Legislature(2017 - 2018)ADAMS ROOM 519
03/29/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB158 | |
| HB322 | |
| HB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 305 | TELECONFERENCED | |
| + | SB 158 | TELECONFERENCED | |
| + | HB 322 | TELECONFERENCED | |
| += | HB 216 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 158
"An Act relating to oil and hazardous substances and
waiver of cost recovery for containment and cleanup of
certain releases; and providing for an effective
date."
1:35:56 PM
Co-Chair Foster invited testifiers to the table.
1:36:08 PM
KRISTIN RYAN, DIRECTOR, DIVISION OF SPILL PREVENTION AND
RESPONSE, DEPARTMENT OF ENVIRONMENTAL CONSERVATION,
explained that there were 2 versions of the same bill: SB
158 and HB 322 (which had been slightly amended in the
House Resources Committee). The governor had proposed the
legislation because of problematic heating oil spills at
homes.
Ms. Ryan explained that spills of heating oil at home had
negative impacts on the homeowner and the environment, and
were costly to clean up. The Department of Environmental
Conservation (DEC) came into the home to provide assistance
with addressing a spill. It was a benefit to the homeowner.
The problem was when the homeowner received a bill. Current
law required DEC to recover all costs for responding to a
fuel spill. The bill was automatically generated by the
Division of Spill Prevention and Response (SPAR) accounting
system several weeks after the spill.
Ms. Ryan continued describing the process of assisting home
owners with heating oil spills. Once the bill was given to
the homeowner, the homeowner often became unwilling to
communicate further (to avoid further charges) which then
would inhibit the ability of the division to help clean up
the contamination. The division wanted to provide technical
assistance without sending homeowners a bill. The
legislation would allow for free technical assistance (with
limitations) for homeowners or small apartment buildings
with four or fewer units.
Co-Chair Foster reviewed the available testifiers online.
1:41:02 PM
Representative Wilson referred to page 2, lines 25-26,
which referred to retroactivity. She asked why the
retroactive date was only back until January 1, 2018.
Ms. Ryan explained that the retroactive clause would allow
for the department to cease billing current homeowners that
were being assisted. She furthered that there were
approximately 150 homeowners being assisted with active
spills. The department was not interested in going further
back and reimbursing homeowners that had been billed in
previous years.
Representative Wilson asked if the 150 actively engaged
homeowners would be billed if the bill were to pass.
Ms. Ryan replied that the division has placed a pause on
billing of the 150 active cases.
Representative Wilson asked about when billing would stop.
Ms. Ryan responded that billing would cease when the bill
went into law.
Representative Kawasaki asked about the liability of a
homeowner. He wondered if home owner's insurance covered
spills.
Ms. Ryan responded that there was typically an exclusion
clause for the cost from home heating oil spills.
Representative Kawasaki asked why the bill would be limited
to homes or small apartment buildings.
Ms. Ryan was not sure why 4 units was chosen as a limit for
apartment buildings. She pondered that a facility with more
units would be more commercial and have more resources
available. She stated that many of the spills the
department encountered were on the smaller end of the
spectrum. It had seemed a reasonable place to draw a line.
Representative Kawasaki asked if the concept was only for
residential properties.
Ms. Ryan responded in the affirmative.
1:45:50 PM
Representative Ortiz relayed that under the current status
DEC was forced to bill homeowners when the department took
up their case. It was also his understanding that if time
was spent over the phone, home owners would be billed as
well.
Ms. Ryan replied that any activity related to the case
would be billed to the homeowner.
Ms. Ryan answered in the affirmative and elaborated that
activities such as transferring the case file and writing a
letter would engender charges.
Representative Ortiz asked how long the department had been
forced to bill homeowners.
Ms. Ryan recalled that the enacting statute was put in
place in the early 1990s. She stated that most of the
division's statutes were enacted after the Exxon-Valdez Oil
Spill. She predicted that the impetus for the statute was
wanting large corporations like ExxonMobil to recover costs
associated with a large corporation spilling oil.
Representative Tilton asked who had the burden of proof to
get a waiver.
Ms. Ryan would be reliant on her staff to make a
determination in the field as to whether an incident was a
home heating oil spill or not. She thought in most cases it
would be obvious. The decision would be made by the
department and would be appealable. She stated that the
division had an informal and well-defined appeals process.
Representative Tilton indicated that the fiscal note stated
regulation would be adopted in 2020. She thought the
timeframe was lengthy.
Ms. Ryan assumed the time period would be much shorter. She
reiterated that the division was eager to implement the
bill.
Co-Chair Foster noted that Representative Pruitt had joined
the meeting.
1:49:54 PM
Representative Guttenberg considered a letter from Al-Chem
Engineering (copy on file). He mentioned that more
aggressive clean-up activities created more harmful
situations through exposing the soil and had the potential
to be expensive. He wondered if there were any less
aggressive measures that could be used. He provided a
hypothetical scenario. He wondered about containment versus
clean-up.
