HOUSE FINANCE COMMITTEE March 17, 1994 1:30 P.M. TAPE HFC 94 - 65, Side 2, #000 - end. TAPE HFC 94 - 66, Side 1, #000 - end. TAPE HFC 94 - 66, Side 2, #000 - #431. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Dana Zimmerman, Retirement and Benefits, Department of Administration; Theresa L. Bannister, Legal Counsel, Division of Legal Services, Legislative Affairs Agency; Stephen White, Assistant Attorney General-General Civil Section, Department of Law; Mary Sansome, Assistant Attorney General-General Civil Section, Department of Law; Mary Nordale, Attorney, Robertson, Monagle & Eastaugh, Juneau; Jim Clark, General Counsel, Alaska Forest Association, Juneau; Avrum Gross, Attorney, Juneau. SUMMARY SB 178 An Act relating to civil nuisance actions; and providing for an effective date. SB 178 was HELD in Committee for further discussion. SENATE BILL 178 "An Act relating to civil nuisance actions; and providing for an effective date." Representative Therriault provided the Committee with a House draft for CS SB 178, 8-LS0930\I, Bannister, 3/17/94. [Copy on file]. 1 THERESA L. BANNISTER, LEGAL COUNSEL, DIVISION OF LEGAL SERVICES, LEGISLATIVE AFFAIRS AGENCY, explained the changes made from the previously adopted committee substitute, 8- LS0930\D, Bannister, 2/12/94. Representative Therriault remarked that the potential constitutional problem of the "retroactive provision" was addressed by the addition of a separate clause clarifying the constitutionality of the bill for the courts. This retroactive provision will become part of the pending lawsuit. STEPHEN WHITE, ASSISTANT ATTORNEY GENERAL-GENERAL CIVIL SECTION, DEPARTMENT OF LAW, remarked that the committee substitute would recognize the constitutionality of the "takings" issue. Although, he added, with regard to public "takings", the State may be held liable. Mr. White noted that the Department of Law provided the working group an amendment which was not incorporated into the committee substitute. [Copy on file]. The amendment would have required a permit, which allows immunity from suit, that the permittee not create emission which would cause a nuisance. The placement of that language would be Section B-2(c) in order to immunize a facility. The purpose of the language would further clarify the legislation's intent. Representative Therriault advised that the permit currently requires that authority. Mr. White disagreed stating that the permits do not specify those conditions although they are implied. MARY NORDALE, ATTORNEY, ROBERTSON, MONAGLE & EASTAUGH, JUNEAU, responded to Assistant Attorney General White's testimony. She referenced A.S. 18 AAC 50.110, stating that it indicates that air pollution requires a provision of permit. [Copy on file]. She added that the amendment was unnecessary to the proposed legislation. Representative Brown questioned if there would be an impact to the permitting process without the amendment. Ms. Nordale advised that the regulation states that no person may emit an air omission which would constitute injury to human health. That language is currently in regulation. The definition of pollution is contained in Alaska Statutes, Title 46. She added that the provision proposed by the Department of Law would require a massive effort in rewriting permits. Representative Brown asserted that proper procedure has not been followed in preparation of the proposed legislation and 2 that private interest groups have received more current access to the legislation than the Minority. She referenced a memo received from Mary Nordale to Marie Sansome, Department of Law, written 3/15/94. [Copy on file]. Representative Therriault advised that the committee substitute had been made available to all members upon receipt. Representative Brown asked who authorized to exclude the amendment provided by the Department of Law. Ms. Nordell clarified that the regulations of the Department of Environmental Conservation (DEC) require a "showing" by the applicant for the permit that the air emissions, waste water or solid waste discharge would not constitute pollution or a nuisance. She added that this would be an explicit requirement of the permit and would be required by the proposed amendment. Discussion followed regarding the amendment provided by the Department of Law. Representative Brown referenced a memo received from John Stone, Department of Law, dated 3/09/94, which stated that the public process has never addressed "nuisance", or provided an average individual protective standards from nuisance. [Copy on file]. (Tape Change, HFC 94-66, Side 1). Co-Chair MacLean MOVED TO RESCIND previous action on adoption of committee substitute 8-LS0930\D, Bannister, 2/12/94 as the version before the Committee. