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OIL & HAZARDOUS SUBSTANCE RELEASE PREVENTION & RESPONSE FUND Fiscal Year 2005 – 2006 BIENNIAL REPORT July 1, 2004 through June 30, 2006 Alaska Department of Environmental Conservation Prepared by the Division of Spill Prevention and Response Presented to the First Session of the 25 th Alaska Legislature January 8, 2007 Sarah Palin, Governor Mike Maher, Acting Commissioner DEPARTMENT OF ENVIRONMENTAL CONSERVATION OIL AND HAZARDOUS SUBSTANCE RELEASE PREVENTION AND RESPONSE FUND FISCAL YEAR 2005 – 2006 BIENNIAL REPORT TO THE LEGISLATURE JULY 1, 2004 THROUGH JUNE 30, 2006 January 2007 This page intentionally left blank. OIL AND HAZARDOUS SUBSTANCE RELEASE PREVENTION AND RESPONSE FUND BIENNIAL REPORT FISCAL YEAR 2005 & 2006 TABLE OF CONTENTS Page Introduction …………………………………………………………………………………… 1 Oil & Hazardous Substance Release Prevention & Response Fund Diagram …………………. 3 Reports: Table A: Summary of Fiscal Year 2005 & 2006 Expenditures and Obligations .............. 5 Table B: Prevention Mitigation and Response Mitigation Revenues ………………….... 8 . Table C: Revenue Sources .............................................................................................. 13 Table D: Summary of Response Contracts & Purchases in Excess of $10,000.00 ….…… 14 Table E: Summary of Fiscal Year 2006 & 2007 Appropriations .………………………... 16 Table F: Fiscal Year 2005 & 2006 Sites or Incidents Expenditures ..…………………..... 18 Table G: Fiscal Year 2005 & 2006 Personal Services Costs for Sites or Incidents……...... 31 Table H: DEC Inventory of Contaminated Sites and Leaking Underground Storage Tanks Sites Ordered Alphabetically by Location and Showing Priority Classifications .. 54 Table I: DEC Inventory of Active Contaminated Sites and Leaking Underground Storage Tanks Sites Ordered Alphabetically by Location…………………………………….. 57 Table J: Inventory of Closed Contaminated and Leaking Underground Storage Tanks Sites Ordered Alphabetically by Location ……..………………………………… 81 Appendix 1: Community Spill Response…………………………………………..……. 99 Appendix 2: Project Summaries…………………………………………………………. 99 Appendix 3: Oil & Hazardous Susbstance Rleases Alaska Statutes ...................................... 145 This page intentionally left blank. Introduction The Oil and Hazardous Substance Release Prevention and Response Fund (Response Fund) was created by the legislature in 1986 to provide a readily available funding source to investigate, contain, clean up and take other necessary action to protect public health and welfare and the environment from the release or threatened release of oil or a hazardous substance. Alaska Statute 46.080.030 states: “ It is the intent of the legislature and declared to be the public policy of the state that funds for the abatement of a release of oil or a hazardous substance will always be available.” (SLA 1986 Sec.1 Ch. 59). Statutes governing the Response Fund were amended in 1989, 1990, 1991, 1994, 1999, and 2006. Generally, these amendments increased the purposes for which the Response Fund could be used and increased the Department of Environmental Conservation’s (DEC) reporting requirements. In addition, the 1994 amendment made major changes to the Response Fund structure by dividing the Response Fund into two separate accounts: the “response” account and the “prevention” account. The diagram on page 3 illustrates the current structure of the Response Fund. The 1999 amendment changes the requirement for an annual report to the legislature on the status of the fund to a biennial report. The 2006 amendment changed the surcharge levied on crude oil produced in the state. HB3001C amended Sec. 28 of AS 43.55.300 and imposed a prevention account surcharge of $.04 (formerly $.03) per barrel of oil produced from each lease or property in the state, less any oil the ownership or right to which is exempt from taxation. Sec. 26 of AS 43.55.201 was also amended to change the response account surcharge of $.02 to a $.01 per barrel of oil produced from each lease or property in the state. Response Account The Response Account may be used to finance the state’s response to an oil or hazardous substance release disaster declared by the governor, or to address a release or threatened release that poses an imminent and substantial threat to the public health or welfare, or to the environment. To access the Response Account for any incident other than a declared disaster, DEC must notify the governor and the Legislative Budget and Audit Committee within 120 hours of using the money from this account. The Response Account was financed with a two cent per barrel surcharge and money recovered from responsible parties until March 31, 2006. Effective April 1, 2006, House Bill 3001C changed the surcharge tax of $.02 per barrel to a $.01 per barrel imposed on all oil produced from each lease or property in the state. This surcharge is in addition to the four cent surcharge that finances the Prevention Account. The surcharge is suspended when $50 million is reached from the combined balances of the surcharge account, the response mitigation account and the unreserved and unobligated balance in the Response Account. The $50 million balance was exceeded in December, 1994 and the surcharge was suspended as of April, 1995. 