HB 322: "An Act relating to penalties for discharges of oil and other pollution violations; relating to oil discharge prevention and contingency plans for commercial motor vehicles transporting crude oil; and providing for an effective date."
00 HOUSE BILL NO. 322 01 "An Act relating to penalties for discharges of oil and other pollution violations; relating 02 to oil discharge prevention and contingency plans for commercial motor vehicles 03 transporting crude oil; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 46.03.758(a) is amended to read: 06 (a) The legislature finds that 07 (1) [RECENT INFORMATION DISCLOSES THAT] the discharge of 08 oil may cause significant short and long-term damage to the state's environment; even 09 minute quantities of oil released to the environment may cause high mortalities among 10 larval and juvenile forms of important commercial species, may affect salmon 11 migration patterns, and may otherwise degrade and diminish the renewable resources 12 of the state; 13 (2) the exact nature and extent of oil pollution can be neither 14 documented with certainty nor precisely quantified on a spill-by-spill basis; however,
01 in light of the magnitude of harm that [WHICH] may be caused by oil discharges, and 02 the vital importance of commercial, sport, and subsistence fishing, tourism, and the 03 state's natural abundance and beauty to the economic future of the state and its quality 04 of life, it is the judgment of the legislature that substantial civil penalties should be 05 imposed for the discharge of oil in order to provide a meaningful incentive for the safe 06 handling of oil and to ensure [INSURE] that the public does not bear substantial 07 losses from oil pollution for which, because of its subtle, long-term, or unquantifiable 08 nature, compensation would not otherwise be received; and 09 (3) the handling of oil in large quantities is a hazardous undertaking 10 that poses a significant threat to the economy and environment of the state, which can 11 be substantially reduced only by the taking of rigorous safety precautions involving 12 considerable expense; conversely, persons handling oil in smaller amounts pose a 13 correspondingly lower risk to the economy and environment of the state, and are 14 capable of safe oil handling practices at correspondingly lower costs; in order to 15 provide an incentive that is effective, [BUT NOT PUNITIVE,] it is necessary and 16 appropriate that the assessment of [CIVIL] penalties for discharges of small quantities 17 of oil be left for case-by-case [JUDICIAL] determination, while ensuring, through the 18 penalty provisions of this section, that the handling of oil in large quantities occurs in 19 a manner that will not impair the renewable resources of the state. 20 * Sec. 2. AS 46.03.758(b) is amended to read: 21 (b) The [NO LATER THAN THE 10TH DAY AFTER THE CONVENING 22 OF THE SECOND SESSION OF THE TENTH ALASKA LEGISLATURE, THE] 23 department shall establish in [SUBMIT TO THE LEGISLATURE] regulations 24 [ESTABLISHING] the following schedule of fixed penalties for discharges of oil: 25 (1) subject to (2) of this subsection, the penalties for the following 26 categories of receiving environments may not exceed 27 (A) $20 [$10] per gallon of oil that [WHICH] enters an 28 anadromous stream or other freshwater environment with significant aquatic 29 resources; 30 (B) $5 [$2.50] per gallon of oil that [WHICH] enters an 31 estuarine, intertidal or confined saltwater environment; and
01 (C) $2 [$1] per gallon of oil that [WHICH] enters an 02 unconfined saltwater environment, public land or freshwater environment 03 without significant aquatic resources; 04 (2) for discharges of oil that are caused by the gross negligence or 05 intentional act of the discharger, or when the court finds that the discharger did not 06 take reasonable measures to contain and clean up the discharged oil, the penalty shall 07 be determined by multiplying the penalty established under (1) of this subsection by a 08 factor of five. 09 * Sec. 3. AS 46.03.758 is amended by adding a new subsection to read: 10 (m) The department shall annually increase the amounts of the civil penalties 11 authorized in (b) of this section by a percentage equal to the percentage of increase in 12 all items of the Consumer Price Index for all urban consumers for Anchorage, Alaska. 13 The index for January of 2018 is the reference base index. 14 * Sec. 4. AS 46.03.759(a) is amended to read: 15 (a) A person who is found to be liable under any other state law for an 16 unpermitted discharge of crude oil in excess of 18,000 gallons is, in addition to 17 liability for any other penalties or for damages or the cost of containment and cleanup, 18 liable to the state in a civil action for a civil penalty, up to a maximum of 19 $500,000,000, in the amount of 20 (1) $16 [$8] per gallon of crude oil discharged for the first 420,000 21 gallons discharged; and 22 (2) $25 [$12.50] per gallon of crude oil discharged for amounts 23 discharged in excess of 420,000 gallons. 24 * Sec. 5. AS 46.03.759 is amended by adding new subsections to read: 25 (h) For the purpose of determining the volume of discharged crude oil under 26 this section, the department shall include the produced water, if any, that was mixed 27 with the discharged crude oil at the time of the discharge. 28 (i) The department shall annually increase the amounts of the civil penalties 29 authorized in (a) of this section by a percentage equal to the percentage of increase in 30 all items of the Consumer Price Index for all urban consumers for Anchorage, Alaska. 31 The index for January of 2018 is the reference base index.
