Legislature(1999 - 2000)
05/14/1999 02:15 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS for SENATE BILL 110(RLS) am
"An Act relating to liability for the release of
hazardous substances involving certain property
acquired by a governmental entity; relating to making a
determination as to when a hazardous substance release
has occurred; relating to liability of a party other
than the party responsible for the initial release of a
hazardous substance; and providing for an effective
date."
BETH HAVEGIG, STAFF, SENATOR WILKENS testified on behalf of
the sponsor in support on SB 110. She read the sponsor
statement:
"This bill will assist municipalities in performing their
statutory duty to enforce liens for delinquent real
property taxes. Tax foreclosure is a mandatory process
leading to the taking of a tax deed that places the title
to a tax delinquent property in the municipality's name.
Some properties with delinquent taxes are contaminated.
Municipalities are concerned that they may be held liable
for pre-existing contamination of foreclosed land with
significant environmental remediation costs.
The federal Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) exempts by
definition state and local governments who acquire
property through "bankruptcy, foreclosure, tax
delinquency, abandonment, or similar means." However, the
state law which addresses liability for damage caused by
the release of hazardous substances, AS 46.03.822, does
not precisely mirror the federal law. SB 110 will amend AS
46.03.822 to ensure that federal and state laws are
similar in this respect. The municipality may therefore
have title to the contaminated property without
involuntary exposure to cleanup.
Changes in the Senate also recognized the need to extend
this courtesy to innocent third parties, which are not
directly responsible for contaminating the property they
have acquired. Subsection (m) clarifies state law to say
that a person who acquires a facility without knowledge of
prior existing contamination is not liable under AS
46.03.822 so long as they follow due diligence steps to
begin operations to contain and clean up the hazardous
substance."
Ms. Havegig responded to questions by Co-Chair Therriault.
She noted that section (m) only works if the person
undertakes "all reasonable inquiries into the previous
ownership and uses of the property consistent with good
commercial or customary practice in an effort to minimize
liability." The new owners must take steps of due diligence
at the time of purchase.
Representative Foster noted that a common citizen is not
liable as long as they follow due diligence. He questioned
if municipalities need to follow due diligence. Ms. Havegig
responded that municipalities would be responsible for due
diligence. Steps would have to be taken to assure that the
spill doesn't get any worse. The new owner would not be
responsible for passive leaching.
Representative Austerman asked if there was discussion on
making the provisions retroactive. Ms. Havegig stated that
there had not been discussion on providing a retroactive
clause.
ARDITH LYNCH, ATTORNEY, FAIRBANKS NORTH STAR BOROUGH
testified via teleconference. She explained that the
legislation addresses municipal ownership in two different
ways. In section (m) the municipality is in the same
situation that a private person would be in if they purchase
a piece of property. The municipality would still have to
use due diligence to clean up a hazardous substance.
Subsection (l) on page 2 deals with the limited issue of
when a municipality acquires a piece of property through
foreclosure. Foreclosure is a mandatory process that the
borough must conduct when someone is delinquent in his or
her real property taxes. In those cases the borough takes
title to the property and puts it on the market for sale.
The municipality is forced into the chain of title. The
municipality would be responsible for taking steps to
prevent additional obvious contamination.
Representative J. Davies noted that the municipality
effectively removes control of the land from the potentially
liable person when it forecloses. He questioned if the
municipality takes on liability to resolve the issue when it
removes the responsible person. Ms. Lynch acknowledged that
the municipality would have responsibility to take steps to
address leakage that is discovered after the borough took
possession of the title.
Ms. Havegig stated that "person" is defined to mean "any
individual, public or private corporation, political
subdivision, government agency, municipality, industry, co-
partnership, association, firm, trust, estate, or any other
entity whatsoever." She concluded that subsections (m) and
(l) could apply to municipalities. The issue is voluntary
vs. involuntary ownership.
In response to a question by Representative J. Davies, Ms.
Lynch acknowledged that there are property owners that feel
that the borough will not foreclose on property due to the
risk of liability. In some cases private businesses are
being operated on property without paying the property tax.
This puts their competitors at a disadvantage. She
reiterated that in the case of a foreclosure that the
borough is not voluntarily taking on the burden. The borough
should be liable for obvious problems such as leaking
batteries.
Representative Austerman questioned the definition of
"vessel" on page 2, line 17. Ms. Havegig noted that "vessel"
means every description of water craft or other artificial
contrivance that is used or is capable of being used as a
means of transportation on water, or that carries hazardous
substance for the purpose of incineration of the hazardous
substance.
CRAIG TILLERY, ASSISTANT ATTORNEY GENERAL, ENVIRONMENTAL
SECTION, DEPARTMENT OF LAW, ANCHORAGE testified via
teleconference. He clarified that vessel would also apply to
vehicles that have leaking batteries. He noted that the
legislation provides a municipality with immunity for
contaminates that are leaking on the property at the time
the property is acquired. Municipalities would be
responsible for addressing containers that are actively
leaking at the time the property is acquired.
VIRGIL NORTON, KENAI testified via teleconference. He
provided information on the legislation. He noted that he
worked with the Senate Judiciary Committee to add section
(m). He maintained that AS 46.03.822 imposes obligations on
property owners that discover contamination. He emphasized
that cost recovery liability should be directed toward the
person or the party that actually committed the act of
pollution. The responsible party is the party that first
released the contaminate into the environment. He observed
that the average person does not have the resources to
battle the Department of Environmental Conservation or the
Department of Law. He maintained that if the property owner
has incurred costs in acting responsibly that he should be
able to recover from the guilty party.
Co-Chair Therriault observed that there is a zero fiscal
note from the Department of Transportation and Public
Facilities.
Representative Foster MOVED to report HCS CSSB110 (JUD) out
of Committee with the accompanying fiscal note. There being
NO OBJECTION, it was so ordered.
HCS CSSB110 (JUD) was REPORTED out of Committee with a "do
pass" recommendation and with a zero fiscal note by the
Department of Transportation and Public Facilities,
published date 4/29/99.
NOMINATIONS TO THE ALCOHOL BEVERAGE CONTROL BOARD
Co-Chair Therriault handed out information pertaining to
nominations to the Alcohol Beverage Control Board. He
observed that there would be a joint session to address
confirmations. He noted that members did not indicate a
desire to hold a meeting on the nominations.
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