Legislature(2017 - 2018)BARNES 124

02/05/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:15:47 PM Start
03:16:58 PM HB323
03:43:02 PM SB64
04:33:31 PM Presentation: State Residential Building Codes
05:08:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
Moved HCS SB 64(L&C) Out of Committee
-- Public Testimony --
+ Presentation: State Residential Building Codes TELECONFERENCED
by Jim Dunlap, President, AK Home Building Assoc.
+ Bills Previously Heard/Scheduled TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
Scheduled but Not Heard
-- Public Testimony --
Scheduled but Not Heard
-- Public Testimony --
            SB 64-UNIFORM ENVIROMENTAL COVENANTS ACT                                                                        
3:43:02 PM                                                                                                                    
CHAIR KITO  announced that  the next order  of business  would be                                                               
SENATE BILL  NO. 64, "An  Act adopting the  Uniform Environmental                                                               
Covenants Act; relating to  environmental real property covenants                                                               
and notices of activity and  use limitation at contaminated sites                                                               
to ensure  the protection of  human health, safety,  and welfare,                                                               
and the environment; and providing for an effective date."                                                                      
3:43:05 PM                                                                                                                    
SENATOR PETER  MICCICHE, Alaska  State Legislature,  presented SB
64  as prime  sponsor.   He  paraphrased  the sponsor  statement,                                                               
which reads as follows [original punctuation provided]:                                                                         
     A primary interest of this  office is to streamline and                                                                    
     remove  obstacles that  inhibit  business, commerce  or                                                                    
     the transfer of  property without reducing expectations                                                                    
     for public  health, safety  and a  healthy environment.                                                                    
     SB 64 achieves that.                                                                                                       
     In  2003,  the  Uniform  Law  Commissioners  created  a                                                                    
     Uniform   Environmental  Covenants   Act  to   overcome                                                                    
     inadequate common law  rules. An environmental covenant                                                                    
     allows for  the sale  of property with  use limitations                                                                    
     to mitigate  risk. Alaska is  one of only  seven states                                                                    
     that does not have an environmental covenant law.                                                                          
     SB  64 protects  the buyer  and seller  of contaminated                                                                    
     property  while allowing  the fullest  and best  use of                                                                    
     the  property  until  the  contamination  reaches  safe                                                                    
     levels. The  bill creates a  legal mechanism  to safely                                                                    
     transfer     contaminated    property     through    an                                                                    
     environmental covenant.                                                                                                    
SENATOR  MICCICHE  gave  an  example  of  a  family  in  his                                                                    
district who had struggled with the  issue for 20 years.  He                                                                    
mentioned  the  historic case  of  Love  Canal in  New  York                                                                    
State.   He continued  to read  from the  sponsor statement,                                                                    
which reads as follows [original punctuation provided]:                                                                         
     A  covenant provides  transparency throughout  the life                                                                    
     of the  property and provides assurances  to buyers and                                                                    
     sellers  that  risks  will  be  safely  managed.  Other                                                                    
     states  have  found  that  covenants  help  communities                                                                    
     transform blighted property into marketable assets.                                                                        
     A simple process for amending  or removing covenants is                                                                    
     included  in  the  legislation. A  covenant  would  not                                                                    
     supplant  or   impose  current   contamination  removal                                                                    
     standards, which  will continue  to be managed  as they                                                                    
     are currently.  The act would not  affect the liability                                                                    
     of  the  principally-responsible   parties,  but  would                                                                    
     provide  a  method  for minimizing  exposure  to  third                                                                    
3:46:36 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON quoted the  covenants "would exist until                                                               
the  contamination   reaches  safe  levels"  and   asked  whether                                                               
remediation would  continue through the duration  of the covenant                                                               
or would be discontinued.                                                                                                       
SENATOR MICCICHE answered  it depends on the  contamination.  The                                                               
proposed  bill  would  allow property  to  be  transferred  while                                                               
highlighting  that  contamination  exists  and  would  allow  for                                                               
amending  and   removing  covenants  when  there   is  no  longer                                                               
contamination on the site.                                                                                                      
REPRESENTATIVE JOSEPHSON said Senator  Micciche had indicated the                                                               
covenant was voluntary  and read from page 4, lines  8 through 11                                                               
of SB 64, as follows:                                                                                                           
     (c)   In  addition   to   other   conditions  for   the                                                                    
     department's  approval  of an  environmental  covenant,                                                                    
     the department  may require a specified  person who has                                                                    
     an interest  in the real  property that is  the subject                                                                    
     of   the    environmental   covenant   to    sign   the                                                                    
     environmental covenant.                                                                                                    