01 * Sec. 6. AS 46.03.760(a) is amended to read: 02 (a) A person who violates or causes or permits to be violated a provision of 03 this chapter other than AS 46.03.250 - 46.03.313, or a provision of AS 46.04 or 04 AS 46.09, or a regulation, a lawful order of the department, or a permit, approval, or 05 acceptance, or term or condition of a permit, approval, or acceptance issued under this 06 chapter or AS 46.04 or AS 46.09 is liable, in a civil action, to the state for a sum to be 07 assessed by the court of not less than $1,000 [$500] nor more than $200,000 08 [$100,000] for the initial violation, nor more than $25,000 [$5,000] for each day after 09 that on which the violation continues, and that shall reflect, when applicable, 10 (1) reasonable compensation in the nature of liquidated damages for 11 any adverse environmental effects caused by the violation, which shall be determined 12 by the court according to the toxicity, degradability, and dispersal characteristics of 13 the substance discharged, the sensitivity of the receiving environment, and the degree 14 to which the discharge degrades existing environmental quality; 15 (2) reasonable costs incurred by the state in detection, investigation, 16 and attempted correction of the violation; 17 (3) the economic savings realized by the person in not complying with 18 the requirement for which a violation is charged; and 19 (4) the need for an enhanced civil penalty to deter future 20 noncompliance. 21 * Sec. 7. AS 46.03.760(d) is amended to read: 22 (d) In addition to liability under (a) and (c) [(a) - (c)] of this section, a person 23 who violates or causes or permits to be violated a provision of AS 46.03.740 - 24 46.03.750 is liable to the state, in a civil action brought under AS 46.03.822, for the 25 full amount of actual damages caused to the state by the violation, including 26 (1) direct and indirect costs associated with the abatement, 27 containment, or removal of the pollutant; 28 (2) restoration of the environment to its former state; 29 (3) amounts paid as grants under AS 29.60.510 - 29.60.599 and as 30 emergency first response advances and reimbursements under AS 46.08.070(c); and 31 (4) all incidental administrative costs.
01 * Sec. 8. AS 46.03.760(e) is amended to read: 02 (e) A person who violates or causes or permits to be violated a provision of 03 AS 46.03.250 - 46.03.313, 46.03.460 - 46.03.475, AS 46.14, or a regulation, a lawful 04 order of the department, or a permit, approval, or acceptance, or term or condition of a 05 permit, approval, or acceptance issued under AS 46.03.250 - 46.03.313, 46.03.460 - 06 46.03.475, AS 46.14, or under the program authorized by AS 46.03.020(12), is liable, 07 in a civil action, to the state for a sum to be assessed by the court of not less than 08 $1,000 [$500] nor more than $200,000 [$100,000] for the initial violation, nor more 09 than $25,000 [$10,000] for each day after that on which the violation continues, and 10 that shall reflect, when applicable, 11 (1) reasonable compensation in the nature of liquidated damages for 12 any adverse environmental effects caused by the violation, that shall be determined by 13 the court according to the toxicity, degradability and dispersal characteristics of the 14 substance discharged, the sensitivity of the receiving environment, and the degree to 15 which the discharge degrades existing environmental quality; for a violation relating to 16 AS 46.14, the court, in making its determination under this paragraph, shall also 17 consider the degree to which the discharge causes harm to persons or property; for a 18 violation of AS 46.03.463, the court, in making its determination under this paragraph, 19 shall also consider the volume of the graywater, sewage, or other wastewater 20 discharged; this paragraph may not be construed to limit the right of parties other than 21 the state to recover for personal injuries or damage to their property; 22 (2) reasonable costs incurred by the state in detection, investigation, 23 and attempted correction of the violation; 24 (3) the economic savings realized by the person in not complying with 25 the requirement for which a violation is charged; and 26 (4) the need for an enhanced civil penalty to deter future 27 noncompliance. 28 * Sec. 9. AS 46.03.760(f) is amended to read: 29 (f) An owner, agent, employee, or operator of a commercial passenger vessel, 30 as defined in AS 43.52.295, who falsifies a registration or report required by 31 AS 46.03.460 or 46.03.475 or who violates or causes or permits to be violated a
