Legislature(2003 - 2004)

03/12/2003 01:44 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 59                                                                                                             
     An Act relating to the evaluation and cleanup of sites                                                                     
     where certain controlled substances may have been                                                                          
      manufactured or stored; and providing for an effective                                                                    
REPRESENTATIVE JIM HOLM requested that the work draft be                                                                        
brought before the Committee.                                                                                                   
 Representative  Foster  MOVED   to  ADOPT  work  draft   #23-                                                                  
 LS0341\S, Lauterbach,  3/18/03, as  the version  of the  bill                                                                  
 before the  Committee.  There  being NO  OBJECTION, the  work                                                                  
 draft was adopted.                                                                                                             
 Representative Holm  explained  the  functions of  the  bill.                                                                  
 Alaska  currently does  not  have  basic  standards  for  the                                                                  
 cleanup of illegal  drug labs.  HB  59 would establish  basic                                                                  
 standards and requirements  for the cleanup  of the sites  to                                                                  
 guarantee safety for future residents.                                                                                         
 Over the  past  four  years,  over  ninety  meth amphetamine                                                                   
 (meth) labs were discovered  in Alaska.  The labs were  found                                                                  
 in apartments,  hotels,  cabins, mobile  homes, and  even  on                                                                  
 boats. If left untreated,  chemicals from "cooking meth"  can                                                                  
 be extremely hazardous and  pose a serious threat for  future                                                                  
 residents, particularly children.                                                                                              
 Representative Holm  stated  that HB  59 would  require  that                                                                  
 once law enforcement  agencies discover  an illegal lab,  the                                                                  
 property  owner  would  be   responsible  to  clean  up   the                                                                  
 hazardous materials.   A complete cleanup  of the site  would                                                                  
 be needed before the structure  could again be utilized.   In                                                                  
 order  to  demonstrate   that  the  property   was  fit   for                                                                  
 habitation, the owner must  provide test results showing  the                                                                  
 levels   of   contamination    below   the   Department    of                                                                  
 Environmental Conservation limits.                                                                                             
 HB 59 stipulates  that the  Department or  a law enforcement                                                                   
 entity would  provide information  to the  owner on  required                                                                  
 testing    procedures    and    guidelines    for    cleanup.                                                                  
 Additionally, a  list of laboratories  that may  be used  for                                                                  
 determining whether  the property  is  fit for  use would  be                                                                  
 provided to the property  owner.  He  pointed out that HB  59                                                                  
 stipulates full disclosure to  future buyers if the  property                                                                  
 was used  as  an  illegal  drug site  and  was  not  properly                                                                  
 cleaned to the Department's standards.                                                                                         
 Representative Chenault asked if that requirement would  hold                                                                  
 true if  the premise  had been  sufficiently  cleaned to  the                                                                  
 Representative Holm replied that would not happen.   It would                                                                  
 only occur if it had not been adequately cleaned.                                                                              
 Co-Chair Harris asked if a tenant in a facility was  fronting                                                                  
 a meth  lab  and it  was  raided,  would the  owner  then  be                                                                  
responsible for  the clean up activity.   Representative Holm                                                                   
acknowledged that was correct.                                                                                                  
Co-Chair  Harris  inquired  if  that  owner  would  have  the                                                                   
authority  to sue the  tenants who  were illegally  using the                                                                   
property.    Representative  Holm  explained  that  the  bill                                                                   
addresses the  owners of the  property and that  the property                                                                   
owner does carry the liability  for the property.  He pointed                                                                   
out that a risk  analysis indicates tort law.   If there is a                                                                   
civil action, the  owner would then place the  action back to                                                                   
the renter  who offended  the property.   In many  cases, the                                                                   
resources  to go after  the guilty  party are not  available.                                                                   
He acknowledged that was the risk.                                                                                              
Representative Holm stated that  he and Senator Guess believe                                                                   
that it is more important to error  on the side of protecting                                                                   
