Legislature(2003 - 2004)

03/28/2003 01:05 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 187-EXTEND BOARD OF STORAGE TANK ASSISTANCE                                                                                
CHAIR FATE  announced that  the first order  of business  would be                                                              
HOUSE BILL  NO. 187,  "An Act  extending the  termination date  of                                                              
the  Board  of  Storage Tank  Assistance;  and  providing  for  an                                                              
effective date."                                                                                                                
Number 0201                                                                                                                     
LAURA ACHEE, Staff  to Representative Ralph Samuels,  Alaska State                                                              
Legislature,  presented  HB  187  on behalf  of  the  House  Rules                                                              
Standing Committee,  sponsor by request of the  Joint Committee on                                                              
Legislative Budget  and Audit, which is chaired  by Representative                                                              
Samuels.   She said  it is  a very  simple bill  that extends  the                                                              
[Board of Storage Tank Assistance (BSTA)].                                                                                      
Number 0284                                                                                                                     
JOHN   BARNETT,  Executive   Director,  Board   of  Storage   Tank                                                              
Assistance, testified  that he is  a contracted employee  from the                                                              
private  sector and  has  been fulfilling  the  role of  executive                                                              
director  since the  program's inception  in 1990.   He  explained                                                              
that [BSTA]  is a volunteer board  that serves at the  pleasure of                                                              
the  governor for  the  benefit of  the  industry.   The  industry                                                              
[consists  of] Alaska  underground  tank owners  and operators  of                                                              
service  stations,  small  "mom  and  pop"  [operations],  grocery                                                              
stores,  lodges,  small  aircraft,   and  so  forth,  as  well  as                                                              
contractors  and   various  people  who  have   small  underground                                                              
storage tanks.                                                                                                                  
MR. BARNETT  explained that the board  has a number of  roles, one                                                              
of which  is to mediate disputes  between underground  tank owners                                                              
and  operators and  the Department  of Environmental  Conservation                                                              
(DEC).  He  said BSTA has  certain authorities over DEC  to enable                                                              
it to resolve  those disputes expeditiously.   For over  a decade,                                                              
he  said, BSTA  has resolved  quite a  few disputes.   An  appeals                                                              
board,  BSTA acts  as an  oversight committee  on any  regulations                                                              
proposed  by  DEC  to  ensure  that  they  are  not  an  excessive                                                              
financial  burden  to  the  industry and  yet  still  protect  the                                                              
public health and the environment.                                                                                              
Number 0430                                                                                                                     
MR.  BARNETT  said  BSTA  also  ensures   that  those  regulations                                                              
proposed by  DEC are not  more stringent  than federal law.   When                                                              
loans  and  grants are  processed  by  DEC through  the  financial                                                              
assistance program,  he explained, another  of BSTA's roles  is to                                                              
ensure that  eligible costs are  allowed and to  basically mediate                                                              
disputes when  a cost is denied by  the department.  He  said BSTA                                                              
sets   limits   of  loans   and   grants   each  year   based   on                                                              
appropriations from  the legislature.  The board's  strongest role                                                              
and relationship  is to  mediate disputes  with cleanup  plans and                                                              
with regulations  and to [provide]  a secondary role  in resolving                                                              
disputes  related  to  actual  financial   assistance  grants  and                                                              
loans,  he  explained.    For example,  there  have  been  several                                                              
regulations  that  were proposed  that  were  determined  to be  a                                                              
financial  burden  to the  industry  and  would have  put  several                                                              
[storage tank owners]  out of business; the properties  would have                                                              
been  taken over  by  the state.    However, BSTA  intervened  and                                                              
sought some middle ground on the regulation, he said.                                                                           
Number 0546                                                                                                                     
MR. BARNETT talked  about regulations proposed before  BSTA was in                                                              
place that were  onerous to the industry and [that  resulted in] a                                                              
number  of stations  closing.   He  said in  Anchorage there  were                                                              
piles of  dirt all over the  city, and in Fairbanks,  according to                                                              
the  headlines  of  the  [newspaper],  a  lot  of  issues  weren't                                                              
resolved before  it went to  the legal level  - the  Department of                                                              
