SENATE BILL NO. 158 "An Act relating to oil and hazardous substances and waiver of cost recovery for containment and cleanup of certain releases; and providing for an effective date." 9:33:39 AM KRISTIN RYAN, DIRECTOR, DIVISION OF SPILL PREVENTION AND RESPONSE, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, JUNEAU, discussed SB 158. The bill would offer cost recovery to homeowners when they had a release of oil of hazardous substance from equipment used for space heating or electrical power generation. Current statutes require the Department of Environmental Conservation to seek complete cost recovery for cleaning up spilled petroleum or other hazardous substances. This can deter homeowners from reporting or cooperating with the department when they experience a spill at their home, such as a spill from a heating oil tank. She added that the language of the bill had been crafted specifically for small homeowners that due to lack of expertise were least able to deal with a spill. 9:37:42 AM Ms. Ryan discussed the fiscal impact of the bill. She said that costs related to spills ranged from $200 to $4,000. She believed that guidance from the department was cost effective. She stated that the money currently collected from cost recover went into the Prevention Account, which was utilized by the legislature to provide the division's annual operating costs. She relayed that several other sources of funds that went into the account would be adequate to cover costs into the future. She felt that the reduction in revenue was worth the value that would be gained by cleaning up the environment and helping individuals through a stressful situation. 9:39:55 AM Senator von Imhof noted that she had heard the bill in the Senate Resources Committee. She recalled testimony that had clarified the reticence of homeowners to contact the department because of the financial repercussions. She asked how much the fuel tax the division received. Ms. Ryan replied that the division received $.095 per gallon. Co-Chair MacKinnon clarified that the question was how much was received in total on an annual basis. Ms. Ryan stated that there were 2 sources of monies that went to the fund. One was the $.095 per gallon for refined fuel, which she believed would end up generating $6 million per year; additionally, there was a $.04 per barrel tax from Trans-Alaska Pipeline System (TAPS). Because of declining production, there had been a decline in the revenue, which had prompted the refined fuel tax. 9:41:54 AM Vice-Chair Bishop asked about the release amount that constituted a recordable spill. Ms. Ryan stated that the amount varied depending on the receiving environment. She stressed that all spills should be reported to the division. She said that water spills should be reported immediately, land spills were less immediate depending on size. She relayed that large companies on the North Slope provided a monthly report of spills, rather than reporting each minor spill. Co-Chair MacKinnon asked Ms. Ryan to walk through the Sectional Analysis. Ms. Ryan addressed the Sectional Analysis (copy on file): Section 1 (Page 1, lines 4 -8): provides an exception to existing mandatory cost recovery requirements. Section 2 (Page 1, line 9 13): allows the Department to adopt regulations to waive cost recovery efforts in situations defined by the proposed legislation. Section 3 (e) (Page 1, line 14 Page 2 line 16): Establishes reasons the Department may waive cost recovery efforts. The Department must find the release was from a home or building with four or fewer housing units; the release was not willful and was reported to the Department immediately; the homeowner took immediate measures to stop and contain the release; and the homeowner granted access to the property and is cooperative. Section 4 (Page 2, lines 17-22): establishes the ability for the Department to adopt regulations. Section 5 (Page 2, lines 23-26): makes sections 1-3 of the legislation retroactive to January 2018. Section 6 (Page 2, line 27): allows the Department to adopt regulations under section 4 immediately. 9:44:06 AM Senator Stevens asked for an explanation of the term "small homeowners." Ms. Ryan explained that any sized home would meet the exemption requirement. Co-Chair MacKinnon referenced Ms. Ryan's comments about unexpected exemptions. She requested further details. Ms. Ryan stated that the most significant exemption was municipalities that provided fuel for heat generation. She recalled that the initial fiscal note had assumed $7.6 million would be generated, which had dropped to $6 million. She said that the most significant exemptions had been for municipalities and power generation in villages. Ms. Ryan stated that there was a section in statute that spoke to the exemptions. Co-Chair MacKinnon asked whether there was spills in municipalities that the state was responsible for. Ms. Ryan affirmed that there wherever there was fuel used there would be spills. She said that the first goal was to have the responsible party address the problem. 9:47:08 AM Co-Chair MacKinnon OPENED public testimony. 9:47:28 AM FABIENNE PETER-CONTESSE, HOMEOWNER, JUNEAU, testified in support of the bill. She recounted that she had an underground fuel spill at her home and had immediately called Department of Environmental Conservation. She detailed her process working with the department. She had spent many tens of thousands of dollars to mitigate the problem. She lamented that homeowner's insurance did not cover her spill. She expressed appreciation for the ease with which the department's staff had worked with her. She revealed that overtime she began to receive bills for the day to day operations of the division. She felt that the billing of the public put a barrier between the public and the department. She shared that she had recently received a letter and expected that she would receive a bill for them having written the letter. She expressed concern for people who would be financially burdened for clean up efforts, on top of the stress of dealing with the spill. She encouraged full support of the legislation. 9:51:52 AM Vice-Chair Bishop appreciated the testimony. He related that he had heard similar stories from constituents. Co-Chair MacKinnon CLOSED public testimony. Vice-Chair Bishop discussed FN 1 from Department of Environmental Conservation, OMB component number 3094. He believed that the division had effectively explained the note. Senator Micciche supported the bill. He asked whether DEC had increased its outreach to the public about the program and spill prevention measures. Ms. Ryan stated that the division had spent quite a bit of time at home building association meetings and various fairs that highlighted home products. She discussed the concept of increasing prevention and noted that most spills were occurring where fuel was stored in large volumes. She said that the division only regulated tanks of 420,000 gallons or larger and had not role in prevention regualtion below that threshold. She stated that regulation was recently drafted that would require tanks below that threshold, down to 13,000 gallons, to register with the division. She believed that building relationships through providing technical assistance would improve the dialogue surrounding the maintenance of tanks. 9:56:18 AM Ms. Ryan shared that the goal was setting standards in regulation but thought this would be difficult to apply universally throughout the state because of varied resource availability in different areas of the state. SB 158 was HEARD and HELD in committee for further consideration. 9:58:08 AM Co-Chair MacKinnon informed that amendments to the bill were due by 5:00 p.m. on the following Friday.