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to adopt committee substitute 8- LS0930\I, Bannister, 3/17/94, as the current version before the Committee. There being NO OBJECTION, it was adopted. Co-Chair MacLean MOVED to adopt Amendment #1 as proposed by the Department of Law. Representative Therriault questioned the impact on the legislation. JIM CLARK, GENERAL COUNSEL, ALASKA FOREST ASSOCIATION, JUNEAU, advised that the Department of Law did not consider the amendment a condition of the permit, but instead required that the applicant make a "showing". The language currently included in the committee substitute requires that the word "pollution" continues to be defined so as to prevent a nuisance. Representative Brown pointed out that at this time the language is not required because the law contains explicit definition of what constitutes a "nuisance". Representative Brown stressed that the proposed legislation should clearly define the provisions of the permitting process. Mr. Clark 3 disagreed, stating that language exists. The "showings" are required and the applicant must pay for them as part of the permit condition. Discussion followed regarding the position of the "showing" language in the legislation. AVRUM GROSS, ATTORNEY, JUNEAU, elaborated that the proposed legislation was brought before the Committee although the permit process presently provides for a forum, whereby adjoining property owners can make clear what claims exist for the permittee. He advised that the bill is retroactive and would attempt to protect a corporation who has a permit, and which did not go through the process. Mr. Gross questioned the fairness to the injured party, those who have not had their rights adjudicated and would be forbidden from suing even though they have never been heard. Mr. Gross emphasized that the legislation is unfair. He urged the Committee to adopt Amendment #1. MARIE SANSOME, ASSISTANT ATTORNEY GENERAL-GENERAL CIVIL SECTION, DEPARTMENT OF LAW, advised that the environmental standards and the permitting process are designed to protect a public nuisance and that injuries would be to the public at large and not the specific private property owner. Many of the environmental standards are based on the type of equipment available to control pollution and not necessarily what the impact of the charge would be. She added, that many federal permits focus on technology standards, consequently, a permit may not address the impact to the private land owner. Ms. Sansome pointed out that many of DEC's permits are issued to private individuals and very small businesses. These individuals would not be able to afford the types of "showings" requested. Representative Hanley asked if the legislation would address a violation of the Department's statute. Ms. Sansome replied, that type of provision would be effective in nuisance suits when the discharge was specifically authorized in the statute, although she thought it unlikely that a general regulation or statute would operate on a nuisance suit. Discussion followed regarding the parameters of the word "and", Page 1, Line 10. Representative Brown questioned if the Department should consider whether the permitted activity would cause a private nuisance. Representative Hanley commented that public interest impacts private interest and that consideration must be given to both interests as well as protection to those who have to go through that process. Representative Brown disagreed advising that the legislation would create a potential liability for the State. 4 Mr. White interjected that the amendment would provide greater clarity in the permitting process. Representative Therriault OBJECTED to adoption of Amendment #1. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Brown, MacLean, Larson. OPPOSED: Hanley, Martin, Parnell, Therriault, Grussendorf. Representatives Navarre and Foster were not present for the vote. The MOTION FAILED (4-5). Representative Brown MOVED to adopt Amendment #2. Representative Therriault OBJECTED stressing that the language was too broad. Representative Brown explained that Amendment #2 would apply to Page 3, Line 5 and would insure that property owners, whose rights would be affected by the issuance of a permit, would be given notice as part of the process in order that this situation would be considered. Representative Parnell pointed out that public notice is provided for all permitting actions. Ms. Sansome disagreed stating that public notice is not given on small permits. (Tape Change, HFC 94-66, Side 2). Ms. Bannister stated that when something is authorized by statute or regulation, it would be shielded by option (1), Page 1, Line 12. Representative Brown asserted that there are permits which could be issued and would authorize the discharges. The public would have no opportunity to know that this would be occurring. Ms. Sansome added that A.S. 46.03.110 requires notice for DEC's waste disposal permits, however, it would not cover other items proposed. Representative Therriault understood that other concerns would be in compliance