REPRESENTATIVE  JOSPEHSON asked,  "What if  they won't,  and they                                                               
have an interest in the real property?"                                                                                         
3:48:48 PM                                                                                                                    
SENATOR MICCICHE deferred to Kristen  Ryan from the Department of                                                               
Environmental Conservation (DEC) for an answer.                                                                                 
CHAIR KITO announced the department  would be brought forward for                                                               
invited testimony.                                                                                                              
REPRESENTATIVE  JOSEPHSON mentioned  Love  Canal and  he said  it                                                               
struck him  that would  be an  example of  public notice  of harm                                                               
being caused.   He said  there was a lot  of notice at  the time,                                                               
but he  did not see a  lot of notice for  the next-door neighbor.                                                               
He asked whether  the sponsor was amenable to adding  that to the                                                               
proposed bill.                                                                                                                  
SENATOR MICCICHE  answered he  was looking  for the  best outcome                                                               
for Alaskans and would be amenable to improvements.                                                                             
3:50:40 PM                                                                                                                    
REPRESENTATIVE  KNOPP referenced  the site  in Soldotna,  Alaska,                                                               
and  asked   whether  "a  little   bit  of  contamination   is  a                                                               
prohibition to sell any or all" of a property.                                                                                  
SENATOR MICCICHE  answered that currently the  landowners can use                                                               
institutional controls through DEC  because there is knowledge of                                                               
contamination on that site, but  the law does not currently allow                                                               
for the protection  of the buyer and the seller.   He stated that                                                               
currently   a  scenario   in  which   a  buyer   is  unaware   of                                                               
contamination on  a site is  possible, whereas the  proposed bill                                                               
would prevent that.                                                                                                             
REPRESENTATIVE KNOPP  asked whether there  was anything in  SB 64                                                               
that would require  the environmental covenant to  "go away" once                                                               
the land is deemed to be clean.                                                                                                 
SENATOR MICCICHE answered the proposed  bill would not change how                                                               
the DEC does business but would  help future buyers to know about                                                               
contaminated property before purchase.                                                                                          
3:53:59 PM                                                                                                                    
REPRESENTATIVE  WOOL  asked  about  the sale  of  commercial  and                                                               
industrial sites  such as those on  the North Slope in  the event                                                               
of a costly clean-up.                                                                                                           
SENATOR MICCICHE  answered it  had been  considered and  the only                                                               
opposition to the  proposed bill was from  the federal government                                                               
which happens  to control 51  percent of the  active contaminated                                                               
sites in Alaska.  The proposed  bill would allow the state to put                                                               
land use restrictions on federal property.                                                                                      
REPRESENTATIVE WOOL asked  what would happen to  a depleted field                                                               
during the transfer with regard to the clean-up responsibility.                                                                 
SENATOR  MICCICHE answered  that would  be part  of an  agreement                                                               
between buyer  and seller and  added the proposed bill  would not                                                               
displace  responsibility.   He  mentioned  the Soldotna,  Alaska,                                                               
land and stated the clean-up  would be something the owners could                                                               
not afford,  but he opined it  was a great location  for a resort                                                               
and  the cost  of clean-up  would be  a minor  proportion of  the                                                               
planned investment for  the entire site.  He  said clean-up could                                                               
be part of a side agreement in the sale.                                                                                        
3:57:04 PM                                                                                                                    
REPRESENTATIVE   JOSEPHSON  referenced   language  in   the  bill                                                               
stating, "The  department may maintain  a registry  that contains                                                               
all  environmental covenants."  He said  he assumed  the covenant                                                               
would  run with  the deed,  but he  thought a  website containing                                                               
information on those properties could be required.                                                                              
SENATOR MICCICHE deferred to Kristen Ryan, Division Director.                                                                   
3:58:14 PM                                                                                                                    
KRISTEN   RYAN,   Director,   Spill  Prevention   and   Response,                                                               
Department  of Environmental  Conservation  (DEC),  gave a  brief                                                               
overview  of the  proposed bill.   She  described the  process of                                                               
managing  contaminated sites.   She  gave the  example of  a site                                                               
which  was currently  a Subway  restaurant, but  which previously                                                               
had been  a gas station.   When the gas station  was removed, the                                                               
gas had leaked, and the contamination  was deemed to be safe with                                                               
institutional controls, meaning the  information was entered into                                                               
a database  containing the restrictions  placed on  the property.                                                               
