Legislature(2017 - 2018)BUTROVICH 205
02/02/2018 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska's State Managed Game Refuges, Sanctuaries & Critical Habitat Areas | |
| HB130 | |
| SB158 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 130 | TELECONFERENCED | |
| *+ | SB 158 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
SB 158-OIL/HAZARDOUS SUB.:CLEANUP/REIMBURSEMENT
4:26:37 PM
CHAIR GIESSEL announced consideration of SB 158. She said when
homeowners discover an oil spill on their property, usually a
heating oil tank that spills, the Department of Environmental
Conservation (DEC) has the authority and is tasked with managing
that spill. Current law requires the department to pass its
clean-up costs to the homeowners without exceptions. This
discourages property owners from reporting the spills in the
first place. SB 158 aims to make it easier for homeowners to
come forward, spills to be identified and cleaned up, and the
department to reward those who promptly report a spill.
4:27:14 PM
KRISTIN RYAN, Director, Division of Spill Prevention and
Response (SPAR), Department of Environmental Conservation (DEC),
said that people are rarely equipped to address a release on
their property. Homeowners are usually unequipped technically
and financially to know what to do and insurance companies are
unwilling to cover the costs that can go from $6,000 to $80,000
for a full tank. Home owners are stuck, and it can be a huge
hardship. Knowing that inhibits people from contacting DEC if
they know they can't afford to ask for help. DEC's goal is to
help them with their problem and reduce the environmental
contamination. They can provide that technical service now but
must bill the property owner for it. SB 158 will allow DEC to
waive their billing. The revenue generated by cost recovery in
these situations is minimal and not worth the cost of homeowners
not notifying them.
MS. RYAN said this problem is more common in Fairbanks, Juneau,
and rural communities because oil is used for home heating
primarily.
4:30:29 PM
She reviewed the steps in a home heating spill, which are
controlling the source, recovering the free product before it
seeps into the ground, and removing contaminated soil.
MS. RYAN explained that usually the leak is discovered after a
tank has been filled, so not only does the homeowner have to
deal with the spill, they have to pay for all the fuel they just
bought. If it's winter they must get a mobile storage tank, so
they can stay warm. It can be overwhelming. Then adding insult
to injury, they get a bill from DEC when all DEC wants to do is
help them.
She said DEC thought about proposing standards to limit who
would get this free service, but the people it usually happens
to don't generate much revenue anyhow, and they have found that
the cost of getting paid isn't worth the time it takes. Plus, it
has the consequence of inhibiting compliance.
CHAIR GIESSEL said SB 158 is a two-page bill and the content is
actually in section (e) and asked her to talk through criteria,
rationale and implications.
4:32:46 PM
MS. RYAN said they spent quite a bit of time trying to figure
out how to craft this bill to help the people they are most
wanting to help and decided on a limitation of four units since
those are a small housing complex that are relatively common in
Alaska and a large building would be more of a commercial
operation. That is why language is restricted to piping,
tankage, and equipment used to generate power for the home - not
a commercial operation. They tried to capture the residential
need.
The department wants the home owners to take measures to contain
a release as soon as possible - a bucket to catch the leak, for
instance - and address the problem with prevention and early
reporting. DEC needs the cooperation of the home owner, too.
Sometimes they are refused access, because the owner knows they
will get billed. The sooner DEC can respond the better the
outcome will be and it's critical to not wait three months to
call.
4:34:59 PM
SENATOR WIELECHOWSKI asked if language- single family homes - on
page 2, line 6, applies to trailers. He has a lot of trailers in
his district to which, "This happens all the time."
MS. RYAN answered yes.
SENATOR WIELECHOWSKI said that language on page 2, line 2, says
the department "may" waive a portion of those costs and asked if
that is totally discretionary.
MS. RYAN answered that their process for cost recovery is
through an automated timekeeping billing system to which staff
charges their time to certain codes. The cost recovery option
would be turned off in the situations that meet these criteria.
So, there is no discretion.
SENATOR WIELECHOWSKI asked if there is a reason to not use
"shall waive" instead of "may waive." The same question for "all
or a portion:" how would that be decided?
MR. RYAN answered they wanted some flexibility for unforeseen
situations and she prefers to keep the flexibility, because
another bill with a capital appropriation would allow them to
also provide financial resources to home owners who meet
hardship criteria (that is already in regulation) to do some
clean up. In one home it might be monitoring vapor that might be
going into a child's room and another home might need more
extreme measures.
