HB 367-NATIVE CORP. LIABILITY FOR CONTAMINATION  2:08:37 PM CO-CHAIR JOSEPHSON announced that the final order of business would be HOUSE BILL NO. 367, "An Act relating to the liability of a Native corporation for the release or threatened release of hazardous substances present on certain lands." 2:08:40 PM REPRESENTATIVE CHARISSE MILLETT, sponsor, explained HB 367 would remove from Alaska Native corporations the liability for land conveyed to them under the provisions of the Alaska Native Claims Settlement Act (ANCSA). In 1971, nearly 44 million acres of land began being conveyed to 12 Native corporations; much of the selected lands were in proximity to Tribal and village land. As an aside, Representative Millett disclosed she is a Doyon Limited shareholder. She returned to the bill and explained subsequent to conveyance, it was found some of the land had been contaminated, much of it during the '50s, '60s, and '70s when military scientific research and government nuclear testing were conducted in Alaska. Further, radar installations were established throughout the state prior to regulation by the U.S. Environmental Protection Agency (EPA) and the Department of Environmental Conservation (DEC). As the Native corporations sought to develop their lands, the contamination was identified. Representative Millett said HB 367 directs if the conveyed (contaminated) land was not contaminated by the present landowner, but by the federal government, the Native corporation would be held harmless. She reminded the committee the same issue was raised by previous legislation [HJR 29, passed in the Twenty-Seventh Alaska State Legislature and HJR 6, passed in the Twenty-Eight Alaska State Legislature] related to 137 legacy wells, which were contaminated by military and\or private testing; in the case of the legacy wells, "the federal government now has been, taken ownership of the contamination and now has cleaned them up ... [except] for 23." Although all seek to clean up the lands, she said the Alaska Native corporations should not suffer; in fact, a small corporation would be depleted if held liable for the cost of complying with state and federal regulations. She concluded ANCSA was a wonderful idea, however, now that the lands are conveyed, Native corporations are not able to assume the ownership of the land and the liability for its restoration. 2:14:01 PM HANS RODVIK, Staff, Representative Charisse Millett, Alaska State Legislature, on behalf of Representative Millett, sponsor of HB 367, paraphrased from the sectional analysis as follows [original punctuation provided]: Section 1: Amends AS 46.03.822(a) to reference creation of new subsection N Section 2: Amends AS 46.03.822(m), by including a new definition of Native corporation, as given in Unites States federal law Section 3: Adds a new subsection (subsection N) to AS 46.03.822, which removes Alaska Native corporations from liability from damages or costs related to release or threatened release of hazardous substances on their land, if that land was already contaminated when it was transferred to them under the Alaska Native Claims Settlement Act (ANSCA) Section 4: Repeals AS 46.03.822(c)(3), which was an insufficient attempt at properly absolving Alaska Native corporations from liability to damages or costs concerning contaminated lands they were transferred under ANSCA CO-CHAIR JOSEPHSON asked whether there is a legal distinction if a Native corporation selected lands after December 1971, knowing the land was contaminated. REPRESENTATIVE MILLETT advised at the time of conveyance, many Native corporations relied on Bureau of Land Management (BLM), U.S. Department of the Interior (DOI), surveys that did not reveal contamination. The contamination of lands yet to be conveyed was discovered in the '90s, thus some of the conveyances are "on hold," pending an understanding of the liability issues. CO-CHAIR JOSEPHSON questioned whether HB 367 would apply to spills not by the federal government, such as those by a contractor. REPRESENTATIVE MILLETT said the bill relates to any contamination of the land, and provided examples of contaminants found. MR. RODVIK added the [former] landowner responsible for the largest number of sites - over 162 sites - is the U.S. Department of Defense (DoD), a fact which was confirmed by DEC in 2015. CO-CHAIR JOSEPHSON asked for the role of Congress in this matter. REPRESENTATIVE MILLETT reminded the committee through the aforementioned legacy well legislation, Alaska asked Congress for recognition of the issue and for restoration funding, which was partially accomplished by U.S. Senator Lisa Murkowski by a $50 million rider attached to the [Fiscal year 2017 Interior and Environment Appropriations Bill]. Although more funds are needed, Native corporations continue to petition federal agencies for [remediation funding]. 2:20:03 PM REPRESENTATIVE BIRCH asked whether there is a potential for Native corporations to return or exchange lands that have a high level of contamination, through the "over-selection" provision of ANCSA. REPRESENTATIVE MILLETT advised some transfers have been stopped; she acknowledged there was a large amount of over-selection [land] for some of these same reasons. She deferred to Mr. Rodvik. MR. RODVIK was unsure whether corporations could return contaminated land; federal "land swaps" with the state do occur, although he did not know what terms would be acceptable to Native corporations. REPRESENTATIVE JOHNSON recalled this issue has been discussed around the state; in fact, near Nome there is radioactive waste. She encouraged Representative Millett to add support from local governments to the bill. REPRESENTATIVE MILLETT agreed to continue seeking letters of support; she stated the potential financial impact to the Kuskokwim Corporation - if it were forced to assume responsibility for cleaning up contamination - after it "received the land in good faith." 