She said  the buyer was  not aware  of the contamination  as they                                                               
were  unaware   of  the  existence   of  the  database   and  the                                                               
information was not included in  the deed, which created a larger                                                               
problem  of  spreading  contamination.    She  gave  examples  of                                                               
situations in  which the department would  allow contamination to                                                               
stay on properties  with institutional controls.   She stated any                                                               
neighbors  would  have  to be  informed  of  contaminated  areas;                                                               
however, the  department did  not have a  mandate.   She remarked                                                               
the legislation  had been proposed  over 10 years  previously for                                                               
the   transfer   of    industrial   properties   with   potential                                                               
4:03:32 PM                                                                                                                    
REPRESENTATIVE WOOL  asked about  the industrial  application and                                                               
where the responsibilities lie for a depleted site.                                                                             
MS. RYAN answered  currently industrial sites on  the North Slope                                                               
have a lease agreement which states  the land will be returned to                                                               
its  original  state  as  part  of  the  lease  arrangement  with                                                               
Department of Natural Resources (DNR).                                                                                          
REPRESENTATIVE WOOL asked  whether, if a seller  could not afford                                                               
to   remediate  the   contamination  but   a  buyer   could,  the                                                               
responsibility would transfer.                                                                                                  
MS.  RYAN answered  SB  64  would not  change  the current  legal                                                               
process,  and   the  person  who  caused   the  contamination  is                                                               
4:06:21 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON stated  his concern  that the  proposed                                                               
bill would  stop the  current process  for remediation  and would                                                               
simply   ease  the   transfer  of   property,   with  notice   of                                                               
contamination, from  one person to  another.  He said  he thought                                                               
regulators would "just throw in the towel."                                                                                     
4:07:28 PM                                                                                                                    
MS. RYAN answered the proposed  bill would not change the current                                                               
environmental  regulation  paradigm,   just  provide  a  thorough                                                               
communication tool for future owners.                                                                                           
REPRESENTATIVE JOSEPHSON asked for  an explanation of the "Notice                                                             
of activity  and use limitation."  [page 9,  line 25, of  SB 64].                                                             
He  said it  links  itself to  the  environment response  project                                                               
which   is   part   of  Comprehensive   Environmental   Response,                                                               
Compensation and Liability Act (CERCLA)  but "allows the owner to                                                               
move from one to the other."                                                                                                    
MS.  RYAN  answered the  entire  section  is to  accommodate  the                                                               
federal government.  She added the  state is not allowed to put a                                                               
covenant  on federal  property.   She  indicated  over the  years                                                               
states  have inherited  a lot  of contaminated  federal land  and                                                               
some had developed  the specific tool of putting a  notice of use                                                               
restriction, which  is the equivalent  of a covenant,  on federal                                                               
property.    She added  native  corporations  in particular  have                                                               
inherited a lot of contaminated  federal lands through trades and                                                               
that   language  is   important   to   ensure  communication   of                                                               
contamination was clear.                                                                                                        
4:10:51 PM                                                                                                                    
CHAIR KITO asked  Ms. Ryan to speak to the  letters received from                                                               
the Department  of Defense (DoD)  and whether DoD  is comfortable                                                               
with the language assuaging their concerns.                                                                                     
MS. RYAN  answered it had  been an ongoing conversation  with DoD                                                               
and  they are  uncomfortable with  the state  giving the  federal                                                               
government  restrictions.   She  stated  DoD  was compliant  with                                                               
similar language  in the state  of Colorado.   She added  DoD was                                                               
nervous about  the state having enforcement  authority on federal                                                               
property, but they do recognize the need for it.                                                                                
4:12:29 PM                                                                                                                    
REPRESENTATIVE BIRCH  asked about the current  monetary threshold                                                               
for a Superfund site.                                                                                                           
MS. RYAN answered that getting a  site listed as a Superfund site                                                               
is a  process, and there  is no  dollar amount restriction.   She                                                               
added there were  only two listed in state history  and it is not                                                               
something the  state feels is a  good process as it  has negative                                                               
connotations.  She stated the  state has robust contaminated site                                                               
lands regulations,  so historically the  Environmental Protection                                                               
Agency (EPA)  has let the  state take lead  on those sites.   She                                                               
remarked the problem with getting a  site listed is that it takes                                                               