children  living  in  these buildings.    Without  adequately                                                                   
cleaning the premises, there could  be risks for the children                                                                   
living there.   He added that the adults could  address their                                                                   
concerns through the civil process.                                                                                             
Co-Chair  Harris asked  why the  legislation  had not  passed                                                                   
last year.                                                                                                                      
SENATOR GRETCHEN  GUESS emphasized  that the bill  had passed                                                                   
the   House  Floor,   Senate   Resources  Committee,   Senate                                                                   
Judiciary  Committee and  had been scheduled  for the  Senate                                                                   
Floor on that difficult last day.                                                                                               
Representative Stoltze  inquired the average costs  for these                                                                   
types of  clean-ups.   Representative Holm  did not  know the                                                                   
per site cost.                                                                                                                  
JOSH  GOVAARS, STAFF,  REPRESENTATIVE  JAMES HOLM,  explained                                                                   
that the cost would depend on how big the meth lab was.                                                                         
Representative Stoltze requested  information on the types of                                                                   
responsibilities that  are being passed to the  landlords and                                                                   
property owners.                                                                                                                
LARRY  DIETRICK,  DIRECTOR, SPILL  PREVENTION  AND  RESPONSE,                                                                   
DEPARTMENT OF  ENVIRONMENTAL CONSERVATION, observed  that the                                                                   
characterization of the clean-up extent was accurate.                                                                           
Senator Guess  interjected that from testimony  last year, it                                                                   
was indicated  that the average  cost clean up cost  would be                                                                   
between  $2,000  -  $5,000  dollars.    Property  owners  are                                                                   
responsible for paying those costs.                                                                                             
Co-Chair  Williams asked  if  the owner  could  go after  the                                                                   
guilty party.   Senator Guess explained that  in any property                                                                   
situation,  the   owner  is  always  responsible   for  their                                                                   
property.   The  owner could  go through  restitution on  the                                                                   
criminal side and civil law could  then go after the expenses                                                                   
 for the tenant responsible for creating the lab.  Through  HB
 59, the owner  remains responsible; however,  the owner  only                                                                  
 must address  the items  listed in  the legislation  if  they                                                                  
 want to have the property reoccupied.                                                                                          
 Representative Stoltze asked  if the current landlord/tenant                                                                   
 laws contain enough protection for the landlords.                                                                              
 Representative  Croft   pointed  out   that  A.S.  34.03.120                                                                   
 Landlord/Residential/Tenant   Act  already   clarifies   that                                                                  
 concern.  He added that it  was unfair to characterize HB  59                                                                  
 as changing  who is  responsible to  pay.   The landlord  has                                                                  
 always had the obligation  to rent out  a safe place and  the                                                                  
 tenants have the  obligation to  keep the rental  as a  clean                                                                  
 and safe environment  and not  do to  do illegal activities.                                                                   
 The practical solution is not waiting to do the clean  up but                                                                  
 rather  to  fine  those  tenants  participating  in   illegal                                                                  
 Vice-Chair Meyer  asked  clarification  that  if he  owned  a                                                                  
 rental space, would  it be his obligation  to make sure  that                                                                  
 the unit  was  cleaned-up after  the  meth lab  tenants  were                                                                  
 evicted.  He  questioned if he  would be held  liable if  the                                                                  
 new tenant's children got sick.                                                                                                
 Representative Croft  replied that was  true in current  law.                                                                  
 Without this bill, the owner would still be liable;  however,                                                                  
 the bill establishes  the structure for  doing what needs  to                                                                  
 be done.  Without  HB 59, there would  not be a standard  for                                                                  
 cleaning and then re-renting.                                                                                                  
 Vice-Chair  Meyer  suggested  that  the  bill  could  put  an                                                                  
 "extra" burden of responsibility on the owner of the  rental.                                                                  
 Senator Guess clarified that the bill only becomes effective                                                                   
 when there has been  a "bust" by law  enforcement.  The  bill                                                                  
 does set guidelines if someone thinks that there was  illegal                                                                  
 drug use and wanted to properly  clean it up.  The bill  does                                                                  