2:24:17 PM CO-CHAIR JOSEPHSON directed attention to a document, included in the committee packet, provided by the Alaska Native Village Corporation Association entitled, "ANCSA CONTAMINATED LAND" dated September 2016, and a document provided by DEC entitled, "Brownfields Resources for ANCSA Contaminated Lands," dated 10/16/16. REPRESENTATIVE JOHNSON expressed her support for the bill. 2:25:06 PM REPRESENTATIVE LINCOLN said the ultimate remedy is to correct a historical injustice against - not just Alaska Native corporations (ANCs) - but against everyone in the state. He urged for a unified approach from all Alaskans, state government, ANCs, and village corporations to advocate for the bill in one voice. He restated liability is an existential threat to ANCs and prevents accurate reporting of known sites to DEC. Representative Lincoln directed attention to DEC's first three recommendations for action: establish an exchange of information between ANCSA landowners and federal, state, local, and Tribal agencies; compile a coordinated and comprehensive inventory of contaminated sites, as directed by HB 367; work at the federal level. REPRESENTATIVE MILLETT acknowledged not all the contaminated land in Alaska is owned by Native corporations; her research revealed beginning in the '30s, '40s, and '50s military and scientific testing occurred on what was considered inhabitable land, especially from the Alaska Peninsula to the Aleutian Islands. Further, discussion of the situation in Alaska has raised awareness of testing in other Western states, although not to be compared to the testing that was done in Alaska prior to statehood. She further agreed that a unified voice is important and that in order for Native corporations to be successful, they must be able to develop their assets. REPRESENTATIVE RAUSCHER asked whether the lands in question have to be "preidentified." REPRESENTATIVE MILLETT explained HB 367 affects conveyed and selected lands which are proven to have been contaminated prior to their transfer to a Native corporation. However, due to the fear of liability, some lands have not been completely surveyed and some lands are very remote. In fact, oil and gas exploration in remote areas has uncovered barrels of contaminated waste. REPRESENTATIVE JOHNSON inquired as to how many ANCs have attempted to address environmental assessments of their lands. REPRESENTATIVE MILLETT said land is owned by 12 Native Corporations, Tribal corporations, and village corporations, and over 1,000 sites have been identified, with varying degrees of contamination. Cleanup costs could range from hundreds of thousands of dollars to many millions of dollars; for example, remediation of one legacy well has cost over tens of millions of dollars. 2:32:59 PM MR. RODVIK advised more information on environmental assessments is forthcoming at a later hearing. REPRESENTATIVE MILLETT pointed out DOI is aware of the problem and commissioned a report in 1998 that contained action items, and which was updated in 2016; however, although DOI has accepted responsibility, work is needed to obtain federal funding and begin restoration. REPRESENTATIVE JOHNSON asked - subsequent to the passage of HB 367 - what the procedure to approach the federal government would be. REPRESENTATIVE MILLETT explained, in a manner similar to the legacy well legislation, she would work in partnership with the Alaska congressional delegation and with likeminded states. Unlike ANCSA lands, responsible parties for some of the legacy wells were unknown. 2:36:43 PM CURTIS MCQUEEN, Chief Executive Officer, Eklutna Inc., informed the committee Eklutna Inc. represents the first aboriginal people of Anchorage and the Eklutna Dena'ina of the Matanuska- Susitna Borough (Mat-Su Borough). He expressed his appreciation of lawmakers' support. Mr. McQueen said Eklutna relied on information it received prior to 1971 when it made its land selections; in fact, because many of Eklutna's aboriginal lands were already developed, Eklutna is still in the process of receiving its land. In the village of Eklutna, the corporation is in the process of removing a hydroelectric dam from the Eklutna River and restoring salmon habitat. He said Eklutna is very pro-development and is supportive of the military, although one of its contaminated sites is Camp Mohawk, which was a mobile [military] camp behind the Eklutna school between Cook Inlet and the village. The Tribal government of Eklutna has worked to clean up surface contamination from Camp Mohawk; however, polychlorinated biphenyl (PCB) and diesel fuel have leached into the silt bed and are reaching the mouth of the Eklutna River and Cook Inlet. He said this threatens previous work that has been done to restore king salmon in north Cook Inlet. Eklutna seeks balance, and partners with the Alaska military; part of its ANCSA land selection includes 17,000 acres of Joint Base Elmendorf-Richardson (JBER). In response to an earlier question, he said the lead agency seeking to identify and address the cleanup of contaminated lands in Alaska is the U.S. Army Corps of Engineers (USACE), which successfully cleans up sites when funded. As a Formerly Used Defense Site (FUD site), Eklutna is now five years into research of the site, and a plan for cleanup should be complete within two more years. He said the cleanup cost predictions are "well into the millions, maybe tens of millions, just to clean up our site, alone." He noted the Alaska congressional delegation continues to search for future funding for USACE, and he urged for a joint resolution in support of all of the federal agencies that are responsible for restoration. Further, he advised Eklutna has sites that were not contaminated by the military, such as land in the Mat-Su Borough that was contaminated by railroad construction in the '30s and '40s, and was cleaned up by the joint efforts of Eklutna, the borough, and the state. From Eklutna's perspective, DEC has not forced village corporations to restore their land, which would bankrupt many of the 179 small village corporations; however, he cautioned this policy could be altered after a change of administration, and HB 367 would protect ANCSA landowners as they search for funding. Mr. McQueen concluded the current federal administration, the state administration, village corporations, and ANCs are pro-development, but at the same time need to address contaminated lands. 