Legislature(1999 - 2000)
04/12/1999 01:40 PM Senate JUD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 110-PROPERTY ACQUIRED BY GOVT. ENTITY
SENATOR GARY WILKEN, sponsor of SB 110, explained the bill deals
with a municipality's responsibility for contaminated property it
receives as a result of tax delinquency. SENATOR WILKEN said he was
asked to bring the bill forward on behalf of the Fairbanks North
Star Borough (FNSB) which is faced with liability for "dirty
property."
SENATOR WILKEN stated federal law exempts state and local
government entities from liability for cleaning up contaminated
property when the property has been acquired by escheat, tax
delinquency, or foreclosure. He explained that tax foreclosure is
an obligatory action for a municipality faced with tax delinquent
property. Due to strict liability, municipalities are concerned
they may be held liable for preexisting contamination of foreclosed
lands and the significant environmental remediation costs those
properties incur.
SENATOR WILKEN stated SB 110 will change state law to mirror
federal law, and allow municipalities, in certain instances, to
hold title to contaminated land without liability for clean up.
Number 061
SENATOR HALFORD asked how the term "government entity" is defined.
He suggested the term be changed to "state governmental entity" so
the federal government would not be able to walk away from any
liability. SENATOR WILKEN said he is open to any change that
improves the bill, and stated it is not his intent to let the
federal government off the hook for contaminated federal lands.
CHAIRMAN TAYLOR asked if the federal government exempted themselves
from liability in these cases.
Number 110
MR. VIRGIL NORTON, testifying from Kenai, stated he does not oppose
the intent of SB 110. He said there is a lot of work that could be
done to strengthen the "innocent landowner" affirmative defense
against the current strict liability standard for property owners.
MR. NORTON said, in the case of dirty property, someone is going to
have to pay to clean it up. He suggested that the Environmental
Protection Agency (EPA) is a more appropriate agency to clean up
contaminated sites. MR. NORTON asked if SB 110 will result in
different treatment for governmental and commercial property
owners.
MR. NORTON concluded that SB 110 will have far-reaching
implications for all property owners in Alaska. He believes when a
land owner who comes into possession of contaminated property acts
responsibly, the state should assist him or her in finding the
person responsible for the release of toxins into the environment,
and hold that person responsible.
CHAIRMAN TAYLOR asked MR. NORTON if he has any specific amendments
to the bill. MR. NORTON said he had "a whole table full." CHAIRMAN
TAYLOR asked him to forward his suggestions to the committee.
Number 308
MR. NORTON said he would do that, and also come to Juneau and help
with SB 110.
MR. PAUL COSTELLO, from Fairbanks, indicated that Senator Wilken's
testimony accurately represented the concerns of the FNSB. He said
the FNSB hopes to extend liability protection to tax foreclosed
land acquired, so that it will not be responsible for the
preexisting condition of this land. MR. COSTELLO said the FNSB is
currently in possession of 14 pieces of contaminated property with
an estimated liability of 1.5 million dollars. He urged passage of
SB 110.
Number 352
CHAIRMAN TAYLOR asked MR. BRECK TOSTEVIN, the representative from
the Department of Law testifying from Anchorage, if the federal
government had exempted itself from liability. MR. TOSTEVIN said
the federal government held itself liable; the exemption from
liability exists only for state and local governments when property
is acquired through tax delinquency.
CHAIRMAN TAYLOR asked if the federal government is liable for
existing federal lands such as military bases. MR. TOSTEVIN
replied that is correct. The federal government waived its
sovereign immunity and assumed liability for military land.
Number 372
MR. FRANK MIELKE, chief right-of-way agent for the Department of
Transportation (DOT), proposed that the Department would like the
committee to broaden Subsection 5 of the bill to include any land
acquired by the state. He recounted laws other than the Statehood
Act under which the state has acquired land, including the Alaska
Native Claims Settlement Act, the Omnibus Act, and School Lands
Act, as well as other donated lands. He asked that the state not be
held to the strict liability standard for those lands.
SENATOR HALFORD said he has no problem granting immunity to a
municipality for land that is involuntarily transferred to it.
However, the strict liability standard was created by state law and
to exempt the state from it would be unfair to the private sector.
Number 410
MR. MIEKLE said that strict liability for the state denotes
ultimate liability, meaning the state ends up paying for the entire
cleanup even when the state can find fault with the previous owner.
SENATOR HALFORD asked why the state would not go after the guilty
party for damages. MR. MIELKE said it is difficult to find the
responsible party. Additionally, sometimes these parties, when
found, are "judgment proof." MR. MIELKE concluded that sometimes
"the cost of pursuing all of the various people to get the ultimate
liability on somebody else, was more than the cost of the cleanup."
SENATOR HALFORD asked Mr. Mielke what effect the exemption he
requested would have. MR. MIELKE replied, "We probably would have
gone to DEC . . . or to EPA and said 'This is a cleanup problem,
please clean it up. Instead, we were stuck with the cleanup on
it.'"
SENATOR HALFORD replied, "So you're asking us for a change that
would stop the state from cleaning up the mess?" He said that is
what other property owners are faced with, because the state
decided the cleanup was so important it had to be done.
Number 443
MR. MIELKE said DOT explored the option of taking the cleanup fee
out of the condemnation proceeds, but the Alaska Superior Court
denied that. SENATOR HALFORD said he does not disagree with MR.
MIELKE's point; it is simply contrary to the principle of strict
liability.
CHAIRMAN TAYLOR asked MR. TOSTEVIN if he could comment on some
points made by MR. NORTON. MR. TOSTEVIN informed the committee
that MR. NORTON represents a client currently in litigation with
the state. Though unable to address MR. NORTON's comments
directly, MR. TOSTEVIN spoke generally about the statute and
explained that the law casts a wide net of liability for
contaminated property which encompasses everyone who has obtained
an economic benefit from the land in question. MR. TOSTEVIN said
this law was purposefully drawn broadly in order to find all
responsible parties and relieve the state from the burden of
cleanup costs.
Number 495
SENATOR HALFORD repeated his suggestion to add the word "state"
before "government" on page 2, line 2.
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