01 provision of AS 46.03.250 - 46.03.314, 46.03.460 - 46.03.490, AS 46.14, or a 02 regulation, a lawful order of the department, or a permit, approval, or acceptance, or 03 term or condition of a permit, approval, or acceptance issued under AS 46.03.250 - 04 46.03.314, 46.03.460 - 46.03.490, or AS 46.14 is liable, in a civil action, to the state 05 for a sum to be assessed by the court of not less than $10,000 [$5,000] nor more than 06 $200,000 [$100,000] for the initial violation, nor more than $25,000 [$10,000] for 07 each day after that on which the violation continues, and that shall reflect, when 08 applicable, 09 (1) reasonable compensation in the nature of liquidated damages for 10 any adverse environmental effects caused by the violation, that shall be determined by 11 the court according to the toxicity, degradability, and dispersal characteristics of the 12 substance discharged, the sensitivity of the receiving environment, and the degree to 13 which the discharge degrades existing environmental quality; for a violation relating to 14 AS 46.14, the court, in making its determination under this paragraph, shall also 15 consider the degree to which the discharge causes harm to persons or property; this 16 paragraph may not be construed to limit the right of parties other than the state to 17 recover for personal injuries or damage to their property; 18 (2) reasonable costs incurred by the state in detection, investigation, 19 and attempted correction of the violation; 20 (3) the economic savings realized by the person in not complying with 21 the requirement for which a violation is charged; and 22 (4) the need for an enhanced civil penalty to deter future 23 noncompliance. 24 * Sec. 10. AS 46.03.760(g) is amended to read: 25 (g) As used in this section, "economic savings" means the economic benefit 26 of noncompliance [THAT SUM WHICH A PERSON WOULD BE REQUIRED TO 27 EXPEND FOR THE PLANNING, ACQUISITION, SITING, CONSTRUCTION, 28 INSTALLATION AND OPERATION OF FACILITIES NECESSARY TO EFFECT 29 COMPLIANCE] with the standard violated. When determining an "economic 30 savings," the court may consider 31 (1) deferred and avoided costs of compliance with the standard
01 violated; 02 (2) a competitive advantage gained by noncompliance with the 03 standard violated; and 04 (3) income derived as a result of noncompliance with the standard 05 violated from operations that were not authorized or permitted. 06 * Sec. 11. AS 46.03.760 is amended by adding new subsections to read: 07 (h) When assessing the need for an enhanced civil penalty to deter future 08 noncompliance under this section, the court may take into consideration 09 (1) the seriousness of the violation; 10 (2) the degree of culpability of the person; 11 (3) the history of previous violations of the person; 12 (4) other penalties assessed for the same violation; 13 (5) good faith efforts made by the person to comply with applicable 14 requirements and to minimize or mitigate the effects of the violations; 15 (6) the economic effect of the violation on the person; and 16 (7) other factors as justice may require. 17 (i) The department shall annually increase the daily civil penalty caps in (a), 18 (e), and (f) of this section by a percentage equal to the percentage of increase in all 19 items of the Consumer Price Index for all urban consumers for Anchorage, Alaska. 20 The index for January of 2018 is the reference base index. 21 * Sec. 12. AS 46.03 is amended by adding a new section to read: 22 Sec. 46.03.762. Administrative penalties for discharges of oil and crude oil. 23 (a) In addition to the actions available under AS 46.03.758 - 46.03.760, the department 24 may assess an administrative penalty against a person who causes or permits a serious 25 discharge or repeat discharges of oil not permitted under applicable state or federal 26 law. 27 (b) An administrative penalty assessed under this section may not be less than 28 $1,000 nor more than $10,000 for the initial violation, and may not exceed $24 a 29 gallon of oil discharged. When assessing a penalty under this section, the department 30 shall consider 31 (1) the effect of the discharge on the public health or the environment;
01 (2) reasonable costs incurred by the state in the detection, 02 investigation, and attempted correction of the discharge; 03 (3) any previous history of compliance or noncompliance by the 04 person with this chapter, AS 46.04, AS 46.09, and AS 46.14; 05 (4) the need to deter future discharges; and 06 (5) the extent and seriousness of the discharge, including the potential 07 for the discharge to threaten public health or the environment. 08 (c) If a person fails to pay an administrative penalty assessed under this 09 section, the department may bring an action to collect the penalty. The amount of the 10 penalty is not subject to review by the court in an action to collect the penalty 11 described in this section. 12 (d) In a collection action under (c) of this section, the court shall award the 13 prevailing party full reasonable attorney fees and costs incurred in the collection 14 action. 