Allows for the transfer of funds from the Hawaii Capital Loan Revolving Fund to the DOH Leaking Underground Storage Tank Fund. Expands the permissible uses of moneys in the LUST Fund. (HB659 HD2)

A BILL FOR AN ACT

SECTION 1. The legislature finds that leaking underground storage tanks have been and continue to be a source of great concern for potential environmental contamination. Many of these tanks have been in the ground for more than twenty years and have exhibited corrosion and other forms of decay. The seepage of petroleum into an aquifer or well could lead to the contamination of a drinking water supply, and this would have disastrous consequences for the citizens of Hawaii.

Because of such concerns, the United States Environmental Protection Agency has promulgated a variety of standards that must be met by all owners of underground storage tanks. Unfortunately, these federal requirements can be costly and tend to fall hardest upon small, independently-owned service stations.

In an effort to address the financial needs of small, independent service stations, the legislature enacted Act 267, Session Laws of Hawaii 1991, which assessed a fee of $250 per

tank for petroleum underground storage tanks currently in use and deposited these funds into the Hawaii capital loan revolving fund for the purpose of providing low interest loans to qualified applicants to upgrade their tanks to meet federal requirements.

The legislature finds, however, that the collection of the tank fee was repealed on January 1, 1994, and the loan fund has rarely been used, with the result that there currently remains a balance in the fund of approximately $2,056,978. The December 22, 1998, federal deadline to replace, upgrade, or close substandard underground storage tanks has passed. Therefore, the legislature finds it appropriate to use these funds to respond to actual leaks of petroleum from underground storage tanks and to conduct inspections at underground storage tank facilities. The legislature further finds that the department of health has undertaken a highly successful effort to educate tank owners as to leak prevention techniques and other legal requirements. The tank owners who have primarily benefited from the department's public outreach efforts are the same individuals who were the intended beneficiaries of Act 267.

The purpose of this Act is to transfer the balance of the moneys remaining in the Hawaii capital loan revolving fund collected pursuant to Act 267 to the department of health leaking underground storage tank fund, so that the funds can be used for education, outreach, inspections, and release response.

SECTION 2. Section 342L-51, Hawaii Revised Statures, is amended to read as follows:

(b) [Moneys] Except for moneys appropriated to the fund through federal grants, moneys from the fund [shall] may be expended by the department [for the sole purpose of responding] to:

(c) Moneys appropriated to the fund through federal grants shall be expended by the department for the sole purpose of responding to petroleum releases from underground storage tanks or tank systems in a manner consistent with this chapter.

[(c)] (d) Moneys in the fund, which were appropriated to the fund through a federal grant and which have been collected by the department as part of its cost recovery efforts pursuant to section 342L-53, may be paid to the federal government when such repayment is required by a condition in the relevant federal grant."

SECTION 3. There is appropriated out of the Hawaii capital loan revolving fund under section 210-3, Hawaii Revised Statutes, for fiscal year 2001-2002, all unexpended and unencumbered moneys remaining in the Hawaii capital loan revolving fund at the close of business on June 30, 2001, that were collected pursuant to Act 267, Session Laws of Hawaii 1991, up to $2,500,000, to be deposited into the leaking underground storage tank fund under section 342L-51, Hawaii Revised Statutes.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 4. There is appropriated out of the leaking underground storage tank fund the sum of $2,500,000 or so much thereof as may be necessary for fiscal year 2001-2002 to carry out the purposes of the leaking underground storage tank fund.

The sum appropriated shall be expended by the department of health for the purposes of this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval, except that sections 3 and 4 shall take effect on July 1, 2001.