HOUSE BILL NO. 360 "An Act relating to the regulation of public accommodation water supply systems." MICHAEL PAWLOWSKI, STAFF, CO-CHAIR MEYER, testified that HB 360 grew out of the Department of Environmental Conservation's (DEC) subcommittee budget process. The State of Alaska regulates drinking water systems that are above a Class C well, one that serves less than 25 people. He explained that Class C wells were removed from regulation because of funding issues and because the program was too broad. He stated that these types of wells pertain to private homes. He noted that the committee became concerned in the differentiation between private homes and more public access areas. He stressed that drinking water was the foundation of public health. The bill is intended to set standards for wells that serve the general public. He pointed out the revised fiscal note from the Department of Environmental Conservation. Co-Chair Meyer asked what kinds of small wells would serve the public. Mr. Pawlowski commented that small restaurants would be such an example. Co-Chair Meyer noted that there was no regulation for wells serving fewer than 25 people, and that this was a problem when a small well served a public day care or other small public facility. 9:55:14 AM Mr. Pawlowski noted that requesting an annual test of a drinking water source was a reasonable practice. He stressed that the state ought be part of the oversight for public drinking water. 9:56:00 AM Representative Kelly expressed concern over adding regulations when a responsible operator might meet the requirements in any case. He asked if there was a way to avoid such a costly program. He expressed concern that adding an entirely new program might be overly expensive for the state. Mr. Pawlowski responded that in creating the fiscal note, cost had been a concern. He also noted that this issue pertains to nearly 3 thousand wells in the state of Alaska. He urged that this was also a policy statement, and that the costs in the fiscal note were as conservative as possible. Representative Kelly cited experience in dealing with the standards of drinking water and various water sources. He again expressed concern over having regulations at this smaller level. He noted that risks existed and citizens had the right to pursue a civil law suit. He also noted that it might place another burden on small businesses. Co-Chair Meyer observed that one should assume that water for a nursing home or day care is kept clean and safe. Representative Stoltze asked if the RCA office has dealt with this issue. He cited experiences with the RCA and the costs involved, and wondered if this would be detrimental to smaller businesses. He explained that there were many such small businesses in his district, already burdened with costs and regulations. He asked how this would help those businesses. Mr. Pawlowski stated that this regulation affects only those small wells serving less than 25 people, which is smaller than most small business, and not an actual water system. Representative Stoltze noted that it might affect a small subdivision in the more rural pockets of even larger cities. He expressed reluctance to have DEC visiting these small areas. 10:03:26 AM Representative Holm asked if there had been a case of illness that caused the change, or rather just an examination of the regulations. Mr. Pawlowski noted discussions in the Resources Committee of cases when illness had developed, potentially from these types of water sources. He pointed out the Public Health funding contained in the fiscal note. Co-Chair Chenault sought clarification for the types of businesses affected by this legislation. He observed that any business that was not a private home would fall under this regulation. 10:05:12 AM Mr. Pawlowski deferred to the director of the Department to answer this question. KRISTIN RYAN, DIRECTOR, DIVISION OF ENVIRONMENTAL HEALTH, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, testified regarding the legislation. She stated that it required regulation of small public facilities, and not water systems that serve private homes, such as a subdivision, unless one of those homes was providing a public service, such as day care. There are a variety of public services captured under this legislation. She estimated there were 3,000 wells of this size that serve the public in some way. 10:07:42 AM Ms. Ryan noted that two years ago, the regulations stated that if water was from a surface water system, it should be approved by an engineer, and tested for substances annually, as well as being designed by a certified engineer. She acknowledged that the fiscal note had been controversial. However, she emphasized that the public should feel protected with safe water. She noted this would require four personnel for adequate testing for the current number of small public wells. 10:09:34 AM In regard to whether there were cases of illness, she stated that it was difficult to actually prove the reason for some sickness. She stated it was indeed a risk. Co-Chair Meyer asked how many of the 3,000 wells were in Anchorage. She noted that a large percentage, about half, of public wells are in Anchorage. 10:10:57 AM Representative Holm observed that the definition of a public accommodation in statute reads: "and all other public amusement and business establishments". Ms. Ryan interpreted that to mean gas stations and office buildings, and any facilities that provide business to the public and have drinking water. She noted that the Resource Committee discussed circumstances when an individual might provide services out of their home. 10:12:33 AM Representative Holm stated that he did not believe it was important for the Department to interpret the statute, but rather how the law might be misinterpreted. Ms. Ryan acknowledged that interpretation would be subject to individual regulators. Representative Holm expressed that this bill might be going too far into controlling water systems. He observed that the definition contained lack of clarity, and he expressed reservation about making changes through regulations. 10:14:43 AM Ms. Ryan cited an example of how to write regulations that meet the intent of the legislation. Mr. Pawlowski acknowledged that a similar broad definition of public accommodation was examined in a bill regarding pesticides last year. He read from the definition, and pointed out that it only pertains to a place that serves the general public. Representative Holm observed that the Second Amendment was written to protect citizens from the government. Co-Chair Meyer stressed that the regulations should match the intent of the bill. He suggested that AS 188.300 be examined to ensure that "public accommodation" was the proper reference. 10:16:37 AM Representative Stoltze asked if this legislation is intended to supplant or to enhance the existing regulations. Ms. Ryan responded that smaller water systems were usually regulated in other jurisdictions and by local governments, but she pointed out that Anchorage currently does not regulate Class C wells. They do regulate private wells if someone is selling a private residence. Representative Stoltze pointed out that he does not see a safety valve that would allow a local government to substitute its regulations. He cited that the Department of Environmental Conservation could be fairly stringent and place undue burden on private individuals and small businesses. He noted that running a gas station in a more remote area was already difficult, and wondered what protections existed for them. He stated that this kind of regulation was onerous for such business. He opined that the definition of public accommodations was too broad in this case. Co-Chair Meyer acknowledged that the definition caused concern, and wondered if there was a way to add a greater comfort with this issue. 