Legislature(1999 - 2000)

04/27/1999 09:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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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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