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HOUSE BILL NO. 33
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-SECOND LEGISLATURE - FIRST SESSION
BY REPRESENTATIVE JOSEPHSON
Introduced: 2/18/21
Referred: Resources, Finance
A BILL
FOR AN ACT ENTITLED
1 "An Act relating to penalties for discharges of oil and other pollution violations; and
2 providing for an effective date."
3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
4 * Section 1. AS 46.03.758(a) is amended to read:
5 (a) The legislature finds that
6 (1) [RECENT INFORMATION DISCLOSES THAT] the discharge of
7 oil may cause significant short and long-term damage to the state's environment; even
8 minute quantities of oil released to the environment may cause high mortalities among
9 larval and juvenile forms of important commercial species, may affect salmon
10 migration patterns, and may otherwise degrade and diminish the renewable resources
11 of the state;
12 (2) the exact nature and extent of oil pollution can be neither
13 documented with certainty nor precisely quantified on a spill-by-spill basis; however,
14 in light of the magnitude of harm that [WHICH] may be caused by oil discharges, and
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1 the vital importance of commercial, sport, and subsistence fishing, tourism, and the
2 state's natural abundance and beauty to the economic future of the state and its quality
3 of life, it is the judgment of the legislature that substantial civil penalties should be
4 imposed for the discharge of oil in order to provide a meaningful incentive for the safe
5 handling of oil and to ensure [INSURE] that the public does not bear substantial
6 losses from oil pollution for which, because of its subtle, long-term, or unquantifiable
7 nature, compensation would not otherwise be received; and
8 (3) the handling of oil in large quantities is a hazardous undertaking
9 that poses a significant threat to the economy and environment of the state, which can
10 be substantially reduced only by the taking of rigorous safety precautions involving
11 considerable expense; conversely, persons handling oil in smaller amounts pose a
12 correspondingly lower risk to the economy and environment of the state, and are
13 capable of safe oil handling practices at correspondingly lower costs; in order to
14 provide an incentive that is effective, [BUT NOT PUNITIVE,] it is necessary and
15 appropriate that the assessment of [CIVIL] penalties for discharges of small quantities
16 of oil be left for case-by-case [JUDICIAL] determination, while ensuring, through the
17 penalty provisions of this section, that the handling of oil in large quantities occurs in
18 a manner that will not impair the renewable resources of the state.
19 * Sec. 2. AS 46.03.758(b) is amended to read:
20 (b) The [NO LATER THAN THE 10TH DAY AFTER THE CONVENING
21 OF THE SECOND SESSION OF THE TENTH ALASKA LEGISLATURE, THE]
22 department shall establish in [SUBMIT TO THE LEGISLATURE] regulations
23 [ESTABLISHING] the following schedule of fixed penalties for discharges of oil:
24 (1) subject to (2) of this subsection, the penalties for the following
25 categories of receiving environments may not exceed
26 (A) $40 [$10] per gallon of oil that [WHICH] enters an
27 anadromous stream or other freshwater environment with significant aquatic
28 resources;
29 (B) $10 [$2.50] per gallon of oil that [WHICH] enters an
30 estuarine, intertidal or confined saltwater environment; and
31 (C) $4 [$1] per gallon of oil that [WHICH] enters an
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1 unconfined saltwater environment, public land or freshwater environment
2 without significant aquatic resources;
3 (2) for discharges of oil that are caused by the gross negligence or
4 intentional act of the discharger, or when the court finds that the discharger did not
5 take reasonable measures to contain and clean up the discharged oil, the penalty shall
6 be determined by multiplying the penalty established under (1) of this subsection by a
7 factor of five.
8 * Sec. 3. AS 46.03.758 is amended by adding a new subsection to read:
9 (m) The department shall, every 10 years, increase the amounts of the civil
10 penalties authorized in (b) of this section by a percentage equal to the percentage of
11 increase in all items of the Consumer Price Index for all urban consumers for
12 Anchorage, Alaska. The index for January of 2021 is the reference base index.
13 * Sec. 4. AS 46.03.759(a) is amended to read:
14 (a) A person who is found to be liable under any other state law for an
15 unpermitted discharge of crude oil in excess of 18,000 gallons is, in addition to
16 liability for any other penalties or for damages or the cost of containment and cleanup,
17 liable to the state in a civil action for a civil penalty, up to a maximum of
18 $500,000,000, in the amount of
19 (1) $16 [$8] per gallon of crude oil discharged for the first 420,000
20 gallons discharged; and
21 (2) $25 [$12.50] per gallon of crude oil discharged for amounts
22 discharged in excess of 420,000 gallons.
