Legislature(2017 - 2018)BELTZ 105 (TSBldg)
02/28/2017 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB78 | |
| SB64 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 78 | TELECONFERENCED | |
| *+ | SB 64 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 64-UNIFORM ENVIRONMENTAL COVENANTS ACT
3:35:34 PM
CHAIR BISHOP called the meeting back to order and announced
consideration of SB 64.
SENATOR PETER MICCICHE, sponsor of SB 64, Alaska State
Legislature, Juneau, said this bill is about taking blighted
property and putting it back into productive use in our
communities. It's something lawmakers think about in moving
policy forward. They want to streamline and remove obstacles
that inhibit business, commerce, or the transfer of property,
but they are unwilling to reduce expectations for public health,
safety, and a healthy environment. He said SB 64 blends all
those objectives.
By way of background, he explained that the Uniform Law
Commission created the Uniform Environmental Covenants Act in
2003 to overcome inadequate common law rules. It 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 at this time. It protects both the buyer and the
seller of contaminated property while allowing the fullest and
best use of the property until the contamination reaches safe
levels. The covenant is specific to the risks at a particular
site and restricts activities that result in exposure while
allowing other uses to occur. Such a process is often all that
is necessary to make property transferable as well as
economically and functionally viable.
3:37:51 PM
SENATOR MICCICHE gave an example of what used to be a gasoline
station with some contamination on the site. Perhaps it's gone
into an estate and is becoming blighted. It's in a valuable part
of town. The seller now could record the contamination on a
covenant if somebody is willing to invest in the property and
want to open an auto parts store that is appropriate on that
site and is willing to take on that contamination level. Then
some day when the contamination is removed it would be removed
from the covenant. It's voluntary, but the covenant provides
transparency throughout the life of the property. It provides
assurances to buyers and sellers that risks will be safely
managed. It is a simple process and 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 to reduce exposure to third parties.
3:39:15 PM
RACHEL HANKE, Staff to Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, reviewed the following sectional
analysis for SB 64:
Section 1
Adds a new article to AS 46.04 that
· AS 46.04.300 - establishes when an environmental
covenant is necessary, who is a holder (multiple
holders are allowed), who is bound by the covenant,
subordination, rules for commonly-held property, and
states that the covenant has no interest in the
land;
· AS 46.04.305 - provides which documents are required
for the record and additional documents that may be
requested;
· AS 46.04.310 - provides situations in which the
covenant is still valid and enforceable and is
priority over common law;
· AS 46.04.315 - outlines procedure for notice;
· AS 46.04.320 - establishes guidelines for recording
the covenant in property records;
· AS 46.04.325 - defines terms for termination of a
covenant and amendment by court action i.e.,
consent, foreclosure with another interest as
priority, or eminent domain;
· AS 46.04.330 - defines procedure for termination of
a covenant and amendment by consent;
· AS 46.04.335 - states the department has the power
to enforce and bring civil action if there is
failure to comply;
· AS 46.04.340 - creates the ability to enforce an
environmental covenant on federal lands;
· AS 46.04.345 - places covenant restrictions above
other land-use laws;
· AS 46.04.350 - provides that the department shall
maintain a registry for covenants;
· AS 46.04.355 - states that this Act is uniform law;
· AS 46.04.390 - provides definitions used in the Act.
Section 2 is uncodified law and provides that the
Department of Environmental Conservation and the
Department of Natural Resources may adopt necessary
regulations to implement this Act.
Section 3 provides an immediate effective date for
Section 2 of this Act.
3:41:24 PM
SENATOR GARDNER asked what the differences are between the
original bill and version J.
JENNIFER CURRIE, Department of Law (DOL), Anchorage, Alaska,
answered that one small change adds a list of items that may be
included in a covenant but are not required in section 305(b).
Another addition was made to the number of signatories of a
covenant. The Department of Natural Resources (DNR) is a
required signatory for any piece of property the state has an
interest in and the bill specifies that the DNR signature cannot
be waived.
3:43:28 PM
SENATOR MACKINNON asked what an environmental covenant is.
SENATOR MICCICHE answered that it is a specific recordable
interest in real estate that will be tracked to the Department
of Environmental Conservation (DEC) on its database. The
department's database is already in place, so they don't expect
a fiscal note. The covenant is specific to the risks of that
particular site and restricts activities that could result in
exposure while allowing other uses to occur. Essentially, he
said it travels with the property until the removal standards
are met for that particular contaminant.
He added that it protects the buyer as much as the seller for a
couple of reasons and was prompted by an incident in Anchorage
where a buyer was unaware of the contamination on a piece of
property and spread a bunch of dirt around it for the current
use of that property, and in doing so, he contaminated adjacent
sites, and then became liable for that contamination, too. So,
it really does protect both, and it allows greater flexibility
for the department on a timeline of dealing with contaminated
property while allowing blighted property to return to
productivity.
3:45:21 PM
SENATOR MACKINNON said she wanted it on the record specifically
that it's a "recordable interest on a piece of property."
3:46:40 PM
At ease
3:47:25 PM
CHAIR BISHOP called the meeting back to order and invited
Kristin Ryan to comment on his following hypothetical: say there
is a business here and there's a fire, and the fire department
comes in and puts the fire out. There are different types of
hazardous materials once they are released from their
containers. Another person owns another piece of property and
the retardant ran over onto it. Now this person can't sell their
property because the department has identified some of the
material as a real problem. Does this bill help that person be
able to make a sale of this property?