15 (e) Action under this section by the department does not limit or otherwise 16 affect the authority of the department to otherwise enforce this chapter, AS 46.04, 17 AS 46.08, AS 46.09, AS 46.14, or regulations adopted under those statutes, or to 18 recover damages, restoration expenses, investigation costs, court costs, attorney fees, 19 or other necessary expenses. The court shall set off against a judicial civil assessment 20 subsequently awarded under AS 46.03.758, 46.03.759, or 46.03.760 an amount 21 ordered to be paid under this section by the same person for the same discharge. 22 (f) For the purpose of determining the volume of discharged oil under this 23 section, the department shall include the produced water, if any, that was mixed with 24 the discharged oil at the time of the discharge. 25 (g) The department shall annually increase the amounts of the administrative 26 penalties authorized in (b) of this section by a percentage equal to the percentage of 27 increase in all items of the Consumer Price Index for all urban consumers for 28 Anchorage, Alaska. The index for January of 2018 is the reference base index. 29 (h) In this section, 30 (1) "discharge" means entry of oil into or on the water or public land of 31 the state, regardless of causation, except discharges into an enclosed and impervious
01 oil spill containment area; 02 (2) "oil" means crude oil, petroleum, and any substance refined from 03 petroleum. 04 * Sec. 13. AS 46.04.030(d) is amended to read: 05 (d) Upon approval of a contingency plan, the department shall issue to the 06 plan holder a certificate stating that the contingency plan has been approved by the 07 department. The certificate must include the name of the facility, pipeline, tank vessel, 08 commercial motor vehicle, or oil barge for which it is issued, the effective date of the 09 contingency plan, and the date by which the contingency plan must be submitted for 10 renewal. A contingency plan must be submitted for renewal every five years. 11 * Sec. 14. AS 46.04.030(e) is amended to read: 12 (e) The department may attach reasonable terms and conditions to its approval 13 or modification of a contingency plan that the department determines are necessary to 14 ensure that the applicant for a contingency plan has access to sufficient resources to 15 protect environmentally sensitive areas and to contain, clean up, and mitigate potential 16 oil discharges from the facility, commercial motor vehicle, or vessel as provided in 17 (k) of this section, and to ensure that the applicant complies with the contingency plan. 18 If a contingency plan submitted to the department for approval relies on the services of 19 an oil spill primary response action contractor, the department may not approve the 20 contingency plan unless the primary response action contractor is registered and 21 approved under AS 46.04.035. The contingency plan must provide for the use by the 22 applicant of the best technology that was available at the time the contingency plan 23 was submitted or renewed. The department shall identify the prevention and response 24 technologies that are subject to a best available technology determination. The 25 department may find that any technology meeting the response planning standards in 26 (k) of this section or a prevention performance standard established under 27 AS 46.04.070 is the best available technology. The department may prepare findings 28 and maintain a list of those technologies that are considered the best available. The 29 department may require an applicant or holder of an approved contingency plan to 30 take steps necessary to demonstrate the applicant's or holder's ability to carry out the 31 contingency plan, including
01 (1) periodic training; 02 (2) response team exercises; and 03 (3) verifying access to inventories of equipment, supplies, and 04 personnel identified as available in the approved contingency plan. 05 * Sec. 15. AS 46.04.030(f) is amended to read: 06 (f) Upon request of a plan holder or on the department's own initiative, the 07 department, after notice and opportunity for hearing, may modify its approval of a 08 contingency plan if the department determines that a change has occurred in the 09 operation of a facility, commercial motor vehicle, or vessel necessitating an amended 10 or supplemented plan, or the operator's discharge experience demonstrates a necessity 11 for modification. The department, after notice and opportunity for hearing, may 12 revoke its approval of a contingency plan if the department determines that 13 (1) approval was obtained by fraud or misrepresentation; 14 (2) the operator does not have access to the quality or quantity of 15 resources identified in the plan; 16 (3) a term or condition of approval or modification has been violated; 17 or 18 (4) the person is not in compliance with the contingency plan and the 19 deficiency materially affects the plan holder's response capability. 