under (2), Page 1, Line 13. Ms. Sansome reiterated that administrative orders are not always authorized for public hearings. Mr. Clark interjected that there are a number of permits currently issued in which there is no requirement for public notice. He stated that the legislation specifically requires, after a public hearing, the intent would be made public and notice would be given. Discussion followed regarding the public hearing and public notice process. A roll call vote was taken on the MOTION to adopt Amendment 5 IN FAVOR: Hoffman, Navarre, Brown, MacLean. OPPOSED: Martin, Parnell, Therriault, Grussendorf, Hanley, Larson. Representative Foster was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to withdraw Amendment #3. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to withdraw Amendment #4 which is contained in Section (f). There being NO OBJECTION, it was so ordered. Representative Brown MOVED to adopt Amendment #5 to Page 3, Lines 12-14. Representative Therriault OBJECTED. Representative Brown commented that the legislation would not be good public policy and would result in a lawsuit with the retroactive clause. The amendment would add language to make such a process more difficult. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Brown, Hoffman, Larson. OPPOSED: Martin, Parnell, Therriault, Grussendorf, Hanley, MacLean. Representative Foster was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to adopt Amendment #6 which would change the effective date with the intent to give time to the court to dispose of the lawsuit which is currently pending. Representative Therriault OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Brown, Hoffman. OPPOSED: Parnell, Therriault, Grussendorf, Hanley, Martin, Larson, MacLean. Representative Foster was not present for the vote. The MOTION FAILED (3-7). Representative Brown MOVED to withdraw Amendment #7. There being NO OBJECTION, it was so ordered. 6 Representative Therriault MOVED to report HCS CS SB 178 (FIN) out of Committee with individual recommendations. Representative Brown OBJECTED stressing that the proposed legislation was a violation of private property rights. She emphasized that her concerns were not addressed and asked to have more time to read the proposed committee substitute. SB 178 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:25 P.M. HOUSE FINANCE COMMITTEE March 17, 1994 1:30 P.M. TAPE HFC 94 - 65, Side 2, #000 - end. TAPE HFC 94 - 66, Side 1, #000 - end. TAPE HFC 94 - 66, Side 2, #000 - #431. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 1:30 P.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Foster ALSO PRESENT Dana Zimmerman, Retirement and Benefits, Department of Administration; Theresa L. Bannister, Legal Counsel, Division of Legal Services, Legislative Affairs Agency; Stephen White, Assistant Attorney General-General Civil Section, Department of Law; Mary Sansome, Assistant Attorney General-General Civil Section, Department of Law; Mary Nordale, Attorney, Robertson, Monagle & Eastaugh, Juneau; Jim Clark, General Counsel, Alaska Forest Association, Juneau; Avrum Gross, Attorney, Juneau. SUMMARY SB 178 An Act relating to civil nuisance actions; and providing for an effective date. SB 178 was HELD in Committee for further 7 discussion. SENATE BILL 178 "An Act relating to civil nuisance actions; and providing for an effective date." Representative Therriault provided the Committee with a House draft for CS SB 178, 8-LS0930\I, Bannister, 3/17/94. [Copy on file]. THERESA L. BANNISTER, LEGAL COUNSEL, DIVISION OF LEGAL SERVICES, LEGISLATIVE AFFAIRS AGENCY, explained the changes made from the previously adopted committee substitute, 8- LS0930\D, Bannister, 2/12/94. Representative Therriault remarked that the potential constitutional problem of the "retroactive provision" was addressed by the addition of a separate clause clarifying the constitutionality of the bill for the courts. This retroactive provision will become part of the pending lawsuit. STEPHEN WHITE, ASSISTANT ATTORNEY GENERAL-GENERAL CIVIL SECTION, DEPARTMENT OF LAW, remarked that the committee substitute would recognize the constitutionality of the "takings" issue. Although, he added, with regard to public "takings", the State may be held liable. Mr. White noted that the Department of Law provided the working group an amendment which was not incorporated into the committee substitute. [Copy on file]. The amendment would have required a permit, which allows immunity from suit, that the permittee not create emission which would cause a nuisance. The placement of that language would be Section B-2(c) in order to immunize a facility. The purpose of the language would further clarify the legislation's intent. Representative Therriault advised that the permit currently requires that authority. Mr. White disagreed stating that the permits do not specify those conditions although