Law.  Mr. Barnett  said the Department of Law [exhausted]  most of                                                              
the funds and the "money didn't go into the ground."                                                                            
CHAIR FATE thanked  Representative Carl Morgan, a  new member, for                                                              
joining the committee.                                                                                                          
Number 0682                                                                                                                     
REPRESENTATIVE  GATTO speculated  that many  people have  probably                                                              
purchased 500-gallon  storage tanks  for gasoline and  buried them                                                              
in their  yards.  He  asked whether those  people and  the storage                                                              
tank  locations could  be  identified; he  noted  his belief  that                                                              
there hadn't been  a requirement in place to  report [identifying]                                                              
MR. BARNETT  responded that there  was a fairly  expensive public-                                                              
information campaign  in 1990-1991 directing people  with gasoline                                                              
tanks to register  those tanks; this was done by  both DEC and EPA                                                              
[Environmental Protection  Agency].  There were some  fairly stiff                                                              
penalties for  failure to comply,  he said, and [BSTA]  feels that                                                              
most of those  tanks have been  identified and "closed out."   The                                                              
cost is  currently quite prohibitive  to keep a tank  in operation                                                              
up to current  EPA and state  standards, he suggested.   The state                                                              
program was put  into place shortly after the  federal program and                                                              
also  with the  assistance  program to  ensure  that these  people                                                              
could  stay  in  business  and still  absorb  some  of  the  costs                                                              
related  to those upgrades,  he explained.   Mr.  Barnett said  he                                                              
thought that most  [underground storage tank (UST)  locations] are                                                              
known.   This program  does not  cover heating  oil tanks  or home                                                              
heating oil tanks; it primarily covers gasoline tanks.                                                                          
Number 0783                                                                                                                     
REPRESENTATIVE   MASEK  noted  that   she  had  previously   asked                                                              
Commissioner Ernesta  Ballard of  DEC for information  relating to                                                              
[the cleanup  and maintenance]  of storage  tanks.  She  indicated                                                              
Commissioner  Ballard  said [BSTA]  was  "pretty  much on  target"                                                              
with getting  most its work done  in relation to [UST  cleanup and                                                              
maintenance].   She asked  Mr. Barnett about  the progress  of the                                                              
Number 0823                                                                                                                     
MR.  BARNETT  said  compliance  with  EPA  standards  is  probably                                                              
better than  60 percent statewide  - perhaps 60-65 percent  as far                                                              
as  the   total  number   of  tanks,   which  doesn't   take  into                                                              
consideration  some  of the  worst-case  scenarios.   Mr.  Barnett                                                              
said there are  sites that have been undertaking  ongoing cleanups                                                              
for  over  a  decade  that  are  [extremely]  contaminated.    For                                                              
example,  he  listed  University  Car Care  in  Fairbanks,  Cook's                                                              
Tesoro in  Sterling, a number of  [sites] on the  Kenai Peninsula,                                                              
and several  "here" that  have been operating  for five,  six, and                                                              
seven years.  These are the sites that BSTA is concerned with.                                                                  
MR.  BARNETT  affirmed  that the  grant  program  terminates  next                                                              
year;  it has  about  14  months  left to  go.   However,  a  loan                                                              
program is  currently in  place and will  be available  after [the                                                              
grant  program  expires],  and  it  does  not  have  a  sunset  or                                                              
termination  date.   He  said  facilities  such  as Gold  Hill  in                                                              
Fairbanks, Lucky  Sourdough, Moose Creek General  Store, and [A.M.                                                              
Samuels] will continue  to participate in the program  through the                                                              
loan process,  as long as  it takes to  get the sites  cleaned up.                                                              
He  said  until  they  get no  further  action  letters  from  the                                                              
department, it  is felt that [those  sites] will continue  to need                                                              
BSTA to mediate any possible disputes.                                                                                          
Number 0947                                                                                                                     
REPRESENTATIVE   MASEK  noted  that   the  targeted   [sites]  are                                                              
statewide; she  mentioned that there  are a couple of  areas being                                                              
worked on in  the Matanuska-Susitna area.  She  offered her belief                                                              
that  Trapper  Creek  and  Wasilla  were  both  [targeted  cleanup                                                              
sites];  she  said  she  thought   the  program  has  been  really                                                              
instrumental  in getting the  job done.   She said it's  important                                                              