 not require a  clean up unless law  enforcement has  actually                                                                  
 certified that  there was  a bust.   An  appeal process  does                                                                  
 exists if that  party wanted  to appeal  the law enforcement                                                                   
 decision.   Senator Guess  noted the  two types  of  property                                                                  
   · The one who does not care and re-rents, and                                                                                
   · The type that is diligently concerned about these types                                                                    
     of concerns and truly wants to do the right thing.                                                                         
 Senator Guess emphasized  that to date,  there have not  been                                                                  
 guidelines for people that want to do the "right" thing.                                                                       
Vice-Chair Meyer asked  if it was essential that  there was a                                                                   
bust or  conviction.  Senator  Guess replied that  there must                                                                   
Vice Chair Meyer noted that he  supported the bill but voiced                                                                   
concern with  the unintended consequences.   He  thought that                                                                   
it would impact the homeowners liability insurance.                                                                             
Senator Guess  pointed out that  contained in  the homeowners                                                                   
mortgage statement,  there is an obligation to  the homeowner                                                                   
for the bank to clean up.                                                                                                       
Representative  Hawker  pointed  out  that  he  did  not  see                                                                   
anything   that  specifically   endorses  or  clarifies   the                                                                   
landowner's recourse  against the perpetrator who  has caused                                                                   
the  damage   against  the   property.    Additionally,   the                                                                   
legislation asks  the landowner  to assume all  the potential                                                                   
liability  against  a  renter.    He asked  if  it  would  be                                                                   
appropriate  to include  a sidebar  indicating that  cleaning                                                                   
would be the responsibility of a cleaning contractor.                                                                           
Senator Guess  noted that  had been  discussed in the  Senate                                                                   
Judiciary Committee  last year.  Senator Taylor  inserted the                                                                   
language   "unknowingly,  which   has  specific  meaning   in                                                                   
statute.  The  owner would have to "knowingly"  re-rent to be                                                                   
liable.  She  reminded members that the bill  would be passed                                                                   
along to the Senate Judiciary Committee for discussion.                                                                         
Representative   Hawker   inquired  where   the   "knowingly"                                                                   
provision  was located  in the  bill.   Representative  Joule                                                                   
pointed out it could be found on Page 4, Subsection ©.                                                                          
Representative Croft  advised that "knowingly"  is a criminal                                                                   
and high  standard.  He pointed  out that it was  a reference                                                                   
to the criminal  code given the context in which  it is used.                                                                   
Representative Croft asked if  Representative Hawker would be                                                                   
more comfortable  if the language  stated that:   "Nothing in                                                                   
the act precludes  any recourse that you have  under contract                                                                   
in the landlord/tenant  act against the tenant  for the costs                                                                   
of cleaning up".                                                                                                                
Representative  Hawker agreed  he would  be comfortable  with                                                                   
the inclusion of  language clarifying that the  owner was not                                                                   
prejudice  toward  any  of  those   rights.    He  referenced                                                                   
"knowingly"  and  asked  what  would  happen  in  a  landlord                                                                   
situation  in  which  definitely   dangerous  chemicals  were                                                                   
present that required a professional  contractor to clean up.                                                                   
Representative  Croft  explained  that  without  "knowingly",                                                                   
they could use other language  such as "knew" or "should have                                                                   
known".  The  knowingly modifies the transfer  and violation.                                                                   
The  owner must  know that  they are  in violation.   If  the                                                                   
owner believes  that the unit was sufficiently  cleaned, then                                                                   
 they did  not  "knowingly"  transfer  in  violation  of  that                                                                  
 Representative Hawker  asked what recourses  would the  owner                                                                  
 ELISE  HSIEH,  (TESTIFIED   VIA  TELECONFERENCE),  ASSISTANT                                                                   
 ATTORNEY GENERAL,  DEPARTMENT  OF LAW,  ANCHORAGE, explained                                                                   
 that they could attempt to  make a case under the definition                                                                   
 of "knowingly".  The person  would have to argue against  the                                                                  
 knowingly.   If that  person thought  that the  owner of  the                                                                  