10:20:38 AM Ms. Ryan proposed that there were some exemptions in regulations, and that smaller facilities other than day care centers and other high-risk facilities would have less onerous regulations. Ms. Ryan added that the regulations were testing for very serious elements in the water. 10:22:10 AM Representative Kelly observed that the bill was sponsored by request, but reiterated his concern over the fiscal note, and adding a level of oversight to an area that is already regulated. He cited an example in his area where a water system of another size was put in, and people were unable to drink the water due to a federal regulation. Then a new level of arsenic was decided and the people were told they could not bathe in the water. He pointed out the current budgetary problems faced by the state, and questioned the value of adding more regulatory activity with a large added cost. He suggested they ought to seek ways to cut the costs of regulations and reduce the burden to smaller businesses. 10:25:17 AM Co-Chair Meyer stressed that those in a day care center or senior center ought to be able to rely upon water quality. He noted that a cost was required for this surety. He stated the desire to hold the bill in order to re-examine the fiscal note and cut costs. Ms. Ryan pointed out that there were currently no standards for the water systems in question. Representative Kelly pointed out that the reason the state did not regulate water systems for private homes was because citizens would complain bitterly. He suggested that the Committee ought to examine the cost of compliance with this regulation. 10:28:15 AM THOMAS STRATTON, EXECUTIVE DIRECTOR, ALASKA RURAL WATER ASSOCIATION, testified that his association is a non-profit that provides training and technical assistance to small water systems. He expressed thanks for the desire to provide safe drinking water in more rural areas. He cited his own experience in building a home and creating a safe water system, and his desire to trust the safety of water at a local day care center. 10:29:43 AM He referred to the definition of public accommodation, and stated his belief that the Department had done an excellent job with language. He applauded the legislature for addressing this issue and the Department of Environmental Conservation for working with concerns. Co-Chair Meyer asked if one did become ill from drinking water at a public accommodation, whether the state was liable for not providing adequate regulation. Mr. Stratton stated he was not able to address liability. Co-Chair Meyer presumed that one would first approach the private business and then the state. Mr. Stratton noted an example of individuals dying from drinking from a water supply, and supposed there could be lawsuits in the future. Representative Hawker MOVED Amendment 1, labeled 24- LS1468\A.5, Bullock, 4/7/06. Co-Chair Meyer OBJECTED for purposes of discussion. Representative Hawker MOVED to amend Amendment 1, to change line 20 from "is used as" to "may be". There was NO OBJECTION to the motion to amend Amendment 1, therefore it was adopted. REPRESENTATIVE NORM ROKEBERG spoke to Amendment 1. He related that there are over 3,000 homes that are served by various types of wells in his district. He stressed the importance of water regulation in the state. He explained that Amendment 1 asks the Department to adopt regulations to protect exposed water aquifers. It requires a fee to be paid by a property developer who is developing around an exposed aquifer that resulted from previous mining activity. The bill is not intended to be special legislation, but applicable to all areas of the state. Representative Rokeberg gave an example from his district. He stressed that there is a complete breakdown of regulatory authority because the local municipality is looking to DEC to take responsibility and vice versa. Over 200 people with separate wells would be subjected to the activity revolving around the development. Representative Rokeberg referred to the amendment to Amendment 1 on line 20 as being necessary because that has been the point of contention between the DEC and the city of Anchorage. He highlighted frustrations around access issues and noted three years of dealing with DEC on the matter. He pointed out that the fees will be paid by the developer and should offset costs. 10:39:46 AM Representative Rokeberg warned the committee to look at private fiscal notes that result in costs to the private sector. He emphasized that there is an expectation by the public that public accommodations should have safe drinking water. The RCA only handles economic regulation, not water quality issues. He stressed that there are times to accept some of the costs that go with the constitutional responsibility toward public safety. This is such an exception. 10:42:27 AM Representative Hawker followed through with the intent of Amendment 1. He questioned if "containing an exposed aquifer" were the appropriate words to use. He suggested "development on property affected by an exposed aquifer". Representative Rokeberg related that the exposed aquifer has to be a pre-existing condition. Representative Hawker asked if the intent is that it must be a development that surrounds and contains an aquifer, not downstream of the aquifer. Representative Rokeberg said it could be within 100 feet of it. He spoke about contaminated water during the development of the subdivisions. Representative Hawker responded that the language reads that the "development must contain the aquifer and must not be within 100 feet". Representative Hawker referred to line 11 and line 14, "property containing". Representative Rokeberg suggested "adjacent to". Representative Hawker suggested "affected by". Representative Rokeberg agreed. 10:46:53 AM Representative Kerttula spoke of a concern with the words regarding no improvements within 100 feet. She asked when the construction should have started. Representative Rokeberg said it would be a pre-existing condition. Representative Kerttula attempted clarification. 10:48:20 AM Representative Hawker proposed to change lines 11 and 14 to read "property within 100 feet of an exposed aquifer" in place of "containing and". Representative Kerttula suggested changing lines 21-23. Co-Chair Meyer suggested that the bill be set aside to have the amendments re-written. 10:50:48 AM Representative Kelly asked about if the area is regulated by Anchorage. Representative Rokeberg replied that the only regulation involves testing the water. Representative Kelly asked if they could choose to regulate it. Representative Rokeberg said he believes so. Representative Kelly suggested that sometimes locals don't want regulation responsibility. He suggested a separate bill. HB 360 was heard and HELD in Committee for further consideration. 10:52:13 AM