they are implied. MARY NORDALE, ATTORNEY, ROBERTSON, MONAGLE & EASTAUGH, JUNEAU, responded to Assistant Attorney General White's testimony. She referenced A.S. 18 AAC 50.110, stating that it indicates that air pollution requires a provision of permit. [Copy on file]. She added that the amendment was unnecessary to the proposed legislation. Representative Brown questioned if there would be an impact 8 to the permitting process without the amendment. Ms. Nordale advised that the regulation states that no person may emit an air omission which would constitute injury to human health. That language is currently in regulation. The definition of pollution is contained in Alaska Statutes, Title 46. She added that the provision proposed by the Department of Law would require a massive effort in rewriting permits. Representative Brown asserted that proper procedure has not been followed in preparation of the proposed legislation and that private interest groups have received more current access to the legislation than the Minority. She referenced a memo received from Mary Nordale to Marie Sansome, Department of Law, written 3/15/94. [Copy on file]. Representative Therriault advised that the committee substitute had been made available to all members upon receipt. Representative Brown asked who authorized to exclude the amendment provided by the Department of Law. Ms. Nordell clarified that the regulations of the Department of Environmental Conservation (DEC) require a "showing" by the applicant for the permit that the air emissions, waste water or solid waste discharge would not constitute pollution or a nuisance. She added that this would be an explicit requirement of the permit and would be required by the proposed amendment. Discussion followed regarding the amendment provided by the Department of Law. Representative Brown referenced a memo received from John Stone, Department of Law, dated 3/09/94, which stated that the public process has never addressed "nuisance", or provided an average individual protective standards from nuisance. [Copy on file]. (Tape Change, HFC 94-66, Side 1). Co-Chair MacLean MOVED TO RESCIND previous action on adoption of committee substitute 8-LS0930\D, Bannister, 2/12/94 as the version before the Committee. There being NO OBJECTION, it was so ordered. Co-Chair MacLean MOVED to adopt committee substitute 8- LS0930\I, Bannister, 3/17/94, as the current version before the Committee. There being NO OBJECTION, it was adopted. Co-Chair MacLean MOVED to adopt Amendment #1 as proposed by the Department of Law. Representative Therriault questioned the impact on the legislation. JIM CLARK, GENERAL COUNSEL, ALASKA FOREST ASSOCIATION, JUNEAU, advised that the Department of Law did not consider 9 the amendment a condition of the permit, but instead required that the applicant make a "showing". The language currently included in the committee substitute requires that the word "pollution" continues to be defined so as to prevent a nuisance. Representative Brown pointed out that at this time the language is not required because the law contains explicit definition of what constitutes a "nuisance". Representative Brown stressed that the proposed legislation should clearly define the provisions of the permitting process. Mr. Clark disagreed, stating that language exists. The "showings" are required and the applicant must pay for them as part of the permit condition. Discussion followed regarding the position of the "showing" language in the legislation. AVRUM GROSS, ATTORNEY, JUNEAU, elaborated that the proposed legislation was brought before the Committee although the permit process presently provides for a forum, whereby adjoining property owners can make clear what claims exist for the permittee. He advised that the bill is retroactive and would attempt to protect a corporation who has a permit, and which did not go through the process. Mr. Gross questioned the fairness to the injured party, those who have not had their rights adjudicated and would be forbidden from suing even though they have never been heard. Mr. Gross emphasized that the legislation is unfair. He urged the Committee to adopt Amendment #1. MARIE SANSOME, ASSISTANT ATTORNEY GENERAL-GENERAL CIVIL SECTION, DEPARTMENT OF LAW, advised that the environmental standards and the permitting process are designed to protect a public nuisance and that injuries would be to the public at large and not the specific private property owner. Many of the environmental standards are based on the type of equipment available to control pollution and not necessarily what the impact of the charge would be. She added, that many federal permits focus on technology standards, consequently, a permit may not address the impact to the private land owner. Ms. Sansome pointed out that many of DEC's permits are issued to private individuals and very small businesses. These individuals would