 property knew that it  had been a meth  lab or had some  role                                                                  
 in  it, the  same  action  would  be  taken.    The  proposed                                                                  
 language would clarify it.                                                                                                     
 Co-Chair Williams reminded  Committee members that there  had                                                                  
 been five attorneys on the House Judiciary Committee  who had                                                                  
 examined these concerns.                                                                                                       
 Representative  Stoltze suggested  that  the  bill  would  be                                                                  
 costly to implement.   He believed that  there would need  to                                                                  
 be some changes  to the  landlord/tenant law  to help  negate                                                                  
 some of  the  liabilities.    He  encouraged  providing  some                                                                  
 protections to the landlord.                                                                                                   
 Representative Holm acknowledged that he was concerned  about                                                                  
 putting owners at  risk through  no fault of  their own.   He                                                                  
 pointed out  that  people,  who rent,  do  have protections.                                                                   
 Representative  Holm responded  that  he  and  Senator  Guess                                                                  
 concern  lay  with  protecting   those  who  cannot   protect                                                                  
 themselves.   Under  these  circumstances,  renting  property                                                                  
 makes it inherent  as a responsible landlord  to keep an  eye                                                                  
 on the properties.  He reiterated that the bill does  address                                                                  
 a dangerous concern.                                                                                                           
 Representative Stoltze agreed  that meth labs are dangerous,                                                                   
 however, he was concerned about the fringe issues.                                                                             
 Representative  Hawker questioned  the  rights  of  the  lien                                                                  
 holders and  how the  bill  could affect  them, particularly                                                                   
 when they  cannot sell  or transfer  a lease.    He asked  if                                                                  
 there was any limitation  being imposed  on a lien holder  or                                                                  
 their ability to foreclose on a property or to sell.                                                                           
 Mr. Govaars understood  that the property  could not be  sold                                                                  
 until the clean up had occurred.  He did not know what  would                                                                  
 happen for the lien holders.                                                                                                   
 Ms. Hsieh  interjected  that the  bill  does not  define  the                                                                  
 person that owns  or sells, but  she did  note that it  could                                                                  
 broadly include the lien holder.   She added that it  appears                                                                  
 that  the person  could  not  transfer,  sell,  or  rent  the                                                                  
 property until it was cleaned up.  The bill was not  meant to                                                                  
stop a lien holder that does know  and wants to foreclose and                                                                   
take possession.                                                                                                                
Representative Hawker asked if  the bill would provide notice                                                                   
to the  lien holder regarding  the situation.   Senator Guess                                                                   
responded that HB  59 does not provide that  notice, however,                                                                   
the Senate version does.  She  added that work was being done                                                                   
with the  Department of Public  Safety to determine  the cost                                                                   
associated with alerting the lien holder.                                                                                       
Mr. Govaars  advised that  the adding of  the lien  holder to                                                                   
the legislation as a requirement  of notification would add a                                                                   
fiscal note.   Someone would have  to be hired to do  a title                                                                   
search  and pay  for  it. He  projected  that  it would  cost                                                                   
nearly a full time position and  acknowledged that had been a                                                                   
concern.  As the  owner of a house and having  a lien holder,                                                                   
it would  be required to  let the lien  holder know  if there                                                                   
had been significant damage to the property.                                                                                    
Representative  Hawker  disagreed.   He  stressed  that  this                                                                   
legislation  was broad  and encompassing.    He voiced  great                                                                   
concern with the unintended consequences that would result.                                                                     
Co-Chair Williams  advised that if Representative  Hawker had                                                                   
concerns, he would hold the bill in Committee.                                                                                  
Senator  Guess interjected  that  a property  could still  be                                                                   
sold if  the information  had  been disclosed.   If both  the                                                                   
buyer and seller  are in agreement, then the  situation could                                                                   
be okayed.  She agreed that the concern was valid.                                                                              
