Purpose

Establishes a Municipal Tank Closure Program to provide financial assistance in the form of grants to small cities and towns to close orphaned underground storage tanks (USTs). Transfers unobligated monies in the UST grant account to the newly established municipal tank closure program fund by the end of 2001.

Background

The state UST program was established in 1986 by the Legislature to implement UST regulations adopted by Congress in 1984. The UST program is designed to prevent and clean up releases of petroleum and other hazardous (regulated) substances into the groundwater, surface and subsurface soils. The state program also provides financial assistance to UST owners and operators for upgrading and removing tanks and remediating contamination from leaking USTs.

Legislation vetoed by the Governor in 2000 would have established a municipal tank closure program for small communities and would have authorized the collection of a temporary $.01/gallon excise tax on regulated substances placed in USTs for three years to pay for approved but unpaid claims against the UST assurance account, as well as to pay for the municipal tank closure program (S.B. 1319).

The proposed strike everything amendment to S.B. 1324 establishes a municipal tank closure program to provide financial assistance to small communities with high concentrations of USTs for which there is no responsible owner or operator. This assistance, in the form of grants, will allow the city or town to properly close USTs that have contributed to soil or groundwater contamination or could contribute to such contamination in the future.

The proposed strike everything amendment to S.B. 1324 has no anticipated fiscal impact to the general fund; however, according to ADEQ, there will be approximately $3.5 million dollars available in the UST grant account by the end of 2001 that will be transferred to the municipal tank closure program fund.

Provisions

1. Establishes a Municipal Tank Closure Program to provide financial assistance in the form

of grants to small cities and towns to close leaking USTs. Eligible applicant include

cities and towns that meet the following conditions:

· Have a population of less than 15,000.

· There is a concentration of at least 15 USTs for which there is no responsible owner or operator.

· There are three or more reported leaking UST sites within the city or town.

2. Establishes the municipal tank closure program fund to be administered by ADEQ. The fund consists of monies transferred from the UST grant account. Unobligated monies are to be transferred from the grant account before December 31, 2001. Allows ADEQ to use to up ten percent of monies in the fund for the administration of the program.

3. Specifies information to be included in a grant application, including an identification of the approximate location of the USTs to be closed, a comprehensive cost estimate for the closure project and a copy of the request for proposal used by the city or town for contracting for the closure work.

4. Requires ADEQ to consider grant applications in the order received, and subject to the availability of monies, make grants of not more than $500,000 to each eligible city or town. Limits each city and town to only one grant.

5. Provides that after a grant is awarded by ADEQ, the Department shall reimburse the successful applicant for costs incurred preparing the application and administering the grant. This reimbursement is capped at $40,000.

6. Requires each grant recipient to provide a report to ADEQ upon completion of the project that includes specified information, including the identification of each facility included the project, information relating to soil and water sampling and a completed notification for USTs form for each tank closed under the project.

7. Requires ADEQ to issue a determination of whether the closure requirements have been met within 30 days of receiving a closure project report.

8. Provides that if the closure requirements have been met, ADEQ shall issue a letter to the affected persons stating that the closure requirements have been met, and release funds from the grant award to pay the actual costs incurred for each UST closure.

9. Requires UST closure costs to be invoiced using the statutory cost schedules when applicable and if no cost schedules exist, the costs are to be consistent with industry standards.

10. Makes a technical change.

11. Provides for a general effective date.

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