The 2nd meeting of the Interim Joint Committee on Agriculture and Natural Resources was held on Wednesday, July 9, 2003, at 1:00 PM, in Room 149 of the Capitol Annex. Senator Ernie Harris, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representatives James Gooch, Co-Chair, and Roger Thomas, Co-Chair; Senators Paul Herron Jr, Daniel Kelly, Robert Leeper, Vernie McGaha, Virgil Moore, Joey Pendleton, and Elizabeth Tori; Representatives Royce Adams, Rocky Adkins, Adrian Arnold, Sheldon Baugh, Scott Brinkman, Dwight Butler, Mike Cherry, James Comer, Tim Couch, Mike Denham, Jimmy Higdon, Charlie Hoffman, Thomas McKee, Brad Montell, Fred Nesler, Don Pasley, Marie Rader, Rick Rand, Dottie Sims, Brandon Smith, Jim Stewart, Tommy Turner, Ken Upchurch, Susan Westrom, and Brent Yonts.
Guests: Jitter Allen, Altria, Inc.; Mark Farrow, Department of Agriculture; Nancy Yelton, Kentucky League of Cities; Secretary Hank List, Mark Mangeot, and Karen Wilson, Natural Resources and Environmental Protection Cabinet; and Bob Nickel, Petroleum Storage Tank Environmental Assurance Fund.
LRC Staff: Dan Risch, Tanya Monsanto, Hank Marks, D. Todd Littlefield, and Kelly Blevins.
The meeting was called to order and the secretary called the roll. A quorum was noted. A motion and second was then made to approve the minutes of the June 18, 2003 meeting. The motion passed.
Chairman Thomas presented the Rural Issues Subcommittee report dealing with rural health care and impediments encountered in getting tobacco money into the hands of tobacco farmers, especially in tobacco dependent areas. The report was adopted unanimously. Chairman Gooch presented the report of the Natural Resources Subcommittee dealing with reports on HB 524 and the working group on coalbed methane. The report was adopted unanimously.
Secretary Hank List reported on implementation of HB 174. Secretary List noted that reports will go to both this committee and Appropriations and Revenue. He introduced Rob Daniell, Director of the Division of Waste Management. Mr. Daniell presented a report on HB 174 implementation. He stated the goals of the legislation as closing abandoned landfills, addressing illegal dumps, road-side litter cleanup, and environmental education.
He discussed the funding sources of the Kentucky PRIDE Fund, the amount estimated to be generated, the current status of funding receipts, and distribution. Mr. Daniell discussed landfill closure prioritization, identifying 55 priority landfills, of which eight are selected for immediate action. He stated that as new information on priority landfills comes in, the ranking in priority may change. He discussed the closure plans for the eight identified landfills. He stated that capital accounts for each landfill will be established in August 2003, with design contracts awarded by December 2003, and construction contracts in 2004. He noted two reports which will be provided to Appropriations and Revenue in December 2004. Mr. Daniell reported on the status of illegal open dumps and the county reimbursement process. He discussed the requirements, proceedings, and funding for illegal open dump cleanup drives the first year, and for subsequent years.
Next, he discussed litter cleanup, noting Fulton, Hickman, and McClean are the only counties not accepting litter cleanup funds. He provided statistics relating to amounts cleaned up using the funds.
Chairman Gooch asked if methane gas at landfills could be used to affect costs of closure or used as county 25% match requirement. Secretary List noted existing sites using landfill methane and the requirements of such activity.
Senator Tori asked if the ERF was used for budget reduction. She was told, no. Senator Tori asked about illegal dump prioritization and asked if anything can be done about the $30 freon-free sticker and the difficulty of disposal which contribute to dumping of the items. Mr. Daniell noted that the freon removal certification and fee is a federal requirement and that as the program moves forward there is more recycling activity, and stated that we should encourage recycling of these white goods. Secretary List stated that this problem is something that should be addressed by this program.
Representative Yonts asked about the average amount received by counties for litter cleanup. He was told the range was from $9,000 to $500,000. Representative Yonts asked that county by county information be provided. Representative Yonts asked why counties would refuse funds. Mr. Daniell and Secretary List stated they did not know but that it seemed related to county/city cooperation and/or coming up with the 25% match.
