Legislature(2017 - 2018)BELTZ 105 (TSBldg)
02/28/2018 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB173 | |
| HB43 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 173 | TELECONFERENCED | |
| + | HB 43 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 173-LIABILITY: PESTICIDES & UTILITY POLES
1:47:14 PM
CHAIR COGHILL announced the consideration of SB 173. He listed
the individuals available to answer questions.
1:48:09 PM
SENATOR MICCICHE, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 173, said he introduced the legislation after an
employee from the Kenai National Wildlife Refuge did an
unscientific sampling and found residue of pentachlorophenol
("penta") around a power pole. The compound is used as an
insecticide to extend the life of these poles. Utility companies
worried that if they were asked to completely remove all 250,000
utility poles in the state, their potential exposure would be
about $7.5 billion. He continued the introduction speaking to
the following sponsor statement:
The bottom-line purpose of my choice to bring SB173
forward is the financial protection of nearly every
Alaskan ratepayer who depends upon a utility to
deliver electricity to their home, business or
facility. SB173 conforms Alaska law to federal law
with respect to wood poles treated with pesticides
registered with the Environmental Protection Agency.
The legislation is drafted narrowly to apply only to a
"wood utility pole installed, removed or used by
public utilities in connection with providing a
utility service in the state."
In the State of Alaska, every wooden utility pole is
factory-treated with a preservative/pesticide which
prolongs the service life of the pole by protecting it
from organisms that compromise structural integrity.
It is logical to assume that soil coming in direct
contact with treated utility poles for 30 or more
years would include traces of that preservative.
The provisions of AS 46.03.822(a) are interpreted to
assume public utility liability and indirectly,
Alaskan ratepayers for remediating residual
preservative when replacing or removing treated wooden
utility poles. This liability does not exist under
federal law because the companion federal statute to
AS 46.03.822 contains a specific exemption for "the
application of a pesticide product registered under
the Federal Insecticide, Fungicide, and Rodenticide
Act [7 U.S.C. 136 et seq.]."
SB 173 clarifies and eliminates the assumption of
liability and remediation costs for trace elements by
including the federal exemption within Alaska's
statutes.
SENATOR MICCICHE said the expectation is that the Department of
Environmental Conservation (DEC) will provide best practice
guidelines for use requirements and disposal of preservative-
treated utility poles to control or eliminate future
contamination when poles are retired.
He expressed appreciation that the committee requested the
additional referral because it's important that the liability
matches that under the federal code. There is no desire to
account for liability beyond that point.
1:51:13 PM
SENATOR WIELECHOWSKI asked what provision in FIFRA exempts the
federal government from liability.
SENATOR MICCICHE deferred the question to DEC or the legislative
drafter, Emily Nauman.
1:52:23 PM
SENATOR COSTELLO asked if SB 173 takes the same approach that
other states facing this issue have taken.
1:54:20 PM
DAVID WILKINSON, Assistant Attorney General, Civil Division,
Environmental Section, Department of Law, Anchorage, Alaska,
advised that the exemption under federal law is found in
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) Section 107 (i) [42 U.S.C. 9607(i)]. That
exemption applies to registered pesticides broadly, not utility
poles specifically. It exempts the application of a pesticide
that has been registered under the Federal Insecticide,
Fungicide, and Rodenticide Act (FIFRA) from liability under
CERCLA. The provision includes savings language that provides
that it does not affect or modify other statutory or common law
obligations.
SENATOR WIELECHOWSKI read the first sentence of 42 U.S.C.
9607(i) into the record:
(i) Application of a registered pesticide product
No person (including the United States or any State or
Indian tribe) may recover under the authority of this
section for any response costs or damages resulting
from the application of a pesticide product registered
under the Federal Insecticide, Fungicide, and
Rodenticide Act [7 U.S.C. 136 et seq.]. [Nothing in
this paragraph shall affect or modify in any way the
obligations or liability of any person under any other
provision of State or Federal law, including common
law, for damages, injury, or loss resulting from a
release of any hazardous substance or for removal or
remedial action or the costs of removal or remedial
action of such hazardous substance.]
He said his staff found that courts have interpreted that as the
actual application of the pesticide on poles or somewhere else.
He asked Mr. Wilkinson if he had a different understanding of
the courts' interpretation.