the state  out of  the driver's  seat and  puts EPA  in it.   She                                                               
underlined  that  a Superfund  listing  would  still require  the                                                               
state to contribute financially.                                                                                                
4:14:46 PM                                                                                                                    
CHAIR KITO  said he thought it  would require an Act  of Congress                                                               
to list a Superfund site.                                                                                                       
4:15:06 PM                                                                                                                    
CHAIR KITO opened  public testimony on SB 64.   Upon ascertaining                                                               
there  was  no  one  available   to  testify,  he  closed  public                                                               
4:15:41 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked whether the chair  would consider                                                               
an amendment.                                                                                                                   
CHAIR KITO replied an amendment could be offered.                                                                               
4:16:10 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  moved Amendment  1, adding  language as                                                               
     "Public  Comment.   Before  the  commissioner signs  an                                                                    
     environmental  covenant, the  department shall  provide                                                                    
     an opportunity for public  comment on the environmental                                                                    
SENATOR  MICCICHE   asked  for  the   page  and  line   in  which                                                               
Representative   Josephson   thought   the  language   would   be                                                               
REPRESENTATIVE JOSEPHSON answered  Legislative Legal and Research                                                               
Services  recommended  page 3,  following  line  4, and  said  he                                                               
thought the amendment would become new section 46.04.303.                                                                       
SENATOR  MICCICHE  answered  the  covenant would  be  a  property                                                               
owner's  voluntary decision  on whether  to place  a covenant  on                                                               
their own property and he was not  sure of the value of placing a                                                               
requirement of public comment on the decision.                                                                                  
REPRESENTATIVE  JOSEPHSON   replied  that  the  bill   says  that                                                               
registry is  optionally required at the  department's discretion.                                                               
He said that in Anchorage he  gets public notice for buildings or                                                               
widened  sidewalks being  built around  his home.   He  mentioned                                                               
that those whom  he had invited to comment on  the proposed bill,                                                               
such as Alaska  Community Action on Toxics  (ACAT), had expressed                                                               
concerns  with notice  and had  recommended ecology  law journals                                                               
such as Ecology Law Quarterly and a Boston College article.                                                                   
4:19:38 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON read  from  "The Uniform  Environmental                                                               
Covenants  ActAn   Environmental   Justice  Perspective,"  Andrea                                                               
Ruiz-Esquide, Ecology  Law Quarterly, Volume 31,  page 1025, 2004                                                               
edition, which read as follows:                                                                                                 
     Early, ongoing, and  meaningful public participation is                                                                    
     the  hallmark  of  sound  public  policy  and  decision                                                                    
     making.   The  community  most directly  impacted by  a                                                                    
     problem   or  project   is   inherently  qualified   to                                                                    
     participate    in    the    decision-making    process.                                                                    
     Mechanisms  must be  established to  ensure their  full                                                                    
     participation,  including  training   and  support  for                                                                    
     community   groups,    technical   assistance   grants,                                                                    
     community advisory groups, and others.                                                                                     
REPRESENTATIVE  JOSEPHSON  said it  struck  him  that "these  are                                                               
significant covenants  that interrupt the normal  common law" and                                                               
he thought notice is reasonable.                                                                                                
4:20:44 PM                                                                                                                    
SENATOR MICCICHE pointed out page 5  of SB64, starting at line 8,                                                               
and read from Section 46.04.315, which reads as follows:                                                                        
     Notice  of environmental  covenant. (a)  A copy  of the                                                                  
     environmental  covenant   shall  be  provided   by  the                                                                    
     persons and  in the  manner required by  the department                                                                    
          (1)  each  person  that signed  the  environmental                                                                    
          (2)  each person  holding a  recorded interest  in                                                                    
          the  real property  subject  to the  environmental                                                                    
          (3)  each   person  in  possession  of   the  real                                                                    
          property subject to the environmental covenant;                                                                       
          (4)  each  municipality  or other  unit  of  local                                                                    
          government in  which real property subject  to the                                                                    
          environmental covenant is located; and                                                                                
          (5) any other person the department requires.                                                                         
SENATOR MICCICHE said  he wondered if "may" should  be changed to                                                               
"shall"   and   "be   included  in   the   database,"   to   meet                                                               
Representative Josephson's objective.                                                                                           
