Legislature(1999 - 2000)
04/27/1999 09:05 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
CS FOR SENATE BILL NO. 128(RES)
"An Act moving the termination date of the Board of
Storage Tank Assistance to June 30, 1999; relating to
the storage tank assistance fund; relating to
financial assistance for owners and operators of
underground petroleum storage tank systems; relating
to discharges from underground petroleum storage tank
systems; and providing for an effective date."
The last hearing ended with debate over the amount of the
grant programs.
Senator Al Adams reminded members that the committee
planned to look at the net assets of the storage tank
owners. Co-Chair John Torgerson affirmed but in his
opinion, the net assets should not be considered.
Senator Al Adams wanted to know how the "mom and pop"
operations would be protected. It was noted that the
qualifications had nothing to do with the size of the tank,
just the amount of assets of the owner.
AT EASE 10:06AM / 10:09AM
There was discussion as to appropriate drafted language
that was close to the committee's intent.
Senator Dave Donley moved to adopt Amendment #1 with the
intent that the drafters could conform to fit the current
CS. This would expand the allowable expenditures from the
state from the fund to include legal and regulatory
expenses. There was no objection and it was adopted.
Senator Gary Wilken was concerned with the million-dollar
cap. In the fuel business, it didn't take long to accrue
one million dollars in gross assets. Co-Chair John
Torgerson noted the struggle was with how strong the cap
should be. There was debate.
Senator Al Adams referred to Section 10 page 5 lines 14-16.
It stated that the department might not approve for a
grant, a project that was less than twenty-five percent of
the owner's assets. He wanted the department to speak to
this.
STEVEN DAUGHERETY, Assistant Attorney General, Natural
Resources Section, Civil Division, Department of Law came
to the table. He stated that the tank owner with assets
over $1 million who only wanted a grant for $150,000 would
not qualify.
Senator Al Adams wanted to make sure the smaller operators
would be helped. This language would not do that. He felt
that if the project cost under twenty-five percent, the
owner should still qualify. Steve Daugherety stated the
current language.
Senator Dave Donley noted this matter should not be hard to
fix. He suggested a provision to allow a grant for an
amount below the twenty-five percent if the total assets
were under $1 million. Steve Daugherety commented that if
the committee wanted to do that, the provision could limit
to $1 million in assets and remove the four-to-one ratio
language.
Senator Al Adams noted the problem was that the co-chair
wanted to keep the twenty five-percent. Co-Chair John
Torgerson understood and agreed the drafters could address
the issue. He would have an amendment drafted to reflect
this.
[Pause on the record]
JOHN BARNETT, Executive Director, Board of Storage Tank
Facilities, Department of Environmental Conservation
testified. He gave the board's perspective that the net
worth was the true determination of the wealth of the
operators. He agreed with Senator Gary Wilken that the
value of almost all the small operators would surpass the
$1 million cap. He detailed the types of business this
would affect, noting that many roadside stations housed the
owner and including the buildings and equipment was easily
valued at over $1 million.
The $60,000 limit restrictions for the tank upgrades
program would essentially eliminate the grants since no
owner with assets over $250,000 would qualify.
He asked for language to deny requests for loans if the
work had already been completed or if the loan was for
reimbursement of expenses already paid. He gave a scenario
of an owner getting a low-interest loan for a project
already paid-for then opening a bar down the street. If
the loan were defaulted, the state would end up owning a
bar.
Co-Chair John Torgerson interrupted and asked if the
assumption was that every loan application would be
approved. John Barnett said it was not. Co-Chair John
Torgerson questioned why the department would approve such
a loan. John Barnett stated that the department had to
have authority to deny a loan. Unless there was specific
language to address it, the department would be required to
loan the funds for any projects that qualified. Senator
Dave Donley said that common sense dictated that the co-
chair was correct. However, with the administrative
process, appeals hearings and court rulings, that
assumption could not be relied upon.
John Barnett continued that there needed to be language to
authorize the department to put the legislation into
affect.
John Barnett suggested transitional language. The original
recommendation was to delete the upgrade and closure
program. This was because there were only 158 applicants on
the list. Under the current language, all of the applicants
would be eliminated from qualification.
Another concern was with the effective dates. They
recommended inserting the income criteria into the language
with a July 1, 2000 for the loan program.
The board recommended $1 million in net worth.
He concluded by sharing his experiences as a mining
geologist and more recently with the board. He commended
the department for not issuing any fines since the
inception of this program. He noted however, that the
federal Environmental Protection Agency had imposed fines.
He had prepared his suggestions in the form of amendments
if the committee was interested.
Senator Pete Kelly wanted to know if any problems had been
encountered for sites that had been cleaned up. He
referred to a "Letter of no further action." It seemed to
him that had been a problem. John Barnett said it had been
a problem more so in the past than currently. The
hesitation was because of the potential liability of the
state in giving the assurance to future buyers that there
was no further contamination on the site.
JIM HAYDEN, Program Manager, Storage Tank Program,
Department of Environmental Conservation came to the table.
Senator Pete Kelly asked him how many "letters" had been
issued. Jim Hayden responded that of 1700 sites that had
participated in the program and of those, 700 had been
given No Further Action letters. Senator Pete Kelly wanted
to know if some of the remaining might never qualify for
the letter. Jim Hayden said some had minimal release and
others were very contaminated. Senator Pete Kelly wanted
to know how many sites had tested clean but did not have
the letter yet. Jim Hayden knew there were some would have
to research to find the number.
Senator Gary Wilken referred to Closure one, two and three.
Closure one was Upgrades Grants Pending Issue for 1999. Was
this covered under current legislation and would proceed
with no changes if this legislation passed? Jim Hayden
noted the list was for FY00 and would be affected by
whatever legislation was passed. He said that was the first
part of the closure and the grants were issued.
There was clarification on the categories that would be
affected by this legislation. Closure two would be
affected.
Senator Lyda Green noted the other committee members did
not have the closure information.
Senator Gary Wilken wanted comment on the million-dollar
income limit. Jim Hayden said originally the department
opposed the legislation on a general fairness issue. They
did have a waiting list and no applications had been
accepted since 1986. The department had no position on the
financial cap since they had no financial information.
Co-Chair John Torgerson ordered the bill held and said he
would have amendments drafted to address the concerns
discussed.
AT EASE 10:36AM / 10:37AM
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