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CSHB 322(RES): "An Act relating to penalties for discharges of oil and other pollution violations; relating to oil spill response plans for commercial motor vehicles transporting crude oil; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 322(RES)                                                                    
01 "An Act relating to penalties for discharges of oil and other pollution violations; relating                            
02 to oil spill response plans for commercial motor vehicles transporting crude oil; and                                   
03 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 $500 nor more than $10,000 for each violation. When assessing a penalty under this                                      
29       section, the department shall consider                                                                            
30                 (1)  the effect of the discharge on the public health or the environment;                               
31 (2)  reasonable costs incurred by the state in the detection,                                                           
01       investigation, and attempted correction of the discharge;                                                         
02                 (3)  any previous history of compliance or noncompliance by the                                         
03       person with this chapter, AS 46.04, AS 46.09, and AS 46.14;                                                       
04                 (4)  the need to deter future discharges; and                                                           
05                 (5)  the volume, extent, and seriousness of the discharge, including the                                
06       potential for the discharge to threaten public health or the environment.                                         
07 (c)  If a person fails to pay an administrative penalty assessed under this                                             
08 section, the department may bring an action to collect the penalty. The amount of the                                   
09 penalty is not subject to review by the court in an action to collect the penalty                                       
10       described in this section.                                                                                        
11 (d)  In a collection action under (c) of this section, the court shall award the                                        
12 prevailing party full reasonable attorney fees and costs incurred in the collection                                     
13       action.                                                                                                           
14 (e)  Action under this section by the department does not limit or otherwise                                            
15 affect the authority of the department to otherwise enforce this chapter, AS 46.04,                                     
16 AS 46.08, AS 46.09, AS 46.14, or regulations adopted under those statutes, or to                                        
17 recover damages, restoration expenses, investigation costs, court costs, attorney fees,                                 
18 or other necessary expenses. The court shall set off against a judicial civil assessment                                
19 subsequently awarded under AS 46.03.758, 46.03.759, or 46.03.760 an amount                                              
20       ordered to be paid under this section by the same person for the same discharge.                                  
21 (f)  For the purpose of determining the volume of discharged oil under this                                             
22 section, the department shall include the produced water, if any, that was mixed with                                   
23       the discharged oil at the time of the discharge.                                                                  
24 (g)  The department shall annually increase the amounts of the administrative                                           
25 penalties authorized in (b) of this section by a percentage equal to the percentage of                                  
26 increase in all items of the Consumer Price Index for all urban consumers for                                           
27       Anchorage, Alaska. The index for January of 2018 is the reference base index.                                     
28            (h)  In this section,                                                                                        
29 (1)  "discharge" means entry of oil into or on the water or public land of                                              
30 the state, regardless of causation, except discharges into an enclosed and impervious                                   
31       oil spill containment area;                                                                                       
01                 (2)  "oil" means crude oil, petroleum, and any substance refined from                                   
02       petroleum.                                                                                                        
03    * Sec. 13. AS 46.04 is amended by adding a new section to read:                                                    
04 Sec. 46.04.057. Oil spill response plans for commercial motor vehicles. (a)                                           
05 If a person is required to submit an oil spill response plan under federal law, the                                     
06 person may not operate a commercial motor vehicle transporting crude oil on a                                           
07 highway or road maintained by the state unless the person has submitted to the                                          
08 department, and the department has received, the oil spill response plan required under                                 
09       federal law.                                                                                                      
10 (b)  Failure of a holder of a response plan submitted to the department under                                           
11 this section to comply with the plan or to have access to the quality or quantity of                                    
12 resources identified in the plan or to respond with those resources within the shortest                                 
13 possible time in the event of a spill is a violation of this chapter for purposes of                                    
14 AS 46.03.760(a), 46.03.765, 46.03.790, and any other applicable law. If the holder of                                   
15 a response plan submitted to the department under this section fails to respond to and                                  
16 conduct cleanup operations of an unpermitted discharge of crude oil with the quality                                    
17 and quantity of resources identified in the plan and in a manner required under the                                     
18 plan, the holder is strictly liable, jointly and severally, for the civil penalty assessed                              
19 under AS 46.03.758, 46.03.759, or 46.03.760 against any other person for that                                           
20       discharge.                                                                                                        
21 (c)  In this section, "commercial motor vehicle" has the meaning given in                                               
22       AS 19.10.399.                                                                                                     
23    * Sec. 14. AS 46.03.758(c) and 46.03.760(b) are repealed.                                                          
24    * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to                         
25 read:                                                                                                                   
26 TRANSITION: REGULATIONS. The Department of Environmental Conservation                                                   
27 may adopt regulations necessary to implement the changes made by this Act. The regulations                              
28 take effect under AS 44.62 (Administrative Procedure Act), but not before January 1, 2019.                              
29    * Sec. 16. Section 15 of this Act takes effect immediately under AS 01.10.070(c).                                  
30    * Sec. 17. Except as provided in sec. 16 of this Act, this Act takes effect January 1, 2019.