SENATOR WIELECHOWSKI asked if this should be needs-based,
because a millionaire can afford it and if there should be
requirements for a homeowner to go through their homeowner's
policy or file a negligence case against the prior owner or
something like that.
4:39:16 PM
MS. RYAN replied that current language inherently captures
needs-based homeowners and repeated that they are only looking
to provide this to small home owners not commercial operators.
MS. RYAN said a lot of costs are associated with these events
and she assumed a homeowner would be contacting insurance
companies and the responsible party for the release already.
She said a lot of things are actually discovered during sales
transactions and that is when previous owners can be pursued
through court mechanisms. This proposal in no way hampers a
homeowner from doing that. They have found that no homeowners
insurance covers the costs associated with this unless the
contamination leaves their property and impacts other people's
property.
SENATOR WIELECHOWSKI said language on page 2, lines 8-10,
requires a written finding that the person did not willfully or
negligently fail to comply with spill prevention and he could
envision someone who had a spill and sells his property to
someone else for a dollar and then the state picks up the cost,
because, then, technically the person who owns the property
isn't negligent; it's the person before them.
MS. RYAN said that reminded her of their other bill, SB 64,
which is a uniform criminal covenants act, so that there is full
disclosure when contaminated property is transferred. If a
purchaser receives contaminated property and they didn't know
it, they would pursue that individual through the judicial
system.
4:42:22 PM
SENATOR VON IMHOF asked if everyone will automatically be
granted the waiver initially, at least for a certain threshold
amount.
MS. RYAN answered yes; their billing will stop automatically.
Staff won't even know when bills are going out.
4:43:32 PM
SENATOR VON IMHOF noted that this bill is retroactive to January
1, 2018, and a DEC document says in 2017 there were 50 of these
types of spills, but there are currently 150 active sites that
would be eligible. So, she wanted to know if they are going back
earlier or if these are ongoing sites for the last couple years.
MS. RYAN replied they have been ongoing and that these sites
usually take quite a long time to resolve. The sites that
happened several years will not get reimbursed.
SENATOR VON IMHOF said but starting from now they will not be
charged.
MS. RYAN said that was correct.
SENATOR VON IMHOF said the fiscal note says the regulations
won't be written until 2020 and asked why so long from now.
MS. RYAN replied that they will be written as soon as the bill
becomes law if it becomes law. They needed a window of time, but
it won't take that long.
CHAIR GIESSEL noted that regulations will be adopted by 2020 and
the process takes a while because of public comment once they
are written.
4:45:25 PM
SENATOR MEYER recalled that their operating budget is small and
asked if they can absorb a $60,000 reduction.
MS. RYAN replied the way their budget works, the revenue
collected through cost recovery goes into the fund, and the
legislature allocates a certain percentage of that fund every
year for the division's operations. It will not impact their
annual operating budget, but it will reduce what goes into the
overall account they draw from over the years.
SENATOR MEYER said he may be thinking more on the commercial
side of things, but typically whoever caused the spill should be
paying the cost of cleanup. It could be a half-million-dollar
home or a hundred-thousand-dollar home. "We want them to be
responsible homeowners and take care of their heating oil tanks,
etc." He asked if the bill is taking some of that responsibility
away from homeowners by offering this program.
MS. RYAN didn't agree and said homeowners are usually caught
off-guard when this occurs. A lot of times it is out of their
control; if it's an underground storage tank they may not have
even been aware of it. They are still taking the bulk of the
burden on by cleaning up the spill. Helping them figure out how
to do that is a minimal "give" from the department.
SENATOR MEYER asked how much a typical clean-up costs.
MS. RYAN replied the lowest she has seen is $6,000 for a
cleanup, but it can get up to over $80,000.
SENATOR MEYER asked if it cost $80,000 would DEC share that
responsibility with the homeowner.
MS. RYAN replied that the homeowner still has to pay all of
that. This bill would say that DEC doesn't have to ask the
homeowner to reimburse it for their time to just help them
figure it out. Her part of that $80,000 might be $2,000 or
$4,000 of staff time helping them respond.
She said that several years ago the legislature passed a bill
adding a tax for refined fuels and she feels they are now
contributing to pay their costs when they purchase that fuel.
4:49:49 PM
SENATOR MEYER said whenever the legislature starts a new
constituency, it tends to grow, and asked if this would apply to
septic tanks or water-well contamination. Does DEC garnish the
Permanent Fund dividend if people can't pay?