4:22:31 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  stated he thought Senator  Micciche was                                                               
referring  to  page  11,  line   29,  in  the  section  entitled,                                                               
"Registry."   He deferred to  the director for  confirmation that                                                               
the proposed language would make some improvement.                                                                              
MS. RYAN  answered the  department had  every intent  to maintain                                                               
that  database  and underlined  the  database  was well  used  by                                                               
everyone in the  state who was researching  contamination, so the                                                               
department had  no issue with  changing it  into a mandate.   She                                                               
remarked  the other  changes  that  Representative Josephson  was                                                               
recommending were  more problematic.   She said she  believed the                                                               
material  Representative  Josephson   was  reading  pertained  to                                                               
Superfunds and  she did  not know whether  the proposed  bill was                                                               
the right vehicle for that concern.                                                                                             
4:24:24 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON withdrew Amendment 1.                                                                                  
REPRESENTATIVE JOSEPHSON  moved to adopt Conceptual  Amendment 2,                                                               
turning "may" to "shall" on line 29 of page 11."                                                                                
CHAIR KITO objected for the purpose of discussion.                                                                              
4:25:04 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD asked Ms.  Ryan about the effects                                                               
of the mandate.                                                                                                                 
MS.  RYAN  answered  the department  continued  to  maintain  the                                                               
database and  that what the  bill corrects is that  it references                                                               
that database  from the deeds  so an individual who  doesn't know                                                               
of the database would get  notified.  She emphasized changing the                                                               
language to "shall" would not change how the division operates.                                                                 
REPRESENTATIVE   SULLIVAN-LEONARD    surmised   that   Conceptual                                                               
Amendment 2 was not necessary.                                                                                                  
MS.  RYAN  reiterated  the  mandate would  not  change  what  the                                                               
department does.                                                                                                                
CHAIR  KITO asked  Jennifer Currie  of the  Department of  Law to                                                               
speak to the Conceptual Amendment.                                                                                              
4:27:09 PM                                                                                                                    
JENNIFER    CURRIE,    Senior   Assistant    Attorney    General,                                                               
Environmental Section, Department of  Law, testified there was no                                                               
change except  that it  requires the  department to  maintain the                                                               
CHAIR  KITO   stated  at  present   the  statute  did   not  have                                                               
environmental covenants identified  so they would not  have to be                                                               
registered.  He read from page 11, line 11, of SB 64 as follows:                                                                
     Registry. (a)  The department  may maintain  a registry                                                                  
     that contains  all environmental covenants  and notices                                                                    
     of  activity and  use limitation  and any  amendment or                                                                    
     termination of those instruments.                                                                                          
CHAIR KITO  asked whether, if  "may" was changed to  "shall", the                                                               
department  would  be  required   to  include  all  environmental                                                               
covenants in the database.                                                                                                      
MS.  CURRIE  answered that  with  "shall"  they are  required  to                                                               
include environmental  covenants, and  with "may"  the department                                                               
can include them.                                                                                                               
CHAIR  KITO stated  he saw  the  benefit of  changing "may"  into                                                               
"shall", at least as regards the environmental covenant piece.                                                                  
4:29:05 PM                                                                                                                    
CHAIR  KITO  withdrew his  objection.    There being  no  further                                                               
objection, Conceptual Amendment 2 was adopted.                                                                                  
4:29:39 PM                                                                                                                    
REPRESENTATIVE  WOOL moved  to report  SB  64 as  amended out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.   There being  no  objection, HCS  SB 64(L&C)  was                                                               
moved from the House Labor and Commerce Standing Committee.                                                                     

Document Name Date/Time Subjects
SB064 Fiscal Note DNR-MLW 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Sectional Analysis ver. J 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Sponsor Statement 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DEC Response to DoD 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DEC Response to DoD Supplemental 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Opposition Letter - DoD 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - DoL Uniform Law Conference Report 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - Fact Sheet 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Opposition Letter - DoD Supplemental 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Doc - Uniform Law Commission Fact Sheet 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Support Letters 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Ver. J 1.19.2018.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
SB064 Fiscal Note DEC-SPAR 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
SB 64
ASHBA Letter to HLAC 1.29.18.pdf HL&C 2/5/2018 3:15:00 PM
Building Codes
HB323 Sectional Analysis 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Version D.PDF HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Legislative Audit 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Fiscal Note DCCED-CBPL 2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323.SponsorStatement.verD.2.2.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323
HB323 Support Letter 2.5.18.pdf HL&C 2/5/2018 3:15:00 PM
HB 323