Legislature(2017 - 2018)BARNES 124
02/05/2018 03:15 PM House LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB323 | |
| SB64 | |
| Presentation: State Residential Building Codes | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 323 | TELECONFERENCED | |
| + | SB 64 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 278 | TELECONFERENCED | |
| += | HB 279 | TELECONFERENCED | |
| += | HB 280 | TELECONFERENCED | |
SB 64-UNIFORM ENVIROMENTAL COVENANTS ACT
3:43:02 PM
CHAIR KITO announced that the next order of business would be
SENATE BILL NO. 64, "An Act adopting the Uniform Environmental
Covenants Act; relating to environmental real property covenants
and notices of activity and use limitation at contaminated sites
to ensure the protection of human health, safety, and welfare,
and the environment; and providing for an effective date."
3:43:05 PM
SENATOR PETER MICCICHE, Alaska State Legislature, presented SB
64 as prime sponsor. He paraphrased the sponsor statement,
which reads as follows [original punctuation provided]:
A primary interest of this office is to streamline and
remove obstacles that inhibit business, commerce or
the transfer of property without reducing expectations
for public health, safety and a healthy environment.
SB 64 achieves that.
In 2003, the Uniform Law Commissioners created a
Uniform Environmental Covenants Act to overcome
inadequate common law rules. An environmental covenant
allows for the sale of property with use limitations
to mitigate risk. Alaska is one of only seven states
that does not have an environmental covenant law.
SB 64 protects the buyer and seller of contaminated
property while allowing the fullest and best use of
the property until the contamination reaches safe
levels. The bill creates a legal mechanism to safely
transfer contaminated property through an
environmental covenant.
SENATOR MICCICHE gave an example of a family in his
district who had struggled with the issue for 20 years. He
mentioned the historic case of Love Canal in New York
State. He continued to read from the sponsor statement,
which reads as follows [original punctuation provided]:
A covenant provides transparency throughout the life
of the property and provides assurances to buyers and
sellers that risks will be safely managed. Other
states have found that covenants help communities
transform blighted property into marketable assets.
A simple process for amending or removing covenants is
included in the legislation. A covenant would not
supplant or impose current contamination removal
standards, which will continue to be managed as they
are currently. The act would not affect the liability
of the principally-responsible parties, but would
provide a method for minimizing exposure to third
parties.
3:46:36 PM
REPRESENTATIVE JOSEPHSON quoted the covenants "would exist until
the contamination reaches safe levels" and asked whether
remediation would continue through the duration of the covenant
or would be discontinued.
SENATOR MICCICHE answered it depends on the contamination. The
proposed bill would allow property to be transferred while
highlighting that contamination exists and would allow for
amending and removing covenants when there is no longer
contamination on the site.
REPRESENTATIVE JOSEPHSON said Senator Micciche had indicated the
covenant was voluntary and read from page 4, lines 8 through 11
of SB 64, as follows:
(c) In addition to other conditions for the
department's approval of an environmental covenant,
the department may require a specified person who has
an interest in the real property that is the subject
of the environmental covenant to sign the
environmental covenant.
REPRESENTATIVE JOSPEHSON asked, "What if they won't, and they
have an interest in the real property?"
3:48:48 PM
SENATOR MICCICHE deferred to Kristen Ryan from the Department of
Environmental Conservation (DEC) for an answer.
CHAIR KITO announced the department would be brought forward for
invited testimony.
REPRESENTATIVE JOSEPHSON mentioned Love Canal and he said it
struck him that would be an example of public notice of harm
being caused. He said there was a lot of notice at the time,
but he did not see a lot of notice for the next-door neighbor.
He asked whether the sponsor was amenable to adding that to the
proposed bill.
SENATOR MICCICHE answered he was looking for the best outcome
for Alaskans and would be amenable to improvements.
3:50:40 PM
REPRESENTATIVE KNOPP referenced the site in Soldotna, Alaska,
and asked whether "a little bit of contamination is a
prohibition to sell any or all" of a property.
SENATOR MICCICHE answered that currently the landowners can use
institutional controls through DEC because there is knowledge of
contamination on that site, but the law does not currently allow
for the protection of the buyer and the seller. He stated that
currently a scenario in which a buyer is unaware of
contamination on a site is possible, whereas the proposed bill
would prevent that.
REPRESENTATIVE KNOPP asked whether there was anything in SB 64
that would require the environmental covenant to "go away" once
the land is deemed to be clean.
SENATOR MICCICHE answered the proposed bill would not change how
the DEC does business but would help future buyers to know about
contaminated property before purchase.
3:53:59 PM
REPRESENTATIVE WOOL asked about the sale of commercial and
industrial sites such as those on the North Slope in the event
of a costly clean-up.
SENATOR MICCICHE answered it had been considered and the only
opposition to the proposed bill was from the federal government
which happens to control 51 percent of the active contaminated
sites in Alaska. The proposed bill would allow the state to put
land use restrictions on federal property.