1 Prevention Account The Prevention Account may be used to respond to oil and hazardous substance releases that have not been declared a disaster by the governor. In addition, the Prevention Account is used to fund Alaska’s oil and hazardous substance prevention and response programs. The legislature appropriates money from the Prevention Account to support DEC and other state agencies for spill prevention response and preparedness planning activities (AS46.08.040(a)(2). The Prevention Account was financed with a three cent per barrel surcharge and fines, settlements, penalties and interest thru March 31, 2006. Effective April 1, 2006, House Bill 3001C changed the surcharge tax of $.03 per barrel to $.04 per barrel imposed on all oil produced from each lease or property in the state. 2 Oil & Hazardous Substance Release Prevention and Response Fund (OHSRPRF) 1¢ 4¢ GENERAL FUND | SURCHARGE ACCOUNT1 | 2 AS 43.55. 01 SURCHARGE ACCOUNT 2 | AS 43.55.300 (Suspended @ $50 million) | | | | | | | | RESPONSE MITIGATION ACCOUNT | PREVENTION MITIGATION ACCOUNT AS 46.08.025 (b ) | AS 46.08.020 (b) | | Cost Recovery, funding received from Cost recovery, fines, penalties, | state, federal or private sources. settlements, funding from state, | federal or private sources. | | | | Oil & Hazardous Release Prevention and Response Fund AS 46.08.010(a) | | | | | | PREVENTION RESPONSE | ACCOUNT ACCOUNT | AS 46.08.020 | AS 46.08.025 | | | | Legislative Emergency Uses | Appropriation | AS 46.08.040(a)(1) | AS 46.08.040(a)(2) USES: USES: * Investigate, evaluate, contain, cleanup, monitor and assess a * Investigate, evaluate, contain, and cleanup a release or threatened release of release or threatened release of oil or hazardous substance that oil or hazardous substances. poses an imminent and substantial threat to public health or welfare * Establish and maintain spill response capability. or the environment. * Review oil discharge prevention and contingency plans. * Match federal funds for release. * Maintain spill response contracts and agreements. * Recover cost to the state, a municipality, a village, or a school * Conduct training, response exercises, inspections, and tests. district for cleanup. * Verify or establish preparedness of the state. * Recover state costs. * Verify proof of financial responsibility. * Acquire, repair and improve spill response equipment caches. * Prepare, review and revise regional and state spill plans and local Hazmat plans 1 House Bill 3001C amended AS 43.55.201 Sec. 26 and changed the Surcharge from $.02 to $.01 effective * Participate in federal oil discharge cleanup activities. 4/1/2006 * Assess effects of a release. * Recover state costs. 2 House Bill 3001C amended AS 43.55.300 Sec. 28 and changed the Surcharge from $.03 to $.04 effective * Restore the environment. 4/1/2006 Revision Date: 12/4/2006 3 This page intentionally left blank 4 Table A summarizes expenditures and year-end obligations for appropriations funded by the Oil and Hazardous Substance Release Prevention and Response Fund (Response Fund) in Fiscal Year 2005 and 2006. Table A Summary of Fiscal Year 2005 Expenditures and Obligations (In Thousands) Appropriation Description Expended Obligated Total Prevention Account Operating Budget: Information & Administrative Services 1,472.5 0.0 1,472.5 State Support Services 180.6 0.0 180.6 Laboratory Services 13.4 0.0 13.4 Central Highways 700.0 0.0 700.0 Northern Regions Highway & Aviation 125.0 0.0 125.0 Spill Prevention & Response Director's Office 214.0 0.8 214.8 Spill Prevention & Response Industry Preparedness Note 1 2,785.1 193.1 2,978.2 Spill Prevention & Emergency Response Program 2,873.0 53.7 2,926.7 Spill Prevention & Response Fund Administration 1,158.6 173.2 1,331.8 Spill Prevention & Response Contaminated Sites Note 2 5,546.0 185.6 5,731.6 Local Emergency Planning Committee 215.3 86.5 301.8 Subtotal Fiscal Year 2005 Operating Budget: $ 15,283.5 $ 693.0 $ 15,976.4 Other Budget Appropriations: Transfer to Underground Storage Tank Revolving Loan Fund 875.0 0.0 875.0 Subtotal Fiscal Year 2005 Other Budget Appropriations: $ 875.0 $ - $ 875.0 Prior Year Operating (funds obligated and paid out of prior year appropriation) Spill Prevention & Response Director's Office 0.2 0.0 0.2 Spill Prevention & Response Industry Preparedness
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