Senator Leeper asked if the litter cleanup statistics presented were over and above the Adopt-a-Highway program. He was told the statistics include all cleanups. Senator Leeper asked if the road litter cleanup related to mowing contracts is included in statistics presented. He was told, no. Senator Leeper asked if requirements being made for the closure of landfills are more stringent than other states like we are experiencing with the Brownfields program or are they national and uniform. Mr. Daniell said the procedure for closure of a landfill is consistent nationwide and will be so in Kentucky.
Representative Baugh asked if the total 1173 identified illegal dumps is a "moving target". He was told, yes, there are more dumps in existence than are reported. Representative Baugh asked if more dumps are discovered in out years will they continue to be reimbursed. He was told yes, there may be 10,000 illegal open dumps statewide.
Senator Moore asked about the tire pickup program. Mr. Daniell said all counties will participate in the amnesty program.
Senator Harris asked about the impact of the fee on small waste hauling. Mr. Daniell stated that they are working with the small facilities to get generators notified of the fee. Senator Harris asked if an update can be provided at some point regarding the impact of the fee on small haulers. Senator Harris asked about the Red Pen landfill and was told that it is a super fund site not included in the HB 174 program. Senator Harris stated that this program is one of the success stories of the past few legislative sessions.
Representative Gooch spoke about the impact of the fee on cities that have construction demolition sites that are used to collect waste from disasters and asked if there is a way to help cities with this cost. Mr. Daniell responded saying that they are trying to help with recycling but the fee is due if it goes to a landfill.
Chairman Harris introduced Robert Nickel to provide a status report on the petroleum storage tank assurance fund.
Mr. Nickel reported on four areas. First, was an overview of the fund including its statutory authority, the $0.014 fee on gasoline and special fuels, regulations, fund purpose, and federal requirements, the three different accounts (the financial responsibility account, the petroleum storage tank account, the small owners tank removal account). Mr. Nickel noted that the office of the Fund is not authorized to regulate or close facilities; that authority is with the Natural Resource and Environmental Protection Cabinet (NREPC).
He discussed the number of facilities and level of participation for each account, including total reimbursements for each account.
Chairman Harris stated that it appears we are one-third of the way through. Mr. Nickel stated that not all who are eligible will seek use of the funds. Senator Harris asked if ATI bankruptcy is paid in full. He was answered, yes.
Mr. Nickel discussed the MOU between NREPC and the OPSTEAF, signed on August 11, 2001. Mr. Nickel stated that both agencies are encouraging pay for performance contracts, both agencies are approving plans jointly, communication has been greatly enhanced, and there are quality review meetings.
Representative Smith asked how much money has been paid in by owner/operators. Mr. Nickels said $350 and $400 million. Representative Smith asked if the fund is generating more than is needed in light of transfers from the fund. Mr. Nickel discussed the biennial actuarial analysis. He stated that at one time there was an obligation of $319 million. There was a $1 million cash balance: $170 million has been taken out.
Senator Harris asks how much was generated. Mr. Nickels said $45 to $46 million.
Senator Leeper asked about the $319 million figure. He asked if there is a firm figure of known obligations Mr. Nickel said $54 million is obligated right now.
Senator Leeper cited an example of a cleanup taking 12 years. Mr. Nickel said he is not surprised and that he has a recommendation about this.
Representative Yonts asked if delay problems are created due to two cabinets being involved. Mr. Nickel said no, it is an issue of resources. Representative Yonts asked how contract work is verified. Mr. Nickel stated that 17 auditors do this. A discussion occurred between Mr. Nickel and Representative Yonts regarding how to deal with bills for contract work that is not done and the responsibility of owners for this.
Representative Stewart asked if there is a charge under the small business account. He was told, no. He then related the situation of an owner who was fined.
Mr. Nickel next identified and discussed compliance with the provisions of SB 93 of the 2003 session. He stated that a surplus does not now exist and will not exist until 2009. He discussed the deadline and sunset provisions provided. He next discussed the budget and finances of the fund relating that, "it's not a real pretty picture". He recommended that a study group be established by the legislature to conduct a review and study of the program, and listed the areas that such a study should report on.
Chairman Harris announced the next meeting and the American Electric Power, Big Sandy tour. There was a brief discussion of subcommittee schedules.
The meeting adjourned at approximately 3:30 p.m.