Legislature(1999 - 2000)
05/14/1999 02:15 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.