Co-Chair Williams  argued that these concerns  had been fully                                                                   
discussed in  the House Judiciary Committee.   Representative                                                                   
Hawker reiterated  that it  was his  interest to protect  the                                                                   
financial interests of the lien holders.                                                                                        
Ms. Hsieh  advised that  as long as  full disclosure  is made                                                                   
under this bill,  the interest for the lien  holder would not                                                                   
change the situation.   She believed that there  probably was                                                                   
some sort  of obligation of the  owner to give notice  to any                                                                   
lien holder.                                                                                                                    
Co-Chair  Williams MOVED  to ADOPT  Amendment #1.   (Copy  on                                                                   
File).  He  noted that the sponsor, Representative  Holm, had                                                                   
distributed  the  amendment.   Co-Chair  Harris  OBJECTED  to                                                                   
Amendment #1.                                                                                                                   
Representative Holm  explained the amendment, noting  that it                                                                   
had been  brought forth  by the  Department of Public  Safety                                                                   
and the Department of Environmental Conservation.                                                                               
   ·    Page 5, Lines l7-l9:  Delete "one of the following                                                                      
        substances above the limit set by the department for                                                                    
        that substance: lead, mercury, met amphetamines,                                                                        
        volatile organic compounds, and other";                                                                                 
   ·    Page 5, Line 2l:  Insert "The Department of Public                                                                      
        Safety shall annually submit a list of substances to                                                                    
        the Department of Environmental Conservation."                                                                          
   ·    Page 5, Line 22:  Delete "specifically listed in (a)                                                                    
        of this section" and insert "specified by the                                                                           
        Department of Public Safety".                                                                                           
 Senator Guess explained the  changes between the legislation                                                                   
 from last year  and the one currently  before the Committee.                                                                   
 She  advised  that  the  State  Trooper's  had  come  forward                                                                  
 informing the  Legislature of  situations  that had  changed.                                                                  
 They support the current language, as does the Department  of                                                                  
 Environmental Conservation.                                                                                                    
 TAPE HFC 03 - 33, Side B                                                                                                     
 Senator Guess  reiterated  that  the purpose  for  those  two                                                                  
 departments encouraged the changes affected.                                                                                   
 Representative Holm interjected  that there are other  hazard                                                                  
 materials  which  should  be   added  such  as  iodine,   red                                                                  
 phosphorous,  lye,   sulphuric   acid,   hydrochloric   acid,                                                                  
 hydraulic  acid,  lithium  methyl,  sodium  methyl,  mercury,                                                                  
 lead, meth residues and certain organic compounds.                                                                             
 Representative  Foster   commented   that  Nome   is   highly                                                                  
 mineralized and that the  gravel in Nome shows approximately                                                                   
 levels 20 times higher in  saturated mercury.  He asked if  a                                                                  
 person in Nome  would be able  to sell their  house with  the                                                                  
 legislation in place.                                                                                                          
 Senator Guess stressed that mercury was one of the compounds                                                                   
 which had been removed  from the list.   She added that  many                                                                  
 of the compounds that would  be of concern to Representative                                                                   
 Foster are now off the list.                                                                                                   
 Representative  Holm acknowledged  that  mercury,  lead,  and                                                                  
 volatile organic compounds need to be excluded.                                                                                
 Co-Chair Harris maintained  that the  only items that  should                                                                  
 be included on the list should be "illegal substances".                                                                        
 Mr. Dietrick  advised  that the  original lists  were  common                                                                  
 compounds.   He added  that  today was  the first  time  that                                                                  
 Department of Environmental  Conservation had seen the  list.                                                                  
 Some items on  the list  are straightforward and  he did  not                                                                  
 know if any of them were illegal to possess.                                                                                   
Co-Chair Harris stated  that the only time the  concern would                                                                   
come into effect  was when the person was busted  for illegal                                                                   