Ms. Ryan replied that every clean-up was different. It was
very common to leave contamination in place. She referenced
a bill pertaining to contamination. The decision to leave
the contamination required consideration of many factors.
The author of the letter disagreed with the division on
many cases, and actively participated in the regulatory
drafting process where clean-up standards were established.
She could not provide a definitive answer. For example, if
there was contamination around the foundation of a
building, often it would be left so as to not de-stabilize
the building. The first goal of the division was clean-up.
There was active monitoring to determine if in-place
contamination was not causing more problems.
1:53:17 PM
Representative Guttenberg asked how different the new
regulations might be.
Ms. Ryan responded that she did not anticipate the bill
changing how the division processed clean-ups. She thought
the bill would only impact billing. It would not impact the
advice the division provided to homeowners and commercial
operators.
Representative Guttenberg did not think it seemed like the
department would be doing more extensive remediation. He
was concerned about lack of opportunity for cost recovery
affecting the final solutions for homeowners.
Ms. Ryan understood his question. She did not see the bill
change how the division conducted cleanup. The money did
not go into the operating budget. The billing funds went
into the spill prevention account, which was used by the
legislature to fund the work of the division.
1:56:27 PM
Representative Kawasaki asked about the cost recovery
issue. He recognized that some individual homeowners could
not afford to do spill cleanup. He wondered about the
percentage of spill response for homeowners. He mentioned
the Spill Prevention and Response Fund, and wanted to make
sure that the state engaged in cost recovery when it could.
Ms. Ryan wondered if he was asking for the cost a homeowner
would experience for a cleanup.
Representative Kawasaki wanted to know about how many of
the homeowners that could not pay after a spill. He asked
how DEC would spread the message that the state was no
longer billing for spill response.
Ms. Ryan stated that there were two costs associated with a
spill: the cost for cleanup (which could run as much as
$60,000), and the cost to the state to monitor the cleanup
of the spill. She would provide him a letter to inform
which homeowners were not reimbursing the state for costs.
Ms. Ryan continued to address Representative Kawasaki's
question. The department tried to participate in home shows
and reached out to builders and handy-people. She relayed
that most homeowners were unaware that DEC would bill them
for their service until after it had occurred. Most often
homeowners stopped communicating when the process was
already underway.
Representative Kawasaki referenced insurance liability and
wondered if the division worked with a homeowner when there
was insurance to cover the incident.
Ms. Ryan relayed that it was a major point of frustration
for the division that insurance companies were not required
to provide the rider for individuals to purchase the
insurance for spills.
Co-Chair Foster OPENED Public Testimony.
2:01:21 PM
ANDY RAUWOLF, SELF, KETCHIKAN (via teleconference), spoke
in support of the legislation. He was a retired contractor.
He had a rental where an oil spill had occurred while he
was out of town. At the time, he was not familiar with the
subject, and he did not realize the extent of the problem.
He had hired an environmental consultant and had worked
with DEC. The department was very helpful and responsive.
He received a letter from DEC that mentioned there would be
associated charges. Since the issue arose, he had no oil
heating available. He discussed the onerous process of
testing the site. He had not been able to rent or to sell
the property. He had spent $12,000 thus far and still had
contaminated soil.
Mr. Rauwolf continued his testimony. He still had all of
the containment in the ground. He reported that some of the
samples he had sent to anchorage showed excessive
contamination. He was not sure how long the process would
take but thought it would cost $35,000 to $40,000. He had
been directly impacted and was shocked to receive a bill
from DEC for phone calls for just under $500. He was unsure
how DEC came up with the amount to charge. He did not want
to talk to here anymore. He thought homeowners should be
given information on the potential for spills.
2:08:26 PM
Representative Ortiz thanked Mr. Rauwof for taking the time
to call in.
Co-Chair Foster CLOSED public testimony.
Representative Wilson asked about DEC putting a covenant on
a property that had been contaminated and not cleaned up.
Ms. Ryan responded that she had been referencing SB 64, a
piece of legislation that would give the department the
authority to put a covenant on a property if contamination
remained above clean-up levels. The authority did not
currently exist.
Representative Wilson asked if the department had the
authority to place a lien on the property if the homeowner
could not pay.
Ms. Ryan answered in the affirmative. She stated that the
cost-recovery authority had other mechanisms. There was an
"inability-to-pay" and the bar was extremely low. The
department had the ability to place liens on properties to
recover costs.
Co-Chair Foster conveyed that amendments were due the
following Monday at 5:00pm.
SB 158 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSHB 322 (RES) Sectional PPT_TA.pdf |
HFIN 3/29/2018 1:30:00 PM |
HB 322 |