MS. RYAN answered no. The department doesn't bill for providing
technical assistance for other things like septic tanks and well
contamination. SPAR is the only division that charges for cost
recovery; all other divisions in the department don't bill for
providing technical assistance.
4:51:19 PM
SENATOR BISHOP asked of the 60 annual releases were any caused
by the fuel carrier.
MS. RYAN said she didn't know, but that is a potential scenario.
She added that they probably don't know about 30 percent of
releases.
SENATOR BISHOP asked if they trying to encourage more reporting.
MS. RYAN answered yes.
SENATOR BISHOP said so the department can use its mitigation
expertise with the homeowner to properly clean up the oil.
MS. RYAN said yes. She gave him credit for asking the department
to focus more on prevention when they talked about the refined
fuel tax bill. This is one thing they think would help mitigate
the effects when spills occur for these homeowners.
She said they would like to adopt standards for home heating oil
tanks, but it is harder than anticipated because of the
variation in our climates and communities. However, she would
still like to adopt some siting standards for home heating oil
tanks, so that banks can use that for home inspections. Right
now, one can get an inspection for a drinking water system and a
waste water system, but there is no equivalent in the heating
oil tank world.
4:54:04 PM
SENATOR VON IMHOF asked if a homeowner calls DEC about a leak,
and decides it's way too costly to do it, does she have an
obligation to report them to some authority.
MS. RYAN replied it varies a lot. If there is a serious or
imminent threat to the environment they are obligated by statute
to fix it, but they use all their powers to get the homeowner to
at least stop the release and minimize the impacts to the
environment. If they cannot, which is not very often, SPAR will
step in to do it using the Response Account which is separate
from the prevention account. The department's obligation is to
recover its costs, so they will pursue for cost recovery if they
know the homeowner has the resources.
CHAIR GIESSEL said the fiscal note is a negative $60,000,
whereas another bill in another committee proposes to raise fees
on industrial spills by another $75,000. She asked if it is
coincidental that it would fill this gap.
MS. RYAN answered yes. The other bill is not about fees; it is a
penalty for non-compliance.
4:57:17 PM
FABBIENNE PETER CONTESSE, representing herself, Juneau, Alaska,
supported SB 158. She related a personal story about an
underground oil tank leak at her home in Juneau. She immediately
called DEC and staff came out with the information on what to do
in order to move forward. After mitigating the tank, they
started cleanup spending tens of thousands of dollars as well as
several thousand dollars on soil testing. None of these
expenditures are covered by homeowner's insurance. In 2017, they
started to receive bills from DEC for reviewing their case and
every time they responded to a DEC inquiry or asked for clarity
on any guidance they were given, they received a bill for that
contact.
MS. CONTESSE said she understands the state's financial
situation, but the current statute discourages homeowners from
reaching out to DEC. Regarding Senator Wielechowski's comments
about needs based, she personally is in a very fortunate
situation and can afford to spend thousands of dollars to clean
up this oil spill, but being billed by DEC every time they
looked at her case kept her from reaching out to get the
guidance she needed and to work collaboratively.
She said homeowners already pay a surcharge on heating fuel for
this fund and really believe in what DEC does. The people they
have worked with have been "top notch." Everyone's goal is the
same: to make sure that the environment is cleaned up.
5:01:43 PM
SENATOR STEDMAN asked how many gallons were involved in her
spill.
MS. CONTESSE replied that they had a 1200-gallon underground oil
tank and the house was built in 1981. She didn't know how many
gallons were spilled, maybe several hundred. Her property is
large and steep, and the seepage was moving downhill.
5:02:37 PM
SENATOR WIELECHOWSKI said he appreciated her testimony and he
didn't realize DEC was charging for making calls; that doesn't
seem right. He thought it might be related to how "response
costs" on page 2, line 2, was defined. He thought DEC was doing
the actual cleanup.
MS. CONTESSE responded that DEC came out to the house and
advised on the cleanup, which was basically slogging through
their property with oil absorbent boom and pads. They also came
out to the house and advised them on where to dig test holes
after eliminating all "free product." DEC staff came out to the
house but weren't doing the cleanup, and when they called or
when she sent emails, she was billed for it. But that is in the
statute; it wasn't the individuals at DEC deciding to do that.
That was frustrating for her, but also of the DEC staff.
5:04:39 PM
CHAIR GIESSEL thanked her and opened public testimony. Seeing
none, she closed it and held SB 158 in committee.