Co-Chair  Harris  WITHDREW  his OBJECTION  to  Amendment  #1.                                                                   
There being NO further OBJECTIONS,  Amendment #1 was adopted.                                                                   
ED  BRYANT,   (TESTIFIED   VIA  TELECONFERENCE),   DETECTIVE,                                                                   
ANCHORAGE  POLICE  DEPARTMENT  METRO  DRUG  UNIT,  ANCHORAGE,                                                                   
testified  in  support  of  the  legislation.    He  informed                                                                   
members that the chemicals being  discussed were listed under                                                                   
AS  11.71   under  "listed   chemicals".     The  intent   to                                                                   
manufacture must  be present for  a Schedule 1 or  Schedule 2                                                                   
substance and be  in possession of them.  Mere  possession of                                                                   
these in your home  would not be a problem.   It is a problem                                                                   
if you have the intent to manufacture  meth amphitimane.  Mr.                                                                   
Bryant pointed out an additional  concern on Page 7, Line 19:                                                                   
     ".... Controlled substance listed on schedule I or II                                                                      
     as A.S. 11.71 or a precursor chemical for the                                                                              
     substances has occurred; or.."                                                                                             
Mr. Bryant stated that a precursor  is an item, which becomes                                                                   
the final product.  In order to  evade detection, some of the                                                                   
manufactures are  manufacturing the necessary chemicals.   He                                                                   
recommended adding the language  "necessary chemical" to that                                                                   
line.  He  warned that there  is new information out  "on the                                                                   
Co-Chair Harris asked if Mr. Bryant  was recommending that to                                                                   
Line 19,  adding the  definition "necessary  chemical".   Mr.                                                                   
Bryant said yes.                                                                                                                
Co-Chair  Harris  MOVED Amendment  #2,  to  Page 7,  Line  20                                                                   
inserting   "or  necessary  chemical"   after  the   language                                                                   
"precursor chemical".                                                                                                           
There being NO OBJECTION, Amendment #2 was adopted.                                                                             
TIM  ROGERS,  (TESTIFIED  VIA   TELECONFERENCE),  LEGISLATIVE                                                                   
PROGRAM  DIRECTOR,  MUNICIPALITY   OF  ANCHORAGE,  ANCHORAGE,                                                                   
voiced support for the legislation.   He spoke to the hazards                                                                   
involved  with meth  labs  and the  additional  costs to  the                                                                   
property owners.  He stated that  the safety concerns far out                                                                   
weigh  the  additional  costs.    He  reiterated  his  strong                                                                   
support for HB 59.                                                                                                              
TIM  BIGGANE,   (TESTIFIED  VIA  TELECONFERENCE),   DIRECTOR,                                                                   
EMERGENCY   OPERATIONS,   FAIRBANKS   NORTH   STAR   BOROUGH,                                                                   
FAIRBANKS, voiced full support  for the proposed legislation.                                                                   
Over the past  few years, there has been a  dramatic increase                                                                   
of  meth  labs  in  that area.    Mr.  Biggane  stressed  how                                                                   
destructive these  drugs are and  the impact they  are having                                                                   
in the local community health.   He listed the irritants from                                                                   
 the drugs and noted  that in many  of these situations,  when                                                                  
 the party involved is evicted,  nothing is being changed  and                                                                  
 there is no clean up.                                                                                                          
 Representative Foster  applauded the work  done on the  bill,                                                                  
 however, he pointed  out that if there  was a problem in  his                                                                  
 area, it would be very costly to thoroughly clean any  place.                                                                  
 He stressed  that  most  people  in  those  areas  could  not                                                                  
 support the action required by the legislation.                                                                                
 Representative Foster MOVED to  report CS HB 59 (FIN) out  of                                                                  
 Committee  with  individual  recommendations  and  with   the                                                                  
 accompanying fiscal notes.                                                                                                     
 There being NO OBJECTION, it was so ordered.                                                                                   
 CS HB  59 (FIN)  was reported  out of  Committee  with a  "do                                                                  
 pass"  recommendation  and   with  fiscal  note  #1  by   the                                                                  
 Department  of Public  Safety  and  fiscal  note  #2  by  the                                                                  
 Department of Environmental Conservation.                                                                                      
 Representative Foster  elaborated that  he was uncomfortable                                                                   
 holding the third party responsible for cleaning up  the work                                                                  
 resulting from the renter.                                                                                                     

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