KRISTIN RYAN, Director, Division of Spill Prevention and
Response, Department of Environmental Conservation (DEC),
Anchorage, Alaska, replied in that scenario they would require
the responsible party to address the contamination they caused
on their property and their neighbor's property. If for some
reason - there are many reasons this could occur - it's okay to
leave some of that contamination on either property above the
cleanup level, a covenant would come into play. It would say -
for example, a flame retardant contaminated the ground water -
you would not be allowed to put a well on this property, but all
other uses can go forward.
3:49:04 PM
SENATOR STEDMAN joined the committee.
SENATOR GARDNER asked if a person considers buying a piece of
property and needs to work with DEC to transfer it, what the
timeline is for this process to be resolved.
MS. RYAN replied the department already does this with what they
call "institutional controls;" it is put on a property where
contamination has been left above cleanup levels. This bill
communicates those controls to future buyers by staying with the
land. Right now those controls remain on a database the
department maintains; sometimes they are referenced and
sometimes they're not. This bill doesn't change anything they
are currently doing; it just records that action on the title of
the property so that future buyers know about it. It won't have
any impact on the timeline of the transfer of a property.
CHAIR BISHOP said this bill is just a full disclosure on the
property title.
MS. RYAN said that was right.
CHAIR BISHOP asked how AS 46.04.340 that creates the ability to
enforce environmental covenant on federal lands works.
MS. RYAN replied that over 68 percent of contaminated sites are
on federal property and the department is not allowed to put an
environmental covenant on federal property. This bill will allow
them to put a notice of use restriction on federal property,
which is about as good as it can get. It is a tool that the
State of Colorado developed in conjunction with federal
agencies, and it has been working there.
CHAIR BISHOP said so they can make a public notification of
federal contaminated property.
MS. RYAN answered yes, because there are many cases where that
property is transferred either into state ownership or private
ownership, they want to make sure that restriction is
communicated to future buyers (Native corporations), because
there have been many cases of the transfer of contaminated
federal property and the new purchaser may or may not know about
it. The old transfers can't be fixed, but going forward this
legislation would stop that from occurring.
3:52:43 PM
SENATOR HOFFMAN asked how contaminated properties are identified
particularly those that are on state and private lands.
MS. RYAN answered they are identified in a variety of ways, but
usually someone discovers a release and contacts the department
about it.
SENATOR HOFFMAN said some people from Bristol Bay came to his
office last week and were concerned about some contaminations
that may have occurred during the Pebble Mine search for
minerals and asked if those had been identified.
MS. RYAN said that activity occurred under DNR permits and no
contamination has been left that is above the cleanup levels.
Residual drilling muds remain, but they are not designated as
contaminated sites, which would trigger her department's
involvement.
SENATOR HOFFMAN asked if it's DNR's responsibility to make that
determination or DEC's if the people of the region have
concerns.
MS. RYAN replied that they can contact her department and they
can talk about the results if they have data that indicates the
contamination is above the cleanup levels.
3:54:38 PM
SENATOR MACKINNON asked if she is familiar with the Legacy Well
issue on federal land and if those are listed as contaminated
sites.
MS. RYAN answered yes, they are known. And if the federal
government chose to leave contamination above the cleanup
levels, which has been decided for some of the sites, they would
issue a notice of restricted use because of the inability to use
an environmental covenant on federal property.
3:55:26 PM
BEN ORZESKE, Uniform Law Commission, Chicago, Illinois, said
they are a non-profit organization that has been around since
1982, and their job is to draft nonpartisan, model legislation
in areas of state law for which there is some need for
uniformity between the states. Alaska has enacted dozens of
uniform laws including the Uniform Commercial Code and the
Uniform Anatomical Gift Act. This is another uniform act and it
was completed in 2003. It has since been enacted in 23 states,
plus the District of Columbia (D.C.) and the U.S. Virgin
Islands. Another 20 states have their own environmental covenant
law that is not a version of the uniform act, but Alaska is one
of only seven states that doesn't have some version of an
environmental covenant law.
3:56:49 PM
He agreed with all of the previous testimonies and provided a
couple of examples of how the environmental covenants can be
used which will help illustrate how flexible it is. One common
use is when a land fill is closed. Often a place where trash has
been dumped will be capped with a concrete cap and the
environmental covenant in that case might prohibit any
excavation that would penetrate that cap and allow moisture to
seep in. They might be familiar with the Love Canal dump site
in upstate New York that was capped and later sold to a
developer who punched through the containment measure on top of
the dump releasing hazard substances to people who had built
homes on top of it. That could have been avoided had there been
some sort of covenant in place.
MR. ORZESKE said covenants often have some sort of reporting
requirement, one can't dig a new well or pump ground water to
the surface without a monitoring requirement where the owner has
to do some sort of test monthly or quarterly and report the
result to the DEC. An environmental covenant might say that
requirement remains in place until the contamination level
reaches a certain level for six months consecutively and at that
point it can be removed, and title cleared, and that land put
back into fully productive use.
He said it's as flexible as the department chooses to make it:
whatever parties agree to. It is completely voluntary, and
people will generally get into these things because they are
trying to make the best of a bad situation and make the land as
productive as it can be.
CHAIR BISHOP announced he would hold SB 64 in committee for
future consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 64 Support Document - Fact Sheet 2.pdf |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Hearing Request Memo.pdf |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Sectional Analysis Ver. J.pdf |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Sponsor Statement.pdf |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Support Doc - Uniform Law Commission.PDF |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Support Document - Fact Sheet.pdf |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |
| SB 64 Ver. J.PDF |
SCRA 2/28/2017 3:30:00 PM |
SB 64 |