Legislature(2001 - 2002)
03/15/2002 01:09 PM House RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 115-EXTEND BOARD OF STORAGE TANK ASSISTANCE [Contains discussion of SB 153] Number 2076 CO-CHAIR MASEK announced that the next order of business would be SENATE BILL NO. 115, "An Act extending the termination date of the Board of Storage Tank Assistance." Number 2100 HEATHER BRAKES, Staff to Senator Gene Therriault, Alaska State Legislature, presented SB 115 on behalf of the Senate Rules Committee, which had sponsored the bill at the request of the Joint Committee on Legislative Budget and Audit. She explained that [SB 115] would extend the [Board of Storage Tank Assistance (BSTA)] for an additional two years, from June 30, 2001, to June 30, 2003. The board is currently in its wind-down year and will cease to exist on June 30, 2002, if the legislature chooses not to extend it this year. MS. BRAKES referred to a legislative audit released on December 6, 2000, by the [Joint Committee on Legislative Budget and Audit], performed under legislative oversight statutes. She directed attention to page 11 of the audit report and noted that the legislative auditor lays out the following audit report conclusions: The board should be reestablished, and it plays an integral role in promoting compliance throughout the state with federal regulations related to specifications for underground storage tanks (UST). Compliance is important in promoting public health in that it protects underground drinking water supplies from pollution and provides funding necessary to remediate pollution brought on by leaking USTs owned and operated by private-sector interests. As an independent board, BSTA has been instrumental in mediating disputes between the Department of Environmental Conservation (DEC) and tank owners and operators. The board has enhanced cooperation, which promotes compliance with governmental regulations related to the underground tanks. Ms. Brakes said there were no findings or recommendations made on the audit. However, the auditor did recommend that BSTA be extended to June 2003. Number 2239 JOHN BARNETT, Executive Director, Board of Storage Tank Assistance, told the committee he was a private-sector contractor contracted to BSTA. Number 2248 REPRESENTATIVE GREEN asked Mr. Barnett whether this is "proper form" when it is past the termination date to extend the date, or whether it has to be "reinstituted." MR. BARNETT answered that BSTA is "sunsetted" but is still in existence and doesn't terminate until June [2002]. On the books, it shows a sunset date of June 30 [2002], so the sunset date has to be reestablished for 2003, which [SB 115] would do. REPRESENTATIVE GREEN said he thought [the sunset date] was June 2001, and that the [sunset] had already happened. MR. BARNETT said [June 2001] was the original sunset date. REPRESENTATIVE GREEN asked if [the original sunset date] was extended to 2002. MR. BARNETT said there is one year wind-down period after the sunset date, and [BSTA] is in that wind-down period, as opposed to its being a termination date. Number 2318 REPRESENTATIVE KERTTULA asked the reason for the extension. She also asked Mr. Barnett if [BSTA] had planned on remaining after [the proposed extension] and whether the [extension] was too short or was the right amount of time. MR. BARNETT told Representative Kerttula [SB 115] was "somewhat tied" to SB 153, which terminates the grant program on June 30, 2004. So, with a sunset date of 2003 for BSTA and the wind-down year, [BSTA] would essentially terminate on [June 30, 2004]. He said a loan program would continue, and the need for BSTA would have to be evaluated later; at this time, however, BSTA and the Alaskan underground tank owners and operators are satisfied with this [date]. Number 2372 REPRESENTATIVE STEVENS asked whether the entire annual operating budget of $51,000 included travel and administrative costs. MR. BARNETT answered that BSTA was privatized in 1999 through SB 128, and the only costs associated with BSTA are for travel of the board members and for the sole employee, himself. The actual tank program costs are for the loan program and the grant program, and administration of that is under the operating budget through DEC. CO-CHAIR MASEK closed public testimony. Number 2427 REPRESENTATIVE FATE moved to report SB 115 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, SB 115 was moved out of the House Resources Standing Committee. SB 153-UNDERGROUND STORAGE TANK LOANS & PROGRAM [Contains discussion of SB 115] Number 2460 CO-CHAIR MASEK announced that the next order of business would be CS FOR SENATE BILL NO. 153(FIN), "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." Number 2470 ANNETTE KREITZER, Staff to Senator Loren Leman, Alaska State Legislature, presented SB 153 on behalf of Senator Leman, sponsor. She referred to the fiscal note on SB 115 and explained that in SB 153 there is a provision "that in the revolving loan fund will come the cost for the board." The programs are tied together, and as long as the underground storage tank (UST) program continues, the legislature