not be able to afford the types of "showings" requested. Representative Hanley asked if the legislation would address a violation of the Department's statute. Ms. Sansome replied, that type of provision would be effective in nuisance suits when the discharge was specifically authorized in the statute, although she thought it unlikely that a general regulation or statute would operate on a 10 nuisance suit. Discussion followed regarding the parameters of the word "and", Page 1, Line 10. Representative Brown questioned if the Department should consider whether the permitted activity would cause a private nuisance. Representative Hanley commented that public interest impacts private interest and that consideration must be given to both interests as well as protection to those who have to go through that process. Representative Brown disagreed advising that the legislation would create a potential liability for the State. Mr. White interjected that the amendment would provide greater clarity in the permitting process. Representative Therriault OBJECTED to adoption of Amendment #1. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Brown, MacLean, Larson. OPPOSED: Hanley, Martin, Parnell, Therriault, Grussendorf. Representatives Navarre and Foster were not present for the vote. The MOTION FAILED (4-5). Representative Brown MOVED to adopt Amendment #2. Representative Therriault OBJECTED stressing that the language was too broad. Representative Brown explained that Amendment #2 would apply to Page 3, Line 5 and would insure that property owners, whose rights would be affected by the issuance of a permit, would be given notice as part of the process in order that this situation would be considered. Representative Parnell pointed out that public notice is provided for all permitting actions. Ms. Sansome disagreed stating that public notice is not given on small permits. (Tape Change, HFC 94-66, Side 2). Ms. Bannister stated that when something is authorized by statute or regulation, it would be shielded by option (1), Page 1, Line 12. Representative Brown asserted that there are permits which could be issued and would authorize the discharges. The public would have no opportunity to know that this would be occurring. Ms. Sansome added that A.S. 46.03.110 requires notice for DEC's waste disposal permits, however, it would not cover other items proposed. Representative Therriault understood that other concerns would be in compliance under (2), Page 11 1, Line 13. Ms. Sansome reiterated that administrative orders are not always authorized for public hearings. Mr. Clark interjected that there are a number of permits currently issued in which there is no requirement for public notice. He stated that the legislation specifically requires, after a public hearing, the intent would be made public and notice would be given. Discussion followed regarding the public hearing and public notice process. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Hoffman, Navarre, Brown, MacLean. OPPOSED: Martin, Parnell, Therriault, Grussendorf, Hanley, Larson. Representative Foster was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to withdraw Amendment #3. There being NO OBJECTION, it was so ordered. Representative Brown MOVED to withdraw Amendment #4 which is contained in Section (f). There being NO OBJECTION, it was so ordered. Representative Brown MOVED to adopt Amendment #5 to Page 3, Lines 12-14. Representative Therriault OBJECTED. Representative Brown commented that the legislation would not be good public policy and would result in a lawsuit with the retroactive clause. The amendment would add language to make such a process more difficult. A roll call vote was taken on the MOTION. IN FAVOR: Navarre, Brown, Hoffman, Larson. OPPOSED: Martin, Parnell, Therriault, Grussendorf, Hanley, MacLean. Representative Foster was not present for the vote. The MOTION FAILED (4-6). Representative Brown MOVED to adopt Amendment #6 which would change the effective date with the intent to give time to the court to dispose of the lawsuit which is currently pending. Representative Therriault OBJECTED. A roll call vote was taken on the MOTION. 12 IN FAVOR: Navarre, Brown, Hoffman. OPPOSED: Parnell, Therriault, Grussendorf, Hanley, Martin, Larson, MacLean. Representative Foster was not present for the vote. The MOTION FAILED (3-7). Representative Brown MOVED to withdraw Amendment #7. There being NO OBJECTION, it was so ordered. Representative Therriault MOVED to report HCS CS SB 178 (FIN) out of Committee with individual recommendations. Representative Brown OBJECTED stressing that the proposed legislation was a violation of private property rights. She emphasized that her concerns were not addressed and asked to have more time to read the proposed committee substitute. SB 178 was HELD in Committee for further consideration. ADJOURNMENT The meeting adjourned at 3:25 P.M. 13