to extend [BSTA's  termination date] to ensure  that ongoing cases                                                              
will be worked  on.  Representative Masek noted  that this [issue]                                                              
was not  new to her,  and said  she was really  happy to  see that                                                              
[BSTA] is surging ahead and is able to get the job done.                                                                        
Number 1049                                                                                                                     
GARY  WEBER,   President,  Alaska  Underground  Tank   Owners  and                                                              
Operators,  said it seems  [this issue  has been brought  forward]                                                              
every  year  for  the  last  five  years,  and  that  the  [Alaska                                                              
Underground  Tank   Owners  and  Operators]  has   to  defend  the                                                              
existence  of the board,  which the  tank owners  want very  much.                                                              
He  offered his  belief  that the  current  consensus and  [DEC's]                                                              
view of the  board is that the  tank program is coming  to an end.                                                              
However, Mr.  Weber said only  the grant  program is coming  to an                                                              
end;  the tank  program will  continue as  long EPA  and DEC  have                                                              
regulations,  and an oversight  requirement  is needed to  protect                                                              
both parties.   He talked about  the other consensus  that cutting                                                              
the board  would be cost  saving.  Mr.  Weber said when  the board                                                              
was started,  tank owners volunteered  to pay $1,000 per  year for                                                              
their USTs as a  registration fee.  After the  USTs were upgraded,                                                              
an ongoing  $50 annual  registration  fee would  be required.   He                                                              
indicated  Mr. Barnett  would  be the  appropriate  person to  ask                                                              
about the number of USTs in the state.                                                                                          
Number 1138                                                                                                                     
MR. WEBER  said the registration  fee is supposed to  totally fund                                                              
the  board,  and he  suggested  that  the  consensus is  that  the                                                              
department  is capable  of dealing  with the  tank owners  without                                                              
the board.   He said  he appreciated [DEC's]  feeling that  it can                                                              
do that,  and that as  hard as [the issue]  has been for  the last                                                              
13 years,  the relationship  with [DEC] has  been delightful.   "I                                                              
can tell  you that prior  to 1970, it  was pure hell  working with                                                              
them, and there  isn't one of us  tank owners that want  to return                                                              
to  the pre-1990  era," he  remarked.   Mr.  Weber suggested  that                                                              
when regulations  are written that "get into  people's pocketbooks                                                              
and put  them out of  business," there  are going to  be a  lot of                                                              
hard feelings,  headline  news stories, and  total destruction  of                                                              
what the last 13  years has built for [UST owners].   He suggested                                                              
that [Alaska] has one of the best programs in the nation.                                                                       
MR.  WEBER concluded  by saying  that as  long as  there are  tank                                                              
owners,  tanks,  and  EPA  regulations,  and as  long  as  DEC  is                                                              
writing  new regulations,  the board  is needed  to oversee  those                                                              
regulations.   Noting that  the board  consists of seven  members,                                                              
he remarked,  "As good as  the people are  at DEC, they've  missed                                                              
things;  they've passed  things up."   He said  the seven  experts                                                              
that review  [information]  can help  DEC or the  tank owner,  and                                                              
can help  both [sides] to come  up with good regulations  that can                                                              
be followed.   Mr. Weber stated that the [Alaska  Underground Tank                                                              
Owners and Operators]  voted for keeping [BSTA] around  as long as                                                              
[UST owners  and operators]  exist.  He  urged members to  move HB                                                              
187 from committee.                                                                                                             
Number 1272                                                                                                                     
REPRESENTATIVE  MASEK  noted  that  USTs  are  for  commercial-use                                                              
purposes such  as gas stations.   She asked Mr. Barnett  to inform                                                              
the committee of the target [of BSTA].                                                                                          
MR. BARNETT  said in the "universe  of tanks," which  is regulated                                                              
by  this  program,  about  40 percent  are  probably  service  and                                                              
retail stations.   The balance of  [UST owners and  operators] are                                                              
a   mixture  of   everything   from   rental  car   companies   to                                                              
construction  contractors, as well  as a  number of small  grocery                                                              
[stores] and other  small businesses such as filling  stations and                                                              
roadhouses.   "It's  actually only  about  30 or  40 percent,"  he                                                              
