REPRESENTATIVE BRICE asked about specific recommendations. He noted that he introduced HB 132 and co-sponsored HB 213, which dealt with these problems, and asked if the task force would be available to write a letter of recommendation. MS. WILLIAMS stated that Charlie Boddy was the member of the task force that would be most suited to write that letter. CHAIRMAN DAVIS acknowledged the presence of Senator Leman at 2:05 p.m. MS. WILLIAMS said many types of businesses contacted them about underground storage tanks. There is a problem regarding these tanks. The state has a fund through which they collect money for clean up. There does not seem to be an understanding by the tank owners, big and small, why they pay this fee. Another problem involves the procedure for getting final closure on an underground storage tank. Apparently someone will jump through the hoops and go through the process to get their tank closed. However, instead of closing the tank it will be put on inactive status, which results in a cloud on the property's marketability. REPRESENTATIVE HUDSON asked why that was. MS. WILLIAMS did not know why. She said that agency officials did not testify at the hearings. She also said that it did not make any sense to expend the time and money to solve the problem, if it never gets resolved. CHAIRMAN DAVIS commented that the committee would investigate this problem. SENATOR LINCOLN asked if any agencies testified or were invited to testify. She wanted to know if it was the task force's choice not to have agency people at the hearings. MS. WILLIAMS stated that was not the intent. She said that the time restraints and the governor's approach, allowed the task force to go directly to the affected parties and review their testimony and then draft recommendations. She said that the agencies may not have had invitations to the hearings, but they had the opportunity to show up. MS. WILLIAMS mentioned that there were some recommendations that would catch the eye of environmental groups. And that they showed up at some of the hearings with copies of the drafts of regulations. SENATOR LINCOLN asked if the agencies knew they had the opportunity to testify. MS. WILLIAMS said they may or may not have known. SENATOR LOREN LEMAN said they were not invited or excluded. SENATOR LINCOLN asked it the task force considered above ground storage tanks as well as those underground. MS. WILLIAMS was not sure if some of the regulations applied to above and underground storage tanks. REPRESENTATIVE HUDSON commented that the Federal EPA UST (Environmental Protection Agency, Underground Storage Tank) program applies to underground storage tanks, while Alaska's LUST (Leaking Underground Storage Tank) program applies to underground storage tanks. Our LUST program was put into place to comply with federal law so the state would not lose federal money, he said. SENATOR LINCOLN mentioned that since the task force was focusing on economic opportunity, they should consider above ground storage tanks. Approximately 95% of the storage tanks in rural Alaska are above ground. The Coast Guard has threatened to close all the tanks down this year, she noted. MS. WILLIAMS pointed out Specific Industry Recommendation No. 8, which suggests eliminating the DEC's requirement of an annual fee for an underground storage tank. Owners of large numbers of tanks are being charged thousands of dollars a year in annual fees. This has a serious negative impact and is basically a hidden tax, she stated. REPRESENTATIVE BRICE asked where the fee went. MS. WILLIAMS said the fee is supposed to cover registering the tank. There is some rather extensive paperwork involved to register an underground tank. However, she questioned the necessity to re-register next year. There is a process already mentioned for digging up a tank, but if the same tank is still underground in the same place, she wondered why it should be re-registered. "The agency is looking for additional revenue. Call it a tax. It is an unfair and unnecessary tax," she said. She commented that these underground tanks have already closed down many small businesses. SENATOR LEMAN commented that he wasn't trying to justify the program, but rather providing some names of people with whom to follow up. CHAIRMAN DAVIS mentioned that he planned on adjourning the meeting around 2:30 p.m. MS. WILLIAMS referred committee members to page 14, Specific Industry Recommendation No. 9. The man that brought it to the task force's attention is the man who would be able to produce the oil and create the jobs, she said. One of the products out of a refinery is heavy bunker oil. In 1972, a set of taxes was imposed on refinery products. A tax of $2.10 per barrel was imposed on bunker oil. This priced Alaska's heavy bunker oil right out of the market, she alleged. Bunker oil is a low grade oil that doesn't create much of a price, she explained. No heavy bunker oil has been sold in Alaska since, and no tax has been collected. MS. WILLIAMS claimed Princess Tours has considered purchasing heavy bunker oil from the Kenai refinery, but only if the price is lowered by lowering the tax to become competitive with the price of bunker oil from British Columbia. Ms. Williams also mentioned that taxes are rising in British Columbia and that it may not be very difficult to create a simple little industry in Alaska by reducing or deleting the tax. CHAIRMAN DAVIS mentioned that bunker oil is a byproduct of the North Slope oil that Tesoro refines and it is a residual. There is nothing they can do with it. It gets hauled out of the state, he added. MS. WILLIAMS said it is getting sold out of state so Alaska is not collecting any tax on it either. REPRESENTATIVE BRICE commented that many of the regulations were good legislation ideas. He was concerned that there were no recommendations addressing procurement practices. During the campaign he was told by many people about problems with state procurement procedures, which are generally not favorable to small businesses. They can be difficult to compete with and he cited [the Department of] Corrections as an example. MS. WILLIAMS stated that several people testified on procurement, especially relating to the graphic services of the University of Alaska Fairbanks and other general comments about [the Department of] Corrections. She recalled concluding that the University was at fault in its procurement practices, though it was not included in the task force's recommendations. Apparently the problem is not with the regulations, but how they are being carried out, she declared. REPRESENTATIVE BRICE said procurement laws are written so that there is generally a tendency to help bigger and larger out of state businesses. MS. WILLIAMS said she went to a presentation of the Alaska Manufacturers Association, where one of the individuals was complaining about competition under procurement. He claimed that they weren't getting a preference. She said that, in fact, the state is underwriting a lot of Alaska businesses with its bidder preferences. REPRESENTATIVE HUDSON suggested that in many cases a law is enacted that gets passed from the governor to a commissioner, then a director, and so on. Unfortunately, the legislature does not follow up on the laws to see that the intent is being met. He said, "We need to make sure what we are doing is serving the public's interest." The task force has maybe touched the tip of the iceberg in its initial investigations. He was interested in suggestions of how to get the big picture in sifting through these regulations. Governor Lamm of Colorado put out a very good paper that suggested society is constantly confronted with affordable risks, he said. REPRESENTATIVE HUDSON claimed we take a risk walking across the street. If the government is going to implement laws and regulations, they should be because the public can't afford the risk of not doing so. Unfortunately, they keep costing and costing even though the public can afford the risk. Basically there needs to be a much more thorough analysis of the cost benefit ratio, he concluded.