REPRESENTATIVE WOOL asked what would happen to a depleted field
during the transfer with regard to the clean-up responsibility.
SENATOR MICCICHE answered that would be part of an agreement
between buyer and seller and added the proposed bill would not
displace responsibility. He mentioned the Soldotna, Alaska,
land and stated the clean-up would be something the owners could
not afford, but he opined it was a great location for a resort
and the cost of clean-up would be a minor proportion of the
planned investment for the entire site. He said clean-up could
be part of a side agreement in the sale.
3:57:04 PM
REPRESENTATIVE JOSEPHSON referenced language in the bill
stating, "The department may maintain a registry that contains
all environmental covenants." He said he assumed the covenant
would run with the deed, but he thought a website containing
information on those properties could be required.
SENATOR MICCICHE deferred to Kristen Ryan, Division Director.
3:58:14 PM
KRISTEN RYAN, Director, Spill Prevention and Response,
Department of Environmental Conservation (DEC), gave a brief
overview of the proposed bill. She described the process of
managing contaminated sites. She gave the example of a site
which was currently a Subway restaurant, but which previously
had been a gas station. When the gas station was removed, the
gas had leaked, and the contamination was deemed to be safe with
institutional controls, meaning the information was entered into
a database containing the restrictions placed on the property.
She said the buyer was not aware of the contamination as they
were unaware of the existence of the database and the
information was not included in the deed, which created a larger
problem of spreading contamination. She gave examples of
situations in which the department would allow contamination to
stay on properties with institutional controls. She stated any
neighbors would have to be informed of contaminated areas;
however, the department did not have a mandate. She remarked
the legislation had been proposed over 10 years previously for
the transfer of industrial properties with potential
contamination.
4:03:32 PM
REPRESENTATIVE WOOL asked about the industrial application and
where the responsibilities lie for a depleted site.
MS. RYAN answered currently industrial sites on the North Slope
have a lease agreement which states the land will be returned to
its original state as part of the lease arrangement with
Department of Natural Resources (DNR).
REPRESENTATIVE WOOL asked whether, if a seller could not afford
to remediate the contamination but a buyer could, the
responsibility would transfer.
MS. RYAN answered SB 64 would not change the current legal
process, and the person who caused the contamination is
responsible.
4:06:21 PM
REPRESENTATIVE JOSEPHSON stated his concern that the proposed
bill would stop the current process for remediation and would
simply ease the transfer of property, with notice of
contamination, from one person to another. He said he thought
regulators would "just throw in the towel."
4:07:28 PM
MS. RYAN answered the proposed bill would not change the current
environmental regulation paradigm, just provide a thorough
communication tool for future owners.
REPRESENTATIVE JOSEPHSON asked for an explanation of the "Notice
of activity and use limitation." [page 9, line 25, of SB 64].
He said it links itself to the environment response project
which is part of Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) but "allows the owner to
move from one to the other."
MS. RYAN answered the entire section is to accommodate the
federal government. She added the state is not allowed to put a
covenant on federal property. She indicated over the years
states have inherited a lot of contaminated federal land and
some had developed the specific tool of putting a notice of use
restriction, which is the equivalent of a covenant, on federal
property. She added native corporations in particular have
inherited a lot of contaminated federal lands through trades and
that language is important to ensure communication of
contamination was clear.
4:10:51 PM
CHAIR KITO asked Ms. Ryan to speak to the letters received from
the Department of Defense (DoD) and whether DoD is comfortable
with the language assuaging their concerns.
MS. RYAN answered it had been an ongoing conversation with DoD
and they are uncomfortable with the state giving the federal
government restrictions. She stated DoD was compliant with
similar language in the state of Colorado. She added DoD was
nervous about the state having enforcement authority on federal
property, but they do recognize the need for it.
4:12:29 PM
REPRESENTATIVE BIRCH asked about the current monetary threshold
for a Superfund site.
MS. RYAN answered that getting a site listed as a Superfund site
is a process, and there is no dollar amount restriction. She
added there were only two listed in state history and it is not
something the state feels is a good process as it has negative
connotations. She stated the state has robust contaminated site
lands regulations, so historically the Environmental Protection
Agency (EPA) has let the state take lead on those sites. She
remarked the problem with getting a site listed is that it takes
the state out of the driver's seat and puts EPA in it. She
underlined that a Superfund listing would still require the
state to contribute financially.
4:14:46 PM
CHAIR KITO said he thought it would require an Act of Congress
to list a Superfund site.
4:15:06 PM
CHAIR KITO opened public testimony on SB 64. Upon ascertaining
there was no one available to testify, he closed public
testimony.
4:15:41 PM
REPRESENTATIVE JOSEPHSON asked whether the chair would consider
an amendment.
CHAIR KITO replied an amendment could be offered.
4:16:10 PM
REPRESENTATIVE JOSEPHSON moved Amendment 1, adding language as
follows:
"Public Comment. Before the commissioner signs an
environmental covenant, the department shall provide
an opportunity for public comment on the environmental
covenant."
