The 3rd meeting of the Subcommittee on Natural Resources of the Interim Joint Committee on Agriculture and Natural Resources was held on Wednesday, October 12, 2005, at 10:00 AM, in Room 149 of the Capitol Annex. Representative W Keith Hall, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative W Keith Hall, Co-Chair; Senator David E Boswell,; Representatives Hubert Collins, Reginald K Meeks, Terry Shelton, and Jim Stewart III.
Guests: Rob Daniell, Underground Storage Tank Branch; Bruce Scott, Division of Waste Management; Bethel, Valerie, and Paul Ison; Eric Gregory, East Kentucky Power Cooperative; Dan Terrell, Tom Monarch, and Mark Sweet, Shield Environmental Associates, Inc.; Tom and Bill Erwin, Southland Service Inc.; and Bruce Williams, Kentucky Conservation Commission.
LRC Staff: Hank Marks, Tanya Monsanto, and Kelly Blevins.
Chairman Hall called the meeting to order. A quorum was not established.
Chairman Hall introduced Robert Daniell, Manager of the Underground Storage Tank (UST) Branch and Bruce Scott, Director of the Division of Waste Management. A Power Point presentation was provided by them covering: the reorganization of the UST branch and program; financial activity and program responses in FY 04 and FY 05; goals of proposed regulatory amendments to the UST program; projected FY 06 status of the UST program; trends in claim payments, obligations, and appropriations; the impact of the federal Energy Bill on UST; and how UST impacts the environment.
After the presentation Representative Collins said that the restructure of the UST program is the greatest positive step in a long time. He said that something similar should be done for the septic system permitting process. He asked if the jobs that contractors did were bid and bonded. Mr. Daniel said no.
Then Rep. Collins noted that after a tank removal the area affected is often not properly restored. He said that large corporations disproportionately benefit when compared with the benefits of small businesses. Then, Rep. Collins asked about the federal money which will come to the state from provisions of the federal Energy Bill. He concluded his remarks stating that the UST program has been one of the greatest disappointments.
Senator Boswell commended the personnel of the UST branch. He stated that the transfer of UST funds generated by the 1.4 cents tax on each gallon of gasoline for the UST program to the general fund is a public deception. He said the fault in the program's failures rests with the General Assembly and the administrations.
Chairman Hall noted the difficulties faced by the UST branch with a 30% reduction in personnel. He stated that he could never remember a time when an administration defended the UST budget, or stating that the funds being transferred in each budget were absolutely needed. He stated that the UST budget transfers should stop. Chairman Hall also stated that the no-bid, no bonding process was wrong. He asked about how much funding would come from the federal Energy Bill and what personnel and funding would be needed to closed out the program.
Mr. Daniel stated the amount of federal funding is not known, but that the amount will be dependent on how much is actually budgeted and available for the UST program. Mr. Daniel stated that staff was adequate. Finally about $200 to $300 million would be needed to close out the program.
Representative Collins stated that if a surplus is ever left in the UST fund it should go to transportation.
Senator Boswell asked if Kentucky's having raided the fund will result in less federal funds. Mr. Daniel stated yes.
Representative Hall asked about the 300 facilities identified with minor contamination. Mr. Daniel replied that about 200 would received closure letters.
Representative Hall asked about the extent to which the UST program changes reflect the findings of a 2000 report of findings and recommendations on the UST program. Mr. Daniel stated that the changes are reflective of the report recommendations and was provided with examples.
Then Mr. Daniel described the new "pay for performance" procedures in terms of savings and efficiency.
Representative Collins asked how the amount of money to be paid to a contractor is determined. Mr. Daniel described the current process of filing claims and how a pay for performance process who reduce claims disputes and ensure immediate remediation of properties in the program.
Representative Stewart inquired about the current status of cleanups and stated that he felt that after so many years, the sites should have been cleaned up, and the funds would be better spent going to Transportation to make roads safer.
Then, Dan Terrell, Tom Monarch, and Mark Sweet of Shield Environmental Associates, Inc., described their business and its relation to the UST program. He stated that money got in the way of doing what was necessary to cleanup the environment. As the money is spread thin, he said, we may reach more places at the expense of cleaning up those with the most need. He said that the licensed community of engineers and geologists is not involved in the process, and provided examples. He discussed impact of fund transfers on employment and small business solvency. he stated that the pay for performance system will be a good thing.
Chairman Hall asked if there were recommendations they would like to make. He was told that implementing the pay for performance system and involving contractors more in the process are necessary.
Senator Boswell asked if there is technology that can make tanks secure. He was told that technology can help, but there will always be leaks. Training, combined with vigilance, is key.
At this time Chairman Hall called Bill and Tom Erwin to the table to discuss the problems they have encountered with the UST program relating to their Lexington property. They stated that they have been involved with the UST program for 8 1/2 years and no work has yet been done on their property. They identified years of communications problems.
After their testimony Chairman Hall asked Robert Daniell of the UST branch to help the Erwins, and stated that for the General Assembly's part, it would seek to protect the needed funds for the UST program.
An extended discussion of the Erwin's property and the UST program ensued between the Erwins, UST personnel, Tom Monarch of shield, and committee members.
At this time the Ison family provided testimony relating to their Flemingsburg property. Paul Ison spoke for the family, stating that the unfinished work on his parents commercial property had impoverished his parents. His parents spent their retirement savings on trying to clean up the property, but lost a significant amount of business income because of the unfinished work by contractors.
Chairman Hall stated that he would tell the full Agriculture and Natural Resources Committee that the fund should not be transferred and asked that he be kept informed about progress on the Ison's property.
There being no further business, the meeting was adjourned.