20 * Sec. 16. AS 46.04.030(k) is amended to read: 21 (k) Except as provided in (m) and (o) of this section, the holder of an approved 22 contingency plan required under this section shall maintain, or have available under 23 contract, in its region of operation or in another region of operation approved by the 24 department, singly or in conjunction with other operators, sufficient oil discharge 25 containment, storage, transfer, and cleanup equipment, personnel, and resources to 26 meet the following response planning standards: 27 (1) for a discharge from an oil terminal facility, the plan holder shall 28 plan to be able to contain or control, and clean up a discharge equal to the capacity of 29 the largest oil storage tank at the facility within 72 hours, except that if the department 30 determines that the facility is located in an area of high risk because of natural or man- 31 made conditions outside of the facility, it may increase the volume requirement under
01 this paragraph so that the contingency plan must be designed for a response that is 02 greater in amount than the capacity of the largest oil storage tank at the facility; 03 (2) for a discharge from an exploration or production facility or a 04 pipeline, the plan holder shall plan to be able to contain or control, and clean up the 05 realistic maximum oil discharge within 72 hours; 06 (3) for a discharge of crude oil from a tank vessel or oil barge, the plan 07 holder shall plan to be able to contain or control, and clean up a realistic maximum oil 08 discharge as provided in (A), (B), and (C) of this paragraph: 09 (A) for tank vessels and oil barges having a cargo volume of 10 less than 500,000 barrels, the plan holder shall maintain at a minimum in the 11 region of operation, equipment, personnel, and other resources sufficient to 12 contain or control, and clean up a 50,000 barrel discharge within 72 hours; 13 (B) for tank vessels and oil barges having a cargo volume of 14 500,000 barrels or more, the plan holder shall maintain at a minimum in its 15 region of operation, equipment, personnel, and other resources sufficient to 16 contain or control, and clean up a 300,000 barrel discharge within 72 hours; 17 (C) in addition to the minimum equipment, personnel, and 18 other resources required to be maintained within the region of operation by (A) 19 or (B) of this paragraph, a plan holder shall maintain, either within or outside 20 of the plan holder's region of operation, additional equipment, personnel, and 21 other resources sufficient to contain or control, and clean up a realistic 22 maximum discharge within the shortest possible time; the plan holder must 23 demonstrate that the equipment, personnel, and other resources maintained 24 outside the plan holder's region of operation are accessible to the plan holder 25 and will be deployed and operating at the discharge site within 72 hours; 26 (4) for a discharge from a tank vessel or oil barge carrying noncrude 27 oil in bulk as cargo, the plan holder shall plan to be able to contain or control 15 28 percent of the maximum capacity of the vessel or barge or the realistic maximum oil 29 discharge, whichever is greater, within 48 hours and clean up the discharge within the 30 shortest possible time consistent with minimizing damage to the environment; 31 (5) for a discharge subject to the provisions of (1) - (3) of this
01 subsection that enters a receiving environment other than open water, the time 02 requirement for clean up of the portion of the discharge that enters the receiving 03 environment may, in the department's discretion, be within the shortest possible time 04 consistent with minimizing damage to the environment; 05 (6) for a discharge from a commercial motor vehicle, the plan 06 holder shall plan to be able to contain or control, and clean up a discharge equal 07 to the capacity of the largest oil storage compartment of the vehicle or the 08 realistic maximum oil discharge, whichever is greater, within 48 hours. 09 * Sec. 17. AS 46.04.030(r) is amended by adding a new paragraph to read: 10 (5) "commercial motor vehicle" means a motor vehicle primarily used 11 for the commercial transportation of crude oil. 12 * Sec. 18. AS 46.04.030 is amended by adding a new subsection to read: 13 (s) A person may not operate a commercial motor vehicle transporting crude 14 oil on a highway or road maintained by the state, unless the department has approved 15 an oil discharge prevention and contingency plan for the commercial motor vehicle 16 and the person is in compliance with the plan. 17 * Sec. 19. AS 46.03.758(c) and 46.03.760(b) are repealed. 18 * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 TRANSITION: REGULATIONS. The Department of Environmental Conservation 21 may adopt regulations necessary to implement the changes made by this Act. The regulations 22 take effect under AS 44.62 (Administrative Procedure Act), but not before January 1, 2019. 23 * Sec. 21. Section 20 of this Act takes effect immediately under AS 01.10.070(c). 24 * Sec. 22. Except as provided in sec. 21 of this Act, this Act takes effect January 1, 2019.