Legislature(1999 - 2000)
05/12/1999 01:52 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
CSSB 110(RLS) AM - HAZARDOUS SUBST. RELEASE: GOVT ENTITY CHAIRMAN KOTT announced the next item of business is CS FOR SENATE BILL NO. 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." Number 0840 ELIZABETH HAGEVIG, Legislative Administrative Assistant to Senator Gary Wilken, Alaska State Legislature, came before the committee and read the following sponsor statement: Senate Bill 110 will assist municipalities in performing their statutory duty to enforce liens for delinquent 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 preexisting 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. Senate Bill 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 or cleanup. Changes in the Senate also recognized the need to extend this courtesy to innocent land owners who are not directly responsible for contaminating the property that they have acquired. MS. HAGEVIG provided and distributed copies of proposed Amendment 1: Page 2, line 19, following "entity": Insert "A hazardous substance release shall be determined to have occurred as provided in this section." Page 2, line 21, following "leaching": Insert "or migration" Page 3, lines 4-10: Delete all material. Insert "costs under this section, a person who acquires a facility and who, upon discovering a release or threatened release on, in, or at the facility that occurred before acquisition of the facility, who had no reason to know that a hazardous substance was disposed of on, in, or at the facility, and who, upon discovering the release or threatened release, acted in accordance with (b)(2) of this section to begin operations to contain and clean up the hazardous substance, may not be held liable under this section unless the person has caused or contributed to the release or threatened release of the hazardous substance, in which case, the person is subject to liability under this section in the same manner as any other person. For purposes of this subsection, 'caused or contributed to the release or threatened release of the hazardous substance' (1) does not include the failure to prevent the passive leaching or migration at or from a facility of a hazardous substance in the air, land, or water that had first been released into the environment by a person other than the person that acquired the facility; (2) after the ownership or control of the facility has been acquired by the person includes (A) the spilling, leaking, pumping, pouring, emptying, injecting, escaping, or dumping of a hazardous substance from barrels, tanks, containers, or other closed receptacles; or (B) the abandonment or discarding of barrels, tanks, containers, or other closed receptacles containing a hazardous substance." Number 1011 LARRY DIETRICK, Acting Director, Division of Spill Prevention and Response, Department of Environmental Conservation, came before the committee to testify. He thanked the sponsors, and the "folks" from Fairbanks, for their assistance in clarifying the language. He said both the Department of Environmental Conservation and the Department of Law support the proposed language in the amendment and the legislation. Number 1061 REPRESENTATIVE GREEN asked whether this is going to cause people to find this as a way out of their obligations. MR. DIETRICK replied the department doesn't believe so. The number of superfund sites have to be ranked high nation wide to be dubbed a superfund site on the national list. For example, Alaska Pulp in Sitka, in which case the state intervened to take over, was closed out of that site so the state wouldn't have to deal with the EPA [Environmental Protection Act]. The department is comfortable with that. Number 1118 REPRESENTATIVE GREEN said, "Let's back off from the superfund site, something real serious though." MR. DIETRICK asked Representative Green is his question whether or not there is a potential loophole here. REPRESENTATIVE GREEN replied in the affirmative. MR. DIETRICK added that they are comfortable with the language and that a loophole has not been created. Number 1156 REPRESENTATIVE MURKOWSKI referred to page 1, lines 9 and 10, of the proposed amendment, and asked Mr. Dietrick whether he is confirming that the release had to occur before an innocent third party came into ownership of property. REPRESENTATIVE JAMES said she is troubled with the language in the proposed amendment which refers to a person who acquires a facility and finds that there was a release or threatened release, and that person had no reason to know about that beforehand. She read the following text and inquired as to the location of (b)(2). ...and who upon discovering the release or threatened release, acted in accordance with (b)(2) of this section to begin operations to contain and clean up the hazardous substance, may not be held liable under this section unless the person has caused or contributed to the release or threatened release of the hazardous substance... Number 1286 MS. HAGEVIG replied, "We're not letting them off the hook to say, 'Well, just because you know it's there, and if the barrels are continuing to leak on the property it doesn't mean you don't have to take action to try and stop it." Number 1335 REPRESENTATIVE JAMES said what further disturbs her is that it continues to say, "may not be held liable under this section unless the person has caused or contributed to the release or threatened release of the hazardous substance," and in the effort to clean up, that might happen. She added that seems to discourage somebody from cleaning it up because that might happen. It's like a trap of some sort. Number 1380 ANNETTE KREITZER, Legislative Assistant, to Senator Loren Leman, Alaska State Legislature, came before the committee to testify. She noted that when the bill left the Senate, they thought there was agreement with all the parties who were concerned with it and then Craig Tillery, Assistant Attorney General [Environmental Section, Civil Division, Department of Law] reviewed the bill and alerted DEC to some