Legislature(2003 - 2004)
04/29/2003 09:01 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 29, 2003
9:01 AM
TAPES
SFC-03 # 67, Side A
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:01 AM.
PRESENT
Senator Lyda Green, Co-Chair
Senator Gary Wilken, Co-Chair
Senator Ben Stevens
Senator Lyman Hoffman
Senator Con Bunde
Senator Donny Olson
Senator Robin Taylor
Also Attending: REPRESENTATIVE JIM HOLM; SENATOR GRETCHEN GUESS;
PAT DAVIDSON, Director, Division of Legislative Audit; LAURA ACHEE,
staff to the Legislative Budget and Audit Committee; JOHN BARNETT,
Executive Director, Board of Storage Tank Assistance, and private
sector contractor;
Attending via Teleconference: From an offnet location: DWAYNE
BANNOCK, Director, Division of Motor Vehicles, Department of
Administration; From Mat-Su: GARY WEBER, Owner, Wasilla Chevron,
and President, Underground Tank Owners Association of the State of
Alaska
SUMMARY INFORMATION
HB 59-CLEANUP OF ILLEGAL DRUG SITES
The Committee heard from the sponsor and the bill moved from
Committee.
SB 146-COMMEMORATIVE VETERANS LICENSE PLATE
The Committee heard from the sponsor and the Department of
Administration. The bill was held in Committee.
HB 187-EXTEND BOARD OF STORAGE TANK ASSISTANCE
The Committee heard from the Division of Legislative Audit, the
Legislative Budget and Audit Committee, the Board of Storage Tank
Assistance and the Underground Tank Owners Association of the State
of Alaska. The bill was reported from Committee.
SB 86-INTEREST ON DELINQUENT TAXES
This bill was scheduled but not heard.
CS FOR HOUSE BILL NO. 59(FIN) am
"An Act relating to the evaluation and cleanup of sites where
certain controlled substances may have been manufactured or
stored; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken noted Amendment #1 was adopted at the previous
hearing.
REPRESENTATIVE JIM HOLM, sponsor, testified to the multiple
hearings this bill has received, as well as hearings on a similar
bill during the previous legislative session. He commented that
this legislation has "maintained its integrity" during the process.
He furthered that it is a "good step help protect the children of
Alaska from the potential damage of methamphetamine labs."
Co-Chair Green offered a motion to report HB 59, 23-LS0341\U, as
amended, from Committee.
Without objection, SCS CS HB 59 (FIN) MOVED from Committee with
individual recommendations and fiscal notes #1 from the Department
of Public Safety and #3 from the Department of Environmental
Conservation.
SENATE BILL NO. 146
"An Act relating to a commemorative veterans' license plate;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained this bill "allows Alaskans to purchase a
special request license plate commemorating veterans."
SENATOR GRETCHEN GUESS, Sponsor, testified that many Alaskans
support veterans and some have requested a way to show that support
as well as contribute to veterans' services. She stated this
legislation would implement a special license plate program for
veterans similar to the Children's Trust license plate program. She
noted an exception would be a $35 biannual fee to allow vehicle
owners to continue to donate for veterans' services.
Senator Guess estimated the program would generate between $20,000
and $60,000, and reiterated this would allow motorists to
demonstrate their support of veterans.
Senator Guess informed that many other states have similar license
plates to commemorate veterans.
Senator Bunde noted discrepancies in the fiscal note between the
$2,900 operating expenditures and $13,500 change in revenues.
Senator Guess explained that the Division of Motor Vehicles based
these estimates on the Children's Trust license plate program and
predicted the revenue generated from the veterans' plates would
exceed the manufacturing costs.
Senator Bunde clarified the program would generate revenue.
Senator Guess affirmed revenue would be generated and that the
Legislature would have the option of appropriating those funds for
veterans' services. She clarified that the Legislature is
restricted from dedicating funds.
Senator Bunde asked if the veterans' plates would generate
approximately $10,000 profit.
Senator Guess affirmed and qualified that the Children's Trust
license plate program has generated more income.
Senator Bunde noted the current veterans' license plates contain
military affiliated lettering and asked how the lettering on the
proposed plates would relate.
Senator Guess replied that the current plates are only available to
military veterans, whereby the proposed plates would be available
to the general public as well.
Senator Bunde established that this legislation implies no
dedication of revenue funds for veterans programs.
Co-Chair Green commented that the revenue performance of other
specialized license plates has been less than predicted. She
surmised this is because of the numerous special plates programs.
Co-Chair Green asked about vehicle registration fee exemptions
based on age.
DWAYNE BANNOCK, Director, Division of Motor Vehicles, Department of
Administration, testified via teleconference from an offnet
location. He noted senior citizens qualify for free vehicle
registration but would not be exempted from the $100 fee of these
special license plates.
Co-Chair Wilken ordered the bill HELD in Committee.
HOUSE BILL NO. 187
"An Act extending the termination date of the Board of Storage
Tank Assistance; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken stated this legislation "extends the Board of
Storage Tank Assistance until June 30, 2007, as recommended by
LB&A."