SENATOR MICCICHE asked for the page and line in which
Representative Josephson thought the language would be
appropriate.
REPRESENTATIVE JOSEPHSON answered Legislative Legal and Research
Services recommended page 3, following line 4, and said he
thought the amendment would become new section 46.04.303.
SENATOR MICCICHE answered the covenant would be a property
owner's voluntary decision on whether to place a covenant on
their own property and he was not sure of the value of placing a
requirement of public comment on the decision.
REPRESENTATIVE JOSEPHSON replied that the bill says that
registry is optionally required at the department's discretion.
He said that in Anchorage he gets public notice for buildings or
widened sidewalks being built around his home. He mentioned
that those whom he had invited to comment on the proposed bill,
such as Alaska Community Action on Toxics (ACAT), had expressed
concerns with notice and had recommended ecology law journals
such as Ecology Law Quarterly and a Boston College article.
4:19:38 PM
REPRESENTATIVE JOSEPHSON read from "The Uniform Environmental
Covenants ActAn Environmental Justice Perspective," Andrea
Ruiz-Esquide, Ecology Law Quarterly, Volume 31, page 1025, 2004
edition, which read as follows:
Early, ongoing, and meaningful public participation is
the hallmark of sound public policy and decision
making. The community most directly impacted by a
problem or project is inherently qualified to
participate in the decision-making process.
Mechanisms must be established to ensure their full
participation, including training and support for
community groups, technical assistance grants,
community advisory groups, and others.
REPRESENTATIVE JOSEPHSON said it struck him that "these are
significant covenants that interrupt the normal common law" and
he thought notice is reasonable.
4:20:44 PM
SENATOR MICCICHE pointed out page 5 of SB64, starting at line 8,
and read from Section 46.04.315, which reads as follows:
Notice of environmental covenant. (a) A copy of the
environmental covenant shall be provided by the
persons and in the manner required by the department
to
(1) each person that signed the environmental
covenant;
(2) each person holding a recorded interest in
the real property subject to the environmental
covenant;
(3) each person in possession of the real
property subject to the environmental covenant;
(4) each municipality or other unit of local
government in which real property subject to the
environmental covenant is located; and
(5) any other person the department requires.
SENATOR MICCICHE said he wondered if "may" should be changed to
"shall" and "be included in the database," to meet
Representative Josephson's objective.
4:22:31 PM
REPRESENTATIVE JOSEPHSON stated he thought Senator Micciche was
referring to page 11, line 29, in the section entitled,
"Registry." He deferred to the director for confirmation that
the proposed language would make some improvement.
MS. RYAN answered the department had every intent to maintain
that database and underlined the database was well used by
everyone in the state who was researching contamination, so the
department had no issue with changing it into a mandate. She
remarked the other changes that Representative Josephson was
recommending were more problematic. She said she believed the
material Representative Josephson was reading pertained to
Superfunds and she did not know whether the proposed bill was
the right vehicle for that concern.
4:24:24 PM
REPRESENTATIVE JOSEPHSON withdrew Amendment 1.
REPRESENTATIVE JOSEPHSON moved to adopt Conceptual Amendment 2,
turning "may" to "shall" on line 29 of page 11."
CHAIR KITO objected for the purpose of discussion.
4:25:04 PM
REPRESENTATIVE SULLIVAN-LEONARD asked Ms. Ryan about the effects
of the mandate.
MS. RYAN answered the department continued to maintain the
database and that what the bill corrects is that it references
that database from the deeds so an individual who doesn't know
of the database would get notified. She emphasized changing the
language to "shall" would not change how the division operates.
REPRESENTATIVE SULLIVAN-LEONARD surmised that Conceptual
Amendment 2 was not necessary.
MS. RYAN reiterated the mandate would not change what the
department does.
CHAIR KITO asked Jennifer Currie of the Department of Law to
speak to the Conceptual Amendment.
4:27:09 PM
JENNIFER CURRIE, Senior Assistant Attorney General,
Environmental Section, Department of Law, testified there was no
change except that it requires the department to maintain the
registry.
CHAIR KITO stated at present the statute did not have
environmental covenants identified so they would not have to be
registered. He read from page 11, line 11, of SB 64 as follows:
Registry. (a) The department may maintain a registry
that contains all environmental covenants and notices
of activity and use limitation and any amendment or
termination of those instruments.
CHAIR KITO asked whether, if "may" was changed to "shall", the
department would be required to include all environmental
covenants in the database.
MS. CURRIE answered that with "shall" they are required to
include environmental covenants, and with "may" the department
can include them.
CHAIR KITO stated he saw the benefit of changing "may" into
"shall", at least as regards the environmental covenant piece.
4:29:05 PM
CHAIR KITO withdrew his objection. There being no further
objection, Conceptual Amendment 2 was adopted.
4:29:39 PM
REPRESENTATIVE WOOL moved to report SB 64 as amended out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HCS SB 64(L&C) was
moved from the House Labor and Commerce Standing Committee.