MR. WILKINSON said no. The focus is on the application, which is
the intended use of a pesticide. The way federal case law has
played out is if the pesticide is intended to be sprayed on one
plant and it drifts onto a nearby property, that drift is not
the application of the pesticide that is shielded under CIRCLA.
Only the intended use of the pesticide is shielded.
SENATOR WIELECHOWSKI read the second sentence of 42 U.S.C.
9607(i) into the record:
Nothing in this paragraph shall affect or modify in
any way the obligations or liability of any person
under any other provision of State or Federal law,
including common law, for damages, injury, or loss
resulting from a release of any hazardous substance or
for removal or remedial action or the costs of removal
or remedial action of such hazardous substance.
He said his understanding is that the federal law only provides
an exemption for the actual application of the pesticide, but it
doesn't shield the product from any laws states or the federal
government have adopted in that regard. He asked if it's fair to
say that Alaska is not out of compliance.
MR. WILKINSON said he agreed with that reading of the provision.
CHAIR COGHILL said the bill is before the committee to make that
determination.
SENATOR COSTELLO asked Ms. Nauman if this legislation was based
on model law.
1:59:27 PM
EMILY NAUMAN, Legislative Counsel, Legislative Legal Services,
Alaska State Legislature, Juneau, Alaska, said she was not aware
of that, but she would look into it.
CHAIR COGHILL requested she send her response to both his office
and the sponsor's.
SENATOR WIELECHOWSKI read AS 09.65.085(a) and opined that it
gives utility companies the liability exemption they're looking
for. He asked if she or Mr. Wilkinson have a different
interpretation.
MR. WILKINSON said he would need to do additional research
before he answered.
2:01:49 PM
SENATOR MICCICHE clarified that application is not spraying the
pesticide. "The application is the use of the pesticide so
there's a little misunderstanding there." He restated that he
introduced SB 173 because he doesn't want there to be a need for
a cleanup of the 250,000 poles in the state if they have residue
of penta around the poles for a reasonable distance. There is no
intent to entirely absolve liability. The intent is to find the
right mix of liability that protects the normal, intended use
and application of penta.
CHAIR COGHILL asked Senator Wielechowski to restate his question
for Ms. Nauman.
SENATOR WIELECHOWSKI said he doesn't believe that current state
law is at odds with the federal law 42 U.S.C. 4607(i) regarding
the application of registered pesticides. The exemption under
CERCLA applies to the application of pesticides that are
registered under FIFRA. The second sentence of 42 U.S.C. 4607(i)
specifically gives states and the federal government the right
to enact whatever laws they wish on this topic.
2:04:51 PM
MS. NAUMAN said she would need to examine CERCLA more closely
before giving a response.
CHAIR COGHILL asked what remedy would be available if the bill
passes and people had trouble with penta residue on their
property.
2:05:46 PM
MR. WILKINSON said other remedies are likely to survive
exemption to AS 46.03.822 with two caveats, but it isn't clear
how an exemption to .822 would alter those common law remedies.
Also, common law remedies are not direct substitutes for AS
46.03.822. Some federal district courts have held that CERCLA
preempts federal common law causes of action that are subsumed
under the structure of CERCLA. However, in the pesticide context
the FIFRA exemption in CERCLA section 107(i) expressly preserves
those other statutory rights in common law, causative action.
He said he hasn't found similar case law in Alaska looking at
the impact of .822 on common law claims. The Alaska Supreme
Court has analyzed common law causes of action, which is
negligence, nuisance, and trespass alongside .822 causes of
action but hasn't squarely addressed whether .822 preempts those
common law claims. There is a question there and about the
interplay between a statute and common law in these more
traditional claims.
One example of this interplay is in the negligence context.
Negligence cause of action, which would arguably survive for a
landowner, requires duty, breach of duty, causation, and harm.
But when courts look to find a duty, they look to statutes so
there's a question raised by an exemption to .822. Does that
alter the duty that a utility company might owe a landowner?
They're exempt from liability for release of hazardous
substances under a statute. Whether that changes the duty that
they have to landowners is potentially a litigation question.
CHAIR COGHILL commented that the clearer we can speak in this
statute, the better for common law remedies.
MR. WILKINSON agreed that clarity in the statute would lessen
the argument that an exemption changes the common law somehow.
CHAIR COGHILL asked Ms. Ryan who a private individual would go
to if they found pollution on their property that contaminated
their well.