concerns. She noted that they have been working with all the parties including Virgil Norton [private citizen from Kenai] to craft something that satisfies all the parties. She further explained the language in proposed Amendment 1, directly correlates with the language that protects the municipalities so basically, everybody is in the same boat. MS. KREITZER directed the committees' attention to page 1, line 17, and read the following text: For purposes of this subsection, "caused or contributed to the release or threatened release of the hazardous substance" does not include the failure to prevent the passive leaching or migration at or from a facility of a hazardous substance in the air, land, or water that had first been released into the environment by a person other than the person that acquired the facility... MS. KREITZER further stated their goal was to try to meet the concerns of DEC, Mr. Norton's concerns and the concerns of Senators who already voted on this bill as well as the Department of Law. REPRESENTATIVE GREEN asked whether Mr. Norton's concerns were addressed. MS. KREITZER replied yes. Although he would have preferred the other language, he indicated that he can live with this language. Number 1499 REPRESENTATIVE GREEN made a motion to adopt proposed Amendment 1, LS0360\SA.3, Cook, 5/12/99. There being no objection, it was so adopted. REPRESENTATIVE ROKEBERG asked whether the title needs to be amended. REPRESENTATIVE MURKOWSKI added that did come up in discussion and deferred the question to Ms. Hagevig. MS. HAGEVIG noted that she spoke with Tam Cook [Director, Legal and Research Services Division, Legislative Affairs Agency] who indicated that although this has not been tested in court, in her opinion these changes will not change the title of the bill. Number 1589 REPRESENTATIVE ROKEBERG asked whether the amendment is extending it to other people that are not [indisc.--simultaneous speech]. UNIDENTIFIED SPEAKERS unanimously replied private folks. REPRESENTATIVE ROKEBERG asked whether this meets EPA standards. UNIDENTIFIED SPEAKER replied yes. CHAIRMAN KOTT called an at-ease at 5:55 p.m. and called the committee back to order at 5:56 p.m. Number 1621 VIRGIL NORTON testified via a cell phone from Kenai. He said: I'm testifying to draw your attention to the very heart of the innocent land owner defense as it currently is set out in AS 46.03.822. This is a strict liability statute in that it affects every property owner in Alaska, and strict liability is no-fault liability created by statute because it defines obligations and responsibilities to escape liability for someone taking the innocent land owner defense. And my interest in SB 110 is really threefold. Number 1, I wanted to prevent any misinterpretation of the existing innocent land owner defense or to color the statute because my in-laws are going to court and I think they're going to be the test case of the statute as it exists so I don't really oppose what the local government entities are trying to do to obtain total immunity but I didn't want the existing statute (indisc.) colored it - if it worked as to effect the statute as it's written today. And number 2. I wanted to, in the work that I helped do over on the Senate side, my intention was to clearly define the word 'relief' and thereby strengthen the innocent land owner defense. And number 3. I wanted to always make sure that we're establishing liability relating to cost recovery issues squarely on the person responsible for the spill or the release into the environment. And in short, I support the version that's already crafted that the Senate - after several days finally passed 20-yeas and 0-nays. But the current definition of 'relief' contains key words 'into the environment'. An example of that is, once a person introduces a contaminate into the environment this person is liable to all others who would be affected and all others have a liability to stop or attempt to stop the spread or migration of a contaminant but they would direct their cost recovery efforts to the liable person as the person that was responsible for the spill... [Mr. Norton's cellphone was inadvertently disconnected.] REPRESENTATIVE ROKEBERG asked who submitted Amendment 1 and whether the committee can add to it. REPRESENTATIVE JAMES replied all parties involved. Number 1777 MR. NORTON continued. "Anyway, the issue here is liability both in cost recovery and the obligations that are obligatory in the statute to act responsibly to avoid incurring a liability for someone taking the innocent land owner to defense and that's why I support the version as it currently exists in the Senate version of SB 110. I will reluctantly support the House Judiciary's version if that's the only way it's going to go..." [Mr. Norton was disconnected again.] CHAIRMAN KOTT told Mr. Norton that the House Judiciary Standing Committee has reviewed the amendment and has adopted it as part of the package. MR. NORTON continued. "If you've done that then so be it. I actually like what was already there because - but we'll have to revisit this I suppose at another date, but I like the way it was originally wrote [written] because we defined 'relief' and it's an issue that concerns every property owner in Alaska. I wanted the liability directed only to the person that commits the act not just somebody that has a deep pocket." REPRESENTATIVE ROKEBERG asked whether adopting an amendment to include that definition would work. REPRESENTATIVE JAMES replied no. MR. NORTON added, "I don't mean to offend the Alaska Department of Law but they're not exactly world-renowned for their legal opinions." REPRESENTATIVE ROKEBERG referred to the amendment and asked how can there be a threatened release on something before an acquisition. REPRESENTATIVE JAMES answered that there could be a barrel of something with a hole at the top and nothing has leaked out yet. Number 1996 REPRESENTATIVE JAMES moved to report CSSB 110 (JUD) out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, it was so moved from the House Judiciary Standing Committee.