HB 33: "An Act relating to penalties for discharges of oil and other pollution violations; and providing for an effective date."
00 HOUSE BILL NO. 33 01 "An Act relating to penalties for discharges of oil and other pollution violations; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 46.03.758(a) is amended to read: 05 (a) The legislature finds that 06 (1) [RECENT INFORMATION DISCLOSES THAT] the discharge of 07 oil may cause significant short and long-term damage to the state's environment; even 08 minute quantities of oil released to the environment may cause high mortalities among 09 larval and juvenile forms of important commercial species, may affect salmon 10 migration patterns, and may otherwise degrade and diminish the renewable resources 11 of the state; 12 (2) the exact nature and extent of oil pollution can be neither 13 documented with certainty nor precisely quantified on a spill-by-spill basis; however, 14 in light of the magnitude of harm that [WHICH] may be caused by oil discharges, and
01 the vital importance of commercial, sport, and subsistence fishing, tourism, and the 02 state's natural abundance and beauty to the economic future of the state and its quality 03 of life, it is the judgment of the legislature that substantial civil penalties should be 04 imposed for the discharge of oil in order to provide a meaningful incentive for the safe 05 handling of oil and to ensure [INSURE] that the public does not bear substantial 06 losses from oil pollution for which, because of its subtle, long-term, or unquantifiable 07 nature, compensation would not otherwise be received; and 08 (3) the handling of oil in large quantities is a hazardous undertaking 09 that poses a significant threat to the economy and environment of the state, which can 10 be substantially reduced only by the taking of rigorous safety precautions involving 11 considerable expense; conversely, persons handling oil in smaller amounts pose a 12 correspondingly lower risk to the economy and environment of the state, and are 13 capable of safe oil handling practices at correspondingly lower costs; in order to 14 provide an incentive that is effective, [BUT NOT PUNITIVE,] it is necessary and 15 appropriate that the assessment of [CIVIL] penalties for discharges of small quantities 16 of oil be left for case-by-case [JUDICIAL] determination, while ensuring, through the 17 penalty provisions of this section, that the handling of oil in large quantities occurs in 18 a manner that will not impair the renewable resources of the state. 19 * Sec. 2. AS 46.03.758(b) is amended to read: 20 (b) The [NO LATER THAN THE 10TH DAY AFTER THE CONVENING 21 OF THE SECOND SESSION OF THE TENTH ALASKA LEGISLATURE, THE] 22 department shall establish in [SUBMIT TO THE LEGISLATURE] regulations 23 [ESTABLISHING] the following schedule of fixed penalties for discharges of oil: 24 (1) subject to (2) of this subsection, the penalties for the following 25 categories of receiving environments may not exceed 26 (A) $40 [$10] per gallon of oil that [WHICH] enters an 27 anadromous stream or other freshwater environment with significant aquatic 28 resources; 29 (B) $10 [$2.50] per gallon of oil that [WHICH] enters an 30 estuarine, intertidal or confined saltwater environment; and 31 (C) $4 [$1] per gallon of oil that [WHICH] enters an
01 unconfined saltwater environment, public land or freshwater environment 02 without significant aquatic resources; 03 (2) for discharges of oil that are caused by the gross negligence or 04 intentional act of the discharger, or when the court finds that the discharger did not 05 take reasonable measures to contain and clean up the discharged oil, the penalty shall 06 be determined by multiplying the penalty established under (1) of this subsection by a 07 factor of five. 08 * Sec. 3. AS 46.03.758 is amended by adding a new subsection to read: 09 (m) The department shall, every 10 years, increase the amounts of the civil 10 penalties authorized in (b) of this section by a percentage equal to the percentage of 11 increase in all items of the Consumer Price Index for all urban consumers for 12 Anchorage, Alaska. The index for January of 2021 is the reference base index. 13 * Sec. 4. AS 46.03.759(a) is amended to read: 14 (a) A person who is found to be liable under any other state law for an 15 unpermitted discharge of crude oil in excess of 18,000 gallons is, in addition to 16 liability for any other penalties or for damages or the cost of containment and cleanup, 17 liable to the state in a civil action for a civil penalty, up to a maximum of 18 $500,000,000, in the amount of 19 (1) $16 [$8] per gallon of crude oil discharged for the first 420,000 20 gallons discharged; and 21 (2) $25 [$12.50] per gallon of crude oil discharged for amounts 22 discharged in excess of 420,000 gallons. 23 * Sec. 5. AS 46.03.759 is amended by adding new subsections to read: 24 (h) For the purpose of determining the volume of discharged crude oil under 25 this section, the department shall include the produced water, if any, that was mixed 26 with the discharged crude oil at the time of the discharge. 27 (i) The department shall, every 10 years, increase the amounts of the civil 28 penalties authorized in (a) of this section by a percentage equal to the percentage of 29 increase in all items of the Consumer Price Index for all urban consumers for 30 Anchorage, Alaska. The index for January of 2021 is the reference base index. 31 * Sec. 6. AS 46.03.760(a) is amended to read:
01 (a) A person who violates or causes or permits to be violated a provision of 02 this chapter other than AS 46.03.250 - 46.03.313, or a provision of AS 46.04 or 03 AS 46.09, or a regulation, a lawful order of the department, or a permit, approval, or 04 acceptance, or term or condition of a permit, approval, or acceptance issued under this 05 chapter or AS 46.04 or AS 46.09 is liable, in a civil action, to the state for a sum to be 06 assessed by the court of not less than $2,000 [$500] nor more than $400,000 07 [$100,000] for the initial violation, nor more than $25,000 [$5,000] for each day after 08 that on which the violation continues, and that shall reflect, when applicable, 09 (1) reasonable compensation in the nature of liquidated damages for 10 any adverse environmental effects caused by the violation, which shall be determined 11 by the court according to the toxicity, degradability, and dispersal characteristics of 12 the substance discharged, the sensitivity of the receiving environment, and the degree 13 to which the discharge degrades existing environmental quality; 14 (2) reasonable costs incurred by the state in detection, investigation, 15 and attempted correction of the violation; 16 (3) the economic savings realized by the person in not complying with 17 the requirement for which a violation is charged; and 18 (4) the need for an enhanced civil penalty to deter future 19 noncompliance. 20 * Sec. 7. AS 46.03.760(d) is amended to read: 21 (d) In addition to liability under (a) and (c) [(a) - (c)] of this section, a person 22 who violates or causes or permits to be violated a provision of AS 46.03.740 - 23 46.03.750 is liable to the state, in a civil action brought under AS 46.03.822, for the 24 full amount of actual damages caused to the state by the violation, including 25 (1) direct and indirect costs associated with the abatement, 26 containment, or removal of the pollutant; 27 (2) restoration of the environment to its former state; 28 (3) amounts paid as grants under AS 29.60.510 - 29.60.599 and as 29 emergency first response advances and reimbursements under AS 46.08.070(c); and 30 (4) all incidental administrative costs. 31 * Sec. 8. AS 46.03.760(e) is amended to read:
01 (e) A person who violates or causes or permits to be violated a provision of 02 AS 46.03.250 - 46.03.313, 46.03.460 - 46.03.475, AS 46.14, or a regulation, a lawful 03 order of the department, or a permit, approval, or acceptance, or term or condition of a 04 permit, approval, or acceptance issued under AS 46.03.250 - 46.03.313, 46.03.460 - 05 46.03.475, AS 46.14, or under the program authorized by AS 46.03.020(12), is liable, 06 in a civil action, to the state for a sum to be assessed by the court of not less than 07 $1,000 [$500] nor more than $200,000 [$100,000] for the initial violation, nor more 08 than $25,000 [$10,000] for each day after that on which the violation continues, and 09 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, that shall be determined by 12 the court according to the toxicity, degradability and dispersal characteristics of the 13 substance discharged, the sensitivity of the receiving environment, and the degree to 14 which the discharge degrades existing environmental quality; for a violation relating to 15 AS 46.14, the court, in making its determination under this paragraph, shall also 16 consider the degree to which the discharge causes harm to persons or property; for a 17 violation of AS 46.03.463, the court, in making its determination under this paragraph, 18 shall also consider the volume of the graywater, sewage, or other wastewater 19 discharged; this paragraph may not be construed to limit the right of parties other than 20 the state to recover for personal injuries or damage to their property; 21 (2) reasonable costs incurred by the state in detection, investigation, 22 and attempted correction of the violation; 23 (3) the economic savings realized by the person in not complying with 24 the requirement for which a violation is charged; and 25 (4) the need for an enhanced civil penalty to deter future 26 noncompliance. 27 * Sec. 9. AS 46.03.760(f) is amended to read: 28 (f) An owner, agent, employee, or operator of a commercial passenger vessel, 29 as defined in AS 43.52.295, who falsifies a registration or report required by 30 AS 46.03.460 or 46.03.475 or who violates or causes or permits to be violated a 31 provision of AS 46.03.250 - 46.03.314, 46.03.460 - 46.03.490, AS 46.14, or a
01 regulation, a lawful order of the department, or a permit, approval, or acceptance, or 02 term or condition of a permit, approval, or acceptance issued under AS 46.03.250 - 03 46.03.314, 46.03.460 - 46.03.490, or AS 46.14 is liable, in a civil action, to the state 04 for a sum to be assessed by the court of not less than $10,000 [$5,000] nor more than 05 $200,000 [$100,000] for the initial violation, nor more than $25,000 [$10,000] for 06 each day after that on which the violation continues, and that shall reflect, when 07 applicable, 08 (1) reasonable compensation in the nature of liquidated damages for 09 any adverse environmental effects caused by the violation, that shall be determined by 10 the court according to the toxicity, degradability, and dispersal characteristics of the 11 substance discharged, the sensitivity of the receiving environment, and the degree to 12 which the discharge degrades existing environmental quality; for a violation relating to 13 AS 46.14, the court, in making its determination under this paragraph, shall also 14 consider the degree to which the discharge causes harm to persons or property; this 15 paragraph may not be construed to limit the right of parties other than the state to 16 recover for personal injuries or damage to their property; 17 (2) reasonable costs incurred by the state in detection, investigation, 18 and attempted correction of the violation; 19 (3) the economic savings realized by the person in not complying with 20 the requirement for which a violation is charged; and 21 (4) the need for an enhanced civil penalty to deter future 22 noncompliance. 23 * Sec. 10. AS 46.03.760(g) is amended to read: 24 (g) As used in this section, "economic savings" means the economic benefit 25 of noncompliance [THAT SUM WHICH A PERSON WOULD BE REQUIRED TO 26 EXPEND FOR THE PLANNING, ACQUISITION, SITING, CONSTRUCTION, 27 INSTALLATION AND OPERATION OF FACILITIES NECESSARY TO EFFECT 28 COMPLIANCE] with the standard violated. When determining an "economic 29 savings," the court may consider 30 (1) deferred and avoided costs of compliance with the standard 31 violated;
