Legislature(2017 - 2018)SENATE FINANCE 532

03/08/2018 09:00 AM FINANCE

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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                                                                    
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                                                                    
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                                                                    
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                                                                    
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                                                                    
9:58:08 AM                                                                                                                    
Co-Chair  MacKinnon informed  that  amendments  to the  bill                                                                    
were due by 5:00 p.m. on the following Friday.                                                                                  

Document Name Date/Time Subjects
SB158 Sectional Analysis.pdf SFIN 3/8/2018 9:00:00 AM
SB 158
SB158 Supporting Document-DEC Fact Sheet.pdf SFIN 3/8/2018 9:00:00 AM
SB 158
SB158 Transmittal Letter.pdf SFIN 3/8/2018 9:00:00 AM
SB 158
SB 92 J. Murgas SFIN written testimony.pdf SFIN 3/8/2018 9:00:00 AM
SB 92
SB 92 Explanation of Changes Ver. O to Ver. U.pdf SFIN 3/8/2018 9:00:00 AM
SB 92
SB 92 FAQ Sheet.pdf SFIN 3/8/2018 9:00:00 AM
SB 92
SB 92 Work Draft Version U.pdf SFIN 3/8/2018 9:00:00 AM
SB 92
SB 92 Support Doc - Northern Economics 2015 Survey Summary.pdf SFIN 3/8/2018 9:00:00 AM
SB 92