2:43:53 PM REPRESENTATIVE BIRCH directed attention to a document provided in the committee packet entitled, "Alaska Native Village Corporation Association House Resources Committee," on the page entitled, "2018 State Priorities," and praised priority "4. Support the Stand For Alaska [campaign]." He then directed attention to the page entitled, "2018 Federal Legislative Priorities," priority "5. Swap ANCSA contaminated lands with federal government," and asked whether swapping contaminated land with the federal government is a realistic option. MR. MCQUEEN expressed his belief ANCs and village corporations do not have the aforementioned option; he pointed out Eklutna has been waiting for 45 years for its 67,000 acres in the Knik River watershed - although some land may be conveyed by 2019 - that is clean and beautiful land. He explained the conveyance process is slowed by many interest groups, bureaucracy, and the lack of land; however, Eklutna would be interested in swapping land. REPRESENTATIVE PARISH asked whether the aforementioned land in JBER has been granted to Eklutna. MR. MCQUEEN explained Eklutna is part of the North Anchorage Land Agreement and is owed approximately 17,000 acres within JBER, and the Municipality of Anchorage is owed approximately 15,000 acres. In the '80s, parties agreed not to pursue legal action; recently, he recalled, "part of JBER might have shrunk, by the army shrinking the base," thus the shareholders of Eklutna view the JBER land as a future conveyance, and do not seek JBER land at this time due to its importance to the military. REPRESENTATIVE PARISH directed attention to the bill beginning on page 2, line 27, and continuing to page 3, line 1 which read: (n) In an action to recover damages or costs, a Native corporation otherwise liable under this section is relieved from liability under this section if the Native corporation proves that the release or threatened release of the hazardous substance to which the damages relate occurred on land granted to the Native corporation under 43 30 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) and the hazardous substance was present on the land at the time the land was granted. REPRESENTATIVE PARISH gave an example of a serious spill occurring tomorrow on Eklutna's acreage at JBER and asked whether Eklutna would be held liable. MR. MCQUEEN said the North Anchorage Land Agreement identifies Eklutna land as a section located near Eagle River and the Anchorage landfill, which may be received by Eklutna incrementally, - as the base shrinks - and was conveyed in 1971. Eklutna is not aware of any present contamination, thus Eklutna will not know the condition of the land "until we get it." 2:50:50 PM HALLIE BISSETT, Executive Director, Alaska Native Village Corporation Association (ANVCA), informed the committee ANVCA members represent about 176 village corporations that reside within 12 land-based regional Native corporations created by ANCSA. Since 2012, ANVCA has been working on the issue of contaminated lands, and she acknowledged the support of Representative Millett and others. She pointed out HB 367 is a real solution that would shield village corporations from liability, so they may continue to gather the inventory of contaminated sites in Alaska, which has heretofore been prevented due to the state's ability to assign liability when contaminated sites are reported by villages. In addition, HB 367 would allow village corporations - once they are free from legal designation as the responsible party - to apply for additional funds at the federal level for cleanup, such as those from the Brownsfields Grant Program. In response to an earlier question, she said ANVCA seeks to return land to productive use, and to provide technical training to villagers for jobs related to environmental restoration work: HB 367 would provide many benefits to rural Alaska. In response to Representative Birch, she noted one of ANVCA's priorities is to swap land with the federal government in the future, which is not currently an option. Further, ANVCA will continue to seek appropriations from the federal government, and guidance from the legislature and DEC. She acknowledged past state support for related joint resolutions, and legislators' present swift response to HB 367. 2:55:28 PM CO-CHAIR JOSEPHSON questioned whether Congress needs to pass an amendment to the Comprehensive Environmental Response Compensation, and Liability Act (CERCLA). MS. BISSETT said yes. U.S. Senator Dan Sullivan's amendment to CERCLA was adopted in the U.S. Senate version; the U.S. House bill passed without the desired language that provides a shield from liability. REPRESENTATIVE LINCOLN asked whether ANVCA would be eligible for additional funding subsequent to the passage of HB 367, or if federal action is needed. MS. BISSETT said both the state and federal shields from liability are needed. [HB 367 was held over.]