Legislature(2001 - 2002)
04/20/2001 04:03 PM Senate RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SB 153-UNDERGROUND STORAGE TANK LOAN FUND
CHAIRMAN TORGERSON announced SB 153 to be up for consideration.
MS. ANNETTE KREITZER, staff to Senator Leman, sponsor of the
measure, told members that a proposed committee substitute (CS) had
been prepared. She explained that the intent of SB 153 is to
terminate the upgrade closure underground storage tank grant
program as of June 30, 2001 and to create a revolving loan fund.
The committee substitute changes the termination date of the
upgrade closure and cleanup grant program to June 30, 2004 and
creates a revolving loan program for underground storage tank
cleanups.
CHAIRMAN TORGERSON recommended that members adopt the CS as he
didn't think the legislature should terminate the grant program so
soon after fixing it last year. He said he doesn't have any
objections to changing it to a revolving loan fund. He thought the
committee needs to discuss whether the state should have a
subsidized loan program for some of the recipients who are large
corporations with billions of dollars in assets or whether to put
in another filter that only allows subsidized loans for the "mom
and pop" operations and medium sized corporations. He suggested,
"One of the tests that has been suggested is to use the EPA rules
for self insurance, that anyone who is eligible for self insurance,
which we think, is $10 million in net assets, would not be eligible
for a subsidized loan."
He said he does not want to shut the door on large corporations
that want to use the loan program and suggested offering a
commercial rate for them.
SENATOR TAYLOR asked what the full cost of the program was.
MS. KREITZER answered that it is about $40 million in total.
MR. JOHN BARNETT said he is a private contractor who provides
support services to the Board of Storage Tank Assistance and that
he supports the CS. He noted, "We have about 47 grantees who went
through the filtering system in SB 128 a couple of years ago and
they are in the middle of their cleanup or just starting their
cleanup this season. We feel we can get them all wrapped up by
2004." He said the board also supports a filtering system for the
loan program as the larger companies could drain the loan capital
fairly quickly.
SENATOR ELTON asked why the state would create a loan fund for
underground fuel tanks. He noted that someone brought to his
attention that if a "mom and pop" operation has an above ground
tank that spills in an earthquake, they wouldn't be eligible for
this program.
CHAIRMAN TORGERSON said they aren't eligible now either.
SENATOR ELTON agreed and added that if they are going to create a
new loan program, they should look into the fiscal impact of
expanding it to other people in a similar situation.
CHAIRMAN TORGERSON asked how above ground tanks are dealt with now.
MR. BARNETT responded that no programs exist for above ground
tanks. Basically, if an owner has a heating fuel tank and the fuel
has spilled, the owner is liable to clean it up. He stated, "I'm
sure many of you are aware of home sales that have been delayed
because of contamination. Basically, if an owner has a heating fuel
tank and it spills, they are obligated 100 percent to clean it up.
It's usually not too much of a problem unless it hits ground
water."
MS. KREITZER added that the purpose of this bill is to reduce the
state's involvement, but that she would be glad to get information
for him on the issue.
CHAIRMAN TORGERSON asked if the federal program still exists.
MR. BARNETT explained that the federal program has very stiff
penalties and is basically designed to affect commercial
facilities. He said there is no real threat from the federal level
for residential tanks at this point in time.
CHAIRMAN TORGERSON took public testimony.
MR. JOHN COOK, a resident of Sterling, told members, "If it wasn't
for the 220 Board, I wouldn't be in existence today." He didn't
know how a person could afford to pay a loan if he or she could
barely afford to pay rent. He said the oil companies control the
price of gas and, in his case, the oil company put in their tanks
and pumps and maintained them, but "as soon as they got word about
underground spills, they sold all their stations and bailed out."
He said the "mom and pop operations" can't survive without the
grant program. He said DEC raided his place in 1990 and took out
3,000 cubic yards [of soil] - five times more than necessary. Then
they put $35,000 worth of useless fence around his place and put a
lien on his property. It destroyed his life. He warned that they
have to keep DEC in check.
MR. GARY WEBER, President, Alaska Underground Tank Owners and
Operators Association, supported CSSB 153. He said their 47 members
had releases prior to 1989. They have been on the waiting list for
the last 10 years and have worked their way up to where it's their
turn to start cleaning up. Thirteen of them are starting their
investigation and the rest of them are in the process of cleaning.
He thought they could have it done by 2004 if the grant fund is
adequately funded. He said they were supposed to have liability
insurance in place as of two or three years ago.
MS. LILLIAN KELLY, Kelly's Tire, said for the first 20 years, her
business sold gasoline using the available technology. In 1989 they
came under the Clean Water Act and have been working with the state
for 11 years. She said that small businesses simply cannot afford
the price of cleanup or and do not have the ability to pay off
loans up to $1 million. She asked them to leave the grant in place
until at least until 2004.
CHAIRMAN TORGERSON said they would set the bill aside and work on
the committee substitute over the weekend.
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