Legislature(2003 - 2004)
03/28/2003 01:05 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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] information. 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 program. 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 tanks. 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 satisfactory. 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 recommended. 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 Committee.