2:10:23 PM
KRISTIN RYAN, Director, Spill Prevention and Response,
Department of Environmental Conservation (DEC), Anchorage,
Alaska, said Mr. Wilkinson expressed that there are some
unknowns as to how a court would interpret liability in that
scenario. DEC would eliminate the exposure pathway by providing
a drinking water source if the chemicals were carcinogenic when
consumed but deciding who would pay for that or who would remedy
the problem is a little murky. Based on the language, she
guessed that the utility company would not be liable, and the
homeowner probably would not be liable. It is clear that the
state would be obliged to use its resources to remedy the
problem.
CHAIR COGHILL asked if there has ever been a problem in Alaska.
MS. RYAN said not that she was aware of.
CHAIR COGHILL asked if she had experience with any of these
common law remedies.
MS. RYAN said joint and several liability statutes are very
clear that all the parties that spilled the contaminant are
responsible, as well as the land owner who inherited the
contaminated property. She was not aware of any broad
exemptions; this would be the first.
CHAIR COGHILL asked if contamination of groundwater [from
residue around a power pole] was likely or highly speculative.
MS. RYAN said contamination of a private drinking water well
from utility pole residue has not occurred in Alaska, but she
was aware of it happening in one other state. The chance of this
occurring is remote, but the question is what would occur if it
did happen. DEC is working with industry to develop best
management practices to minimize any migration of chemicals from
the utility poles into an aquifer. DEC's focus has always been
to be proactive instead of dealing with the problem after the
fact.
2:16:26 PM
CHAIR COGHILL asked if DEC defines minimal standards for other
contaminants instead of a blanket exemption.
MS. RYAN said she was unaware of any exemptions in the liability
statutes, but the department believes that a minimal amount of
leaching around a utility pole is to be expected and would not
be a large concern. She suggested that if that was the utility
companies' concern, it should be clearly stated in the
legislation. That would provide the companies some relief and
wouldn't tie the department's hands to deal with a significant
contamination event.
2:18:03 PM
SENATOR WIELECHOWSKI summarized that the bill exempts both the
utility company and the homeowner from liability. He asked if
she interprets the language in Section 1 regarding liability of
persons to include the state.
MS. RYAN agreed with the summary and that the Department of
Labor and Workforce Development (DOLWD) would meet the
definition in Section 1. She added that even though liability
would not fall to DOT, DEC would need to utilize some funds to
eliminate the exposure pathway so that human health isn't
impacted.
SENATOR WIELECHOWSKI said he didn't want utility companies to
replace 250,000 poles but somebody must be responsible if there
is significant contamination. He asked her to think about an
amendment he was working on that adds a paragraph under
subsection (b) in Section 1. It basically says, "there is no
liability as long as the release does not contaminate soil,
surface water or ground water beyond the radius depth and
concentration specified by the Department of Environmental
Conservation." The amendment goes on to determine by regulation
what radius depth and concentration would potentially lead to
the harm of public safety or welfare.
CHAIR COGHILL asked if contamination is measured in parts per
million or if each pesticide is considered based on the latest
health bulletin.
MS. RYAN replied DEC relies on the numbers in regulation
regarding what is safe for dioxins in different receiving
environments and human health. She also pointed out that while
penta is approved for use on utility poles, it is not the main
chemical of concern for leaching. It is dioxin, which is a
byproduct of the manufacturing process. The EPA talks at great
length about that in the record of decisions approving its use
in these situations.
CHAIR COGHILL asked if she had any comment on Senator
Wielechowski's proposed amendment.
MS. RYAN replied the department has been considering a similar
improvement to the legislation. Setting a minimal level of
contamination as acceptable would require the department to be
very specific in its regulations, but before they could be
drafted more information is needed to understand where the
chemicals are migrating and how far.
2:23:57 PM
SENATOR WIELECHOWSKI asked if a homeowner would be required to
disclose when they sold their property that utility poles in the
right-of-way on their property were leaching pesticides or
dioxins.
MS. RYAN said a homeowner would be required to disclose that
information if they were aware of it, but she would assume most
homeowners would not have that information.
CHAIR COGHILL said he'd like to hear from utility companies at
this point.
