Legislature(2001 - 2002)
01/31/2002 09:45 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 153(RES)
"An Act replacing the storage tank assistance fund with the
underground storage tank revolving loan fund and relating to
that revolving loan fund; repealing the tank cleanup program
and the tank upgrading and closure program; and providing for
an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Leman stated this bill proposes to "phase out" the current
clean up grant program by the year 2004 because "the expectation is
these grants would be accomplished by that time." He continued the
proposed committee substitute would change the underground tank
assistance fund into a "revolving loan fund supported by loan
repayments and income earned on the money in the fund."
Senator Leman moved for adoption of CS SB 153, 22-LS0696\L, Cook as
a working draft.
There being no objections, the working draft was ADOPTED.
Co-Chair Kelly commented that Senator Leman has supplied an
"excellent sectional analysis." [Copy on file]
JOHN BARNETT, Executive Director, Board of Storage Tanks
Assistance, informed the Committee he supports this committee
substitute and feels the proposed changes are warranted. He stated
the Board of Storage Tank Assistance "urges passage" of this bill
as it has language that specifies "who is eligible for a loan,
based on the federal requirement of self-insurance." He stated if
"someone is self-insurable, they are not eligible to get a loan
from the state."
Mr. Barnett stated the self-insurable language of this bill would
disqualify fourteen of the companies that have expressed interest
in getting a loan. He continued of these fourteen applicants,
"thirteen are Chevron corporate owned facilities." He voiced the
Board supported this bill because "it would reduce the loan
application list." He stated that the Board and the Department
concur the grants could be "wrapped up by 2004."
Senator Olson asked how many "applications are being considered" at
present and how recently they were submitted.
Mr. Barnett stated currently there are four completed applications
for the loan program, and approximately "fifty-seven have expressed
interest" in applying for a loan. He detailed the process of
applying for the loan, and speculated this would result in "forty
to forty-five applicants and the loans could reach as high as a
quarter of a million dollars depending upon the size of the cleanup
and the level of contamination at the site."
Senator Hoffman asked how much funding would be made available
annually under the revolving loan program.
Mr. Barnett responded that the "amount of funds available would be
dictated by the number of applications and the amount of money
currently in the fund." He stated "there are sufficient funds
available in the storage tank assistance fund that would roll-over
into this revolving loan fund to handle all of our initial expected
needs" unless some site "turns out to be very, very contaminated."
He noted that a lump sum is not given out for cleanup in this loan
process, but would be phased over time, in order to prevent
overpayment. He informed "sometimes the estimates are pretty high,
and the cleanups will come in a lot lower due to basically
technology improvements and such like that."
Senator Hoffman commented in a revolving loan system, a specified
amount of money would be loaned out and the returns on those loans
would give back an "estimated amount of funds to be available to be
reissued." He asked, once the revolving loan fund is established,
how much money would be available on an annual basis.
LARRY DIETRICK, Director, Division of Spill Prevention & Response,
Department of Environmental Conservation, replied an "initial
capitalization" of $5 million was passed in SB 128 in FY 00 and the
Department is working off that balance" currently. He informed,
based the prospect of fifty-seven loan applicants with only four
completed loans in the door, the projection of the "the amount
available for both the loans and the grants" is anticipated to be
$3.4 million at the end of FY 02. He continued if the clean-up
grants are completed in FY 03 as projected in the committee
substitute, and these grant costs are deducted from the $3.4
million balance, approximately $2.1 million would be available for
the revolving loan fund at the end of FY 03.
Mr. Dietrick stated the Department does not have a rate of return
"experience yet with just four applications in the door," but is
working with the Division of Insurance to determine the rate of
return as well as what the terms and length of the loans might be.
He stressed the Department feels it is "adequately capitalized to
get started" and then "see what that trend will be."
Mr. Barnett stated one problem that might be experienced would be
that some of the applications coming in under the current grant
program may reach their cap, and if a site "is quite contaminated,"
the cost of cleanup might exceed the grant. In this scenario, he
stated, the applicant might have to come for a revolving loan that
they would be responsible for paying back. As the "sunset of the
grant program" gets closer," he stated, the Department would be
able to see "the level of interest in the loan program, as right
now it is kind of hard to gauge."
Co-Chair Kelly ordered the bill HELD in Committee.
| Document Name | Date/Time | Subjects |
|---|