost, delays, and lost revenue. Sec. Allan agreed, noting that the department just updated a lot of the work that is done through that division and it is now quicker and less expensive.