will continue to decide if it wants to extend the board. She said, "Your conference committee will have to ratify the fiscal note with [SB] 115 with the operating budget for DEC [Department of Environmental Conservation], so that's what's going to happen with that $51,000 fiscal note." MS. KREITZER mentioned a sectional analysis provided to committee members. Since 1990, she said, the state has assisted small businesses to conduct risk assessment; build containment structures; upgrade, close, or install new USTs; and help clean up contamination. She said these efforts have protected water and lands from oil pollution. Furthermore, over $38.9 million has been appropriated since 1991 for this program, which is why there have been so many efforts to streamline the program and get a "handle" on the cost. MS. KREITZER told members, "One of the questions that we get [is]: how are applicants affected by the spill - people who have been waiting for state money to upgrade and close or clean up their underground storage tank site?" She said all applications for grant assistance for any of the programs under [AS] 46.03 had to have already been in; [the program] is not shutting people out, but dealing with existing lists. She said the current Senate Resources Committee chairman had sponsored SB 128. MS. KREITZER offered the following example of how the costs have been [reduced]: one of the programs was the upgrade and closure grant program, which is phased out completely by SB 153. Ms. Kreitzer said the reason is because prior to SB 128 in 1999, the total of applications for upgrade-and-closure grants was $3 million; after that legislation, the amount dropped to about $1 million, which is what was estimated to happen. In all actuality, the cost of the upgrade-and-closure grant applications, with all of the financial limitations on the program, dropped closer to about $35,000. She said the legislature had made [significant] progress in streamlining the program. Number 2661 JOHN BARNETT, Executive Director, Board of Storage Tank Assistance (BSTA), told the committee he was a private-sector contractor employed by BSTA. He said BSTA supports SB 153, an excellent piece of legislation. It cleans up the statutes by removing the upgrade-and-closure program in its entirety, and it sets a determination date for the grant program of June 30, 2004, which also coincides with the board's sunset. Currently, there are about 40 active grants, and it is estimated most of those will be wrapped up by that time. This bill provides an effective tool for "prodding" some of the applicants to get their paperwork done in a timely manner, which is helpful to BSTA. Furthermore, SB 153 converts the existing loan program to a revolving loan program. He said the hope is that it will help make the loan program self-sustaining for future remediation costs for long-term monitoring, and so forth, which will extend beyond 2004. MR. BARNETT noted that the bill limits who can get loans from the program. Currently, any company, individual, or business that originally applied for financial assistance in the "window of application" between 1990 and 1994 can get a loan. In 1999, SB 128 set some thresholds about who could get grants and who could get loans. Consequently, grants were limited to small businesses, but loans were still available to everyone, regardless of the size of the corporation. He said SB 153 is important because it sets a limit; the large corporations could not get loans from the state, and given the current low interest rates, certain corporations could conceivably make money off of the program if they were allowed to obtain loans. There are 57 applicants or entities that have expressed interest in applying for a loan, he noted, and 14 of those are large corporations that [SB 153] would eliminate. Number 2794 MR. BARNETT said [AS 46.03.422] limits applicants for loans to those that don't meet the federal self-insurability test, and it references] the federal C.F.R. [Code of Federal Regulations]. He reiterated that [SB 153] keeps the money in the smaller and medium-sized businesses for loans, retains the grant program, and gives [BSTA] time to "wrap up" the grants for the small "mom, and pops" and small, individual businesses. He concluded, "So it's a good bill. It's something that Senator Leman's office should be proud of. And both the Alaska Underground Tank Owners and Operators Association as well as the Board of Storage Tank Assistance urge passage of this bill." Number 2827 REPRESENTATIVE GREEN asked Mr. Barnett what the federal limit for self-insurability is. MR. BARNETT said it is a net worth of $10 million. On the loan list, it would eliminate a good percentage of the applicants and still leave the moderate-sized companies in there. Also, they do pay registration fees into the program. CO-CHAIR MASEK announced that public testimony was closed. Number 2985 REPRESENTATIVE FATE moved to report CSSB 153(FIN) out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSSB 153(FIN) was moved out of the House Resources Standing Committee.
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