01 (2) a competitive advantage gained by noncompliance with the 02 standard violated; and 03 (3) income derived as a result of noncompliance with the standard 04 violated from operations that were not authorized or permitted. 05 * Sec. 11. AS 46.03.760 is amended by adding new subsections to read: 06 (h) When assessing the need for an enhanced civil penalty to deter future 07 noncompliance under this section, the court may take into consideration 08 (1) the seriousness of the violation; 09 (2) the degree of culpability of the person; 10 (3) the history of previous violations of the person; 11 (4) other penalties assessed for the same violation; 12 (5) good faith efforts made by the person to comply with applicable 13 requirements and to minimize or mitigate the effects of the violations; 14 (6) the economic effect of the violation on the person; and 15 (7) other factors as justice may require. 16 (i) The department shall, every 10 years, increase the daily civil penalty caps 17 in (a), (e), and (f) of this section by a percentage equal to the percentage of increase in 18 all items of the Consumer Price Index for all urban consumers for Anchorage, Alaska. 19 The index for January of 2021 is the reference base index. 20 * Sec. 12. AS 46.03 is amended by adding a new section to read: 21 Sec. 46.03.762. Administrative penalties for discharges of oil and crude oil. 22 (a) In addition to the actions available under AS 46.03.758 - 46.03.760, the department 23 may assess an administrative penalty against a person who causes or permits a serious 24 discharge or repeat discharges of oil not permitted under applicable state or federal 25 law. 26 (b) An administrative penalty assessed under this section may not be less than 27 $500 nor more than $10,000 for each violation. When assessing a penalty under this 28 section, the department shall consider 29 (1) the effect of the discharge on the public health or the environment; 30 (2) reasonable costs incurred by the state in the detection, 31 investigation, and attempted correction of the discharge;
01 (3) any previous history of compliance or noncompliance by the 02 person with this chapter, AS 46.04, AS 46.09, and AS 46.14; 03 (4) the need to deter future discharges; and 04 (5) the volume, extent, and seriousness of the discharge, including the 05 potential for the discharge to threaten public health or the environment. 06 (c) If a person fails to pay an administrative penalty assessed under this 07 section, the department may bring an action to collect the penalty. The amount of the 08 penalty is not subject to review by the court in an action to collect the penalty 09 described in this section. 10 (d) In a collection action under (c) of this section, the court shall award the 11 prevailing party full reasonable attorney fees and costs incurred in the collection 12 action. 13 (e) Action under this section by the department does not limit or otherwise 14 affect the authority of the department to otherwise enforce this chapter, AS 46.04, 15 AS 46.08, AS 46.09, AS 46.14, or regulations adopted under those statutes, or to 16 recover damages, restoration expenses, investigation costs, court costs, attorney fees, 17 or other necessary expenses. The court shall set off against a judicial civil assessment 18 subsequently awarded under AS 46.03.758, 46.03.759, or 46.03.760 an amount 19 ordered to be paid under this section by the same person for the same discharge. 20 (f) For the purpose of determining the volume of discharged oil under this 21 section, the department shall include the produced water, if any, that was mixed with 22 the discharged oil at the time of the discharge. 23 (g) The department shall, every 10 years, increase the amounts of the 24 administrative penalties authorized in (b) of this section by a percentage equal to the 25 percentage of increase in all items of the Consumer Price Index for all urban 26 consumers for Anchorage, Alaska. The index for January of 2021 is the reference base 27 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 46.03.900 is amended by adding a new paragraph to read: 04 (38) "produced water" means water that is the byproduct of the 05 exploration, extraction, development, production, refining, processing, or disposal of 06 energy-related products. 07 * Sec. 14. AS 46.03.758(c) and 46.03.760(b) are repealed. 08 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 TRANSITION: REGULATIONS. The Department of Environmental Conservation 11 may adopt regulations necessary to implement the changes made by this Act. The regulations 12 take effect under AS 44.62 (Administrative Procedure Act), but not before the effective date 13 of the law implemented by the regulation. 14 * Sec. 16. Section 15 of this Act takes effect immediately under AS 01.10.070(c). 15 * Sec. 17. Except as provided in sec. 16 of this Act, this Act takes effect January 1, 2022.