remarked.    He  said  airports  and  aircraft-related  tanks  are                                                              
associated  with  this program  as  well;  quite a  few  different                                                              
types  of tanks  are  involved, but  they  are primarily  gasoline                                                              
Number 1360                                                                                                                     
REPRESENTATIVE  GUTTENBERG  noted that  usually  when  a board  is                                                              
"sunsetting," a  legislative audit [is  conducted].  He  asked for                                                              
comments or criticisms  on the audit report; he noted  that he had                                                              
not seen it.                                                                                                                    
MR.  BARNETT, in  response,  said  the audit  was  as thorough  as                                                              
usual, and he noted  that he done four [audits to  date].  He said                                                              
[the audit]  usually takes a considerable  amount of time,  and he                                                              
told  the committee  that he  felt  [the auditors]  took an  equal                                                              
amount  of time  with the  department  and the  industry before  a                                                              
consensus   [was   reached].     He   indicated   the  audit   was                                                              
REPRESENTATIVE  GUTTENBERG asked  whether  any improvements  could                                                              
be made.                                                                                                                        
MR. BARNETT said no.                                                                                                            
Number 1435                                                                                                                     
REPRESENTATIVE  GATTO asked  if [BSTA] had  any jurisdiction  over                                                              
aboveground storage tanks.                                                                                                      
MR.  BARNETT,  in   response,  said  [BSTA]  does   not  have  any                                                              
jurisdiction related  to aboveground  tanks, but had  assisted, in                                                              
the past,  when asked; had assisted  in putting on  workshops; and                                                              
had  helped to  put together  documents  over the  past decade  to                                                              
assist.  He noted  BSTA had also lent its expertise  at times, but                                                              
had no authority related to that.                                                                                               
CHAIR FATE, upon  determining that no one else  wished to testify,                                                              
closed public testimony.                                                                                                        
REPRESENTATIVE  GUTTENBERG commented  that  he was  in support  of                                                              
[HB 187]; he noted  he would have liked the committee  to have had                                                              
a copy of the audit for review.                                                                                                 
CHAIR  FATE said  it's always  useful  if there's  a problem  with                                                              
extending  the authority  [of a  board]  or if  that authority  is                                                              
extended,  whether  or not  there  are certain  improvements  that                                                              
have to  improved within  that authority  as outlined.   He  noted                                                              
that he had not  read the audit, but he indicated  he could attest                                                              
to how  that mechanism  works because of  his prior experience  on                                                              
the Joint Committee  on Legislative Budget and Audit.   Chair Fate                                                              
said [HB 187] is  a very simple piece of legislation  and that the                                                              
board  has been  very  useful, as  testimony  had  indicated.   He                                                              
suggested  if  improvements   to  the  board  were   needed,  they                                                              
probably would be pretty minor.                                                                                                 
Number 1559                                                                                                                     
PAT  DAVIDSON,   Legislative  Auditor,  Division   of  Legislative                                                              
Audit, Alaska  State Legislature,  informed the committee  that no                                                              
findings or recommendations  [were made] during the  course of the                                                              
audit  relating   to  making  any  improvements   to  the  board's                                                              
operations.  A  four-year extension was recommended  and was based                                                              
on the role  that the board plays  in the transition from  a grant                                                              
program  into   a  loan  program.     Mentioning   development  of                                                              
regulations,  she said  that  while there  has  been a  decreasing                                                              
amount  of  activity  for  the board,  this  major  shift  in  the                                                              
financing  of cleanup  activities  will result  in new  questions.                                                              
The board  has quite extensive  institutional knowledge  about the                                                              
program,  she said,  and it  was found  that it  is very  helpful.                                                              
Therefore,  based  on  those factors,  a  four-year  extension  is                                                              
Number 1629                                                                                                                     
REPRESENTATIVE  MASEK moved  to  report HB  187  out of  committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes;  she  asked   for  unanimous  consent.     There  being  no                                                              
objection, HB 187  was reported from the House  Resources Standing                                                              

Document Name Date/Time Subjects