AT EASE 9:11 AM / 9:12 AM
PAT DAVIDSON, Director, Division of Legislative Audit, stated that
the Division performed an audit of the Board of Storage Tank
Assistance resulting in a recommendation for an extension of the
Board for four years.
LAURA ACHEE, staff to the Legislative Budget and Audit Committee,
deferred to storage tank program staff.
JOHN BARNETT, Executive Director, Board of Storage Tank Assistance,
and private sector contractor, spoke about the seven-member Board
formed in 1990 with members appointed by the governor and who serve
without compensation.
Mr. Barnett listed the three principle roles of the Board, all
related to underground storage tanks, the first of which is to
provide a certain level of regulatory oversight of the Department
of Environmental Conservation to ensure that regulations imposed by
the Department are practical and are not financially onerous or
more stringent than the federal requirements. The second role, he
stated is to resolve disputes, both formally and informally, in
mediating between the Department and regulated tank owners and
operators. He exampled disputes including financial assistance
disagreements related to eligibility for loans and grants;
expedition of "no further action" letters on contaminated sites;
disagreements related to cleanup plans; and ensuring communication
between tank owners and the Department. He noted that prior to the
Board's inception, disputes were handled through attorneys and the
Department of Law, with legal expenditures significantly higher
than actual cleanup expenditures. He concluded with the third role
of the Board to allocate funds appropriated by the Department to
projects based first on public health, then according to other
priorities as established by the Board.
Senator Olson clarified this legislation only pertains to
underground storage tanks.
Mr. Barnett informed that the financial assistance program
addresses those tanks regulated under federal law established in
1988 and that the State underground storage tank program began in
1990. He stated that the "strict and onerous" requirements
instituted by the federal Environmental Protection Agency to
upgrade tanks and clean sites resulted in costs "extremely
prohibitive" in Alaska. Therefore, he stated only underground
storage tanks are included in the program.
Senator Olson asked about cleanup of a pipeline or above ground
storage tank and whether the Board could become involved in
resolving disputes relating to these facilities.
Mr. Barnett replied the Board has no authority, although it has
served as a mediator in past instances involving above ground
storage tanks.
Senator Taylor referenced a section on Page 8 of the audit titled,
"Demand for cleanup loan program is still unknown" and asked the
basis for the prediction that participation would increase in the
loan program after June 30, 2004.
Mr. Barnett explained the cleanup program began as a 100 percent
grant program and was amended in 1999 to award grants on a
financial need basis with a $250,000 maximum amount. He added that
in 2002, a termination date for the grant program was enacted
through SB 153 and that in 13 months from this date no further
grants would be issued. He noted that cleanup is underway at
approximately 50 active sites and that the owners and operators of
those sites would need to secure additional funding through the
loan program, which would not terminate. He explained that because
grants are currently available, there is no need for these owners
and operators to utilize the loan program and subsequently accrue
interest debt on loans. He predicted an increase in loan
applications would occur the upcoming winter, as opportunity to
utilize grant funds would conclude with the end of the summer 2003
construction season.
Senator Taylor anticipated the revolving loan program activity
would increase with the termination of the grant program.
Mr. Barnett commented that "it took several years to… debug the
grant program" to determine acceptable eligible costs. He stated
that administering the loan program would be relatively new for the
Board and shared with the Committee the argument that because these
funds are the tank owners, additional allowances for eligible costs
would be requested. Therefore, he foresaw an increase of disputes
over eligible expenditures and subsequent increased workload for
the Board.
Senator Taylor asked if all eligible parties are participating in
the grant program.
Mr. Barnett agreed and noted the larger number of loan applicants
than grant recipients because the financial needs criteria is less
stringent for the loan program than for the grant program.
Senator Taylor commented he was concerned about the grant program
and spoke to efforts to "kill" or modify the program "to the extent
that it was rational". He was concerned that as the termination
date nears, interested parties would attempt to continue the
program.
Co-Chair Wilken expressed it "heartening" to see a solution to an
issue that had been predicted as unworkable. He accredited this
significantly to the former Senator Torgerson's efforts on this
matter.
GARY WEBER, Owner, Wasilla Chevron, and President, Underground Tank
Owners Association of the State of Alaska, testified via
teleconference from Mat-Su to exalt success of the Board and the
program, characterizing it as the best program in the nation. He
asserted this was the result of a "total partnership" between the
Department, the Board, and the tank owners.
Mr. Weber told of the expectation that the cleanup program would be
too expensive to operate, but noted that a tank fee procedure was
implemented to pay the operating costs of the Board.
Mr. Weber expressed that the tank owners "desperately want to keep
this Board" explaining the need for regulatory oversight and the
ability to change regulations as necessary to "make them workable
in both directions". He told of the benefits of the Board as a
mediation function, which saves legal expenses. He urged the
Committee to pass this bill.
Senator Taylor offered a motion to report HB 187 from Committee.
There was no objection and HB 187 MOVED from Committee with
individual recommendations and fiscal note #1 from the Department
of Community and Economic Development.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 09:29 AM
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