2:25:41 PM
ERIC FJELSTAD, Attorney, Perkins Coie LLP, Anchorage, Alaska,
said he was testifying in support of SB 173 on behalf of the
Homer Electric Association. He said he would offer the utility
company's perspective on the issues that have been raised
focusing on the state liability scheme under AS 46.03.822 and
comparing it to the federal liability scheme under the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). He said he agrees with Senator
Wielechowski that this isn't a question of the state being out
of compliance with federal law. The question is what the state
should do as a matter of policy because it does have latitude.
Section 107 (i) of CERCLA says that if a pesticide has been
registered and approved by EPA, then CERCLA cannot be used to
require an investigation and cleanup of that pesticide. Similar
provisions in CERCLA apply to other situations such as federal
air or water permits and consumer product exception for
asbestos. The policy issue is that while these products may be
harmful, when they are used properly Congress through CERCLA
should not create a liability scheme where something is used
pursuant to its intended use. AS 46.03.822 is modeled on CERCLA
and proposes to include pesticides in the state liability
scheme.
MR. FJELSTAD said he was highly confident that these pesticides
would fall within the exemption under CERCLA because the
exemption in federal law is being actively regulated by another
federal scheme. It's not just Congress making an exemption that
some particular person or industry shouldn't be liable. This
goes to Senator Coghill's question about whether this has been a
problem in the past. It hasn't been a problem because the
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) is
actively regulating how these materials can be applied in
practice.
He explained that the utility companies are concerned because
the question about pesticide leaching was raised in the one
instance and there is an affirmative obligation for any party
that is aware of a release to report it to DEC and that starts
the cleanup process. There are hundreds of thousands of poles in
the state and the question is whether the utility companies must
go out and prove a negative, that there is nothing there or that
it's de minimis.
2:31:01 PM
CHAIR COGHILL asked if the general liability in existing statute
would apply in this situation.
MR. FJELSTAD said he would like to say it applies but he would
be nervous doing so given that the courts generally construe
exceptions to liability narrowly.
SENATOR WIELECHOWSKI asked what liabilities would be available
to homeowners or affected individuals if the bill were to pass
as currently drafted.
MR. WILKINSON said common law exceptions are likely to survive,
but the Alaska Supreme Court has not directly addressed the
question of whether AS 46.03.822 has an impact on the survival
of common law claims. Chapter 46.03 does have the regulation of
hazardous substances including the prohibition of releasing
hazardous substances without a permit and prohibitions on
pollution.
SENATOR COSTELLO asked if there is higher liability regarding
utility easements near school grounds.
MR. WILKINSON said AS 46.03.822 doesn't change the liability
based on the vulnerability of people who might be injured.
CHAIR COGHILL commented that it's an interesting question when
school yards are often paved with asphalt.
2:37:55 PM
MICHAEL ROVITO, Director of Member and Public Relations, Alaska
Power Association, Anchorage, Alaska, stated support for the CS
for SB 173. He said large and small utility companies throughout
Alaska utilize the pesticide pentachlorophenol on the hundreds
of thousands of utility poles they own throughout the state. Use
of this pesticide is regulated under the Federal Insecticide,
Fungicide, and Rodenticide Act (FIFRA). In 2008, the U.S.
Environmental Protection Agency reregistered penta after issuing
a report that found the benefits of penta outweighed any
remaining risks. The FIFRA regulations ensure that using the
pesticide according to specification will not cause unreasonable
adverse effects on the environment. SB 173 ensures that the
pesticide on utility poles is properly regulated as pesticide
use and not spills. This is an important distinction missing in
Alaska law. The bill also provides that the use of penta on
utility poles will be regulated under Alaska's pesticide control
program under FIFRA instead of under DEC's Division of Spill
Prevention and Response.
2:40:40 PM
CHAIR COGHILL said he intended to look into Alaska's pesticide
control program under FIFRA.
2:41:45 PM
SENATOR MICCICHE said his office has worked with DEC throughout
this process to find the right balance on liability. This is
about protection of Alaska ratepayers.
SENATOR BISHOP said he doubts there would be a spill from these
poles, but there could be an inadvertent release.
SENATOR MICCICHE said there have only been two incidents in the
history of the use of penta and he assumes that the penta was
improperly applied during manufacture.
CHAIR COGHILL commented that even that would be identified as
leaching, not a spill.
SENATOR BISHOP added that Kristen Ryan has a calculation for
what is a reportable spill and what is not.
SENATOR MICCICHE reiterated that he wanted to get the right
balance.
2:45:21 PM
CHAIR COGHILL held SB 173 in committee.