23 * Sec. 5. AS 46.03.759 is amended by adding new subsections to read:
24 (h) For the purpose of determining the volume of discharged crude oil under
25 this section, the department shall include the produced water, if any, that was mixed
26 with the discharged crude oil at the time of the discharge.
27 (i) The department shall, every 10 years, increase the amounts of the civil
28 penalties authorized in (a) of this section by a percentage equal to the percentage of
29 increase in all items of the Consumer Price Index for all urban consumers for
30 Anchorage, Alaska. The index for January of 2021 is the reference base index.
31 * Sec. 6. AS 46.03.760(a) is amended to read:
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1 (a) A person who violates or causes or permits to be violated a provision of
2 this chapter other than AS 46.03.250 - 46.03.313, or a provision of AS 46.04 or
3 AS 46.09, or a regulation, a lawful order of the department, or a permit, approval, or
4 acceptance, or term or condition of a permit, approval, or acceptance issued under this
5 chapter or AS 46.04 or AS 46.09 is liable, in a civil action, to the state for a sum to be
6 assessed by the court of not less than $2,000 [$500] nor more than $400,000
7 [$100,000] for the initial violation, nor more than $25,000 [$5,000] for each day after
8 that on which the violation continues, and that shall reflect, when applicable,
9 (1) reasonable compensation in the nature of liquidated damages for
10 any adverse environmental effects caused by the violation, which shall be determined
11 by the court according to the toxicity, degradability, and dispersal characteristics of
12 the substance discharged, the sensitivity of the receiving environment, and the degree
13 to which the discharge degrades existing environmental quality;
14 (2) reasonable costs incurred by the state in detection, investigation,
15 and attempted correction of the violation;
16 (3) the economic savings realized by the person in not complying with
17 the requirement for which a violation is charged; and
18 (4) the need for an enhanced civil penalty to deter future
19 noncompliance.
20 * Sec. 7. AS 46.03.760(d) is amended to read:
21 (d) In addition to liability under (a) and (c) [(a) - (c)] of this section, a person
22 who violates or causes or permits to be violated a provision of AS 46.03.740 -
23 46.03.750 is liable to the state, in a civil action brought under AS 46.03.822, for the
24 full amount of actual damages caused to the state by the violation, including
25 (1) direct and indirect costs associated with the abatement,
26 containment, or removal of the pollutant;
27 (2) restoration of the environment to its former state;
28 (3) amounts paid as grants under AS 29.60.510 - 29.60.599 and as
29 emergency first response advances and reimbursements under AS 46.08.070(c); and
30 (4) all incidental administrative costs.
31 * Sec. 8. AS 46.03.760(e) is amended to read:
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1 (e) A person who violates or causes or permits to be violated a provision of
2 AS 46.03.250 - 46.03.313, 46.03.460 - 46.03.475, AS 46.14, or a regulation, a lawful
3 order of the department, or a permit, approval, or acceptance, or term or condition of a
4 permit, approval, or acceptance issued under AS 46.03.250 - 46.03.313, 46.03.460 -
5 46.03.475, AS 46.14, or under the program authorized by AS 46.03.020(12), is liable,
6 in a civil action, to the state for a sum to be assessed by the court of not less than
7 $1,000 [$500] nor more than $200,000 [$100,000] for the initial violation, nor more
8 than $25,000 [$10,000] for each day after that on which the violation continues, and
9 that shall reflect, when applicable,
10 (1) reasonable compensation in the nature of liquidated damages for
11 any adverse environmental effects caused by the violation, that shall be determined by
12 the court according to the toxicity, degradability and dispersal characteristics of the
13 substance discharged, the sensitivity of the receiving environment, and the degree to
14 which the discharge degrades existing environmental quality; for a violation relating to
15 AS 46.14, the court, in making its determination under this paragraph, shall also
16 consider the degree to which the discharge causes harm to persons or property; for a
17 violation of AS 46.03.463, the court, in making its determination under this paragraph,
18 shall also consider the volume of the graywater, sewage, or other wastewater
19 discharged; this paragraph may not be construed to limit the right of parties other than
20 the state to recover for personal injuries or damage to their property;
21 (2) reasonable costs incurred by the state in detection, investigation,
22 and attempted correction of the violation;
23 (3) the economic savings realized by the person in not complying with
24 the requirement for which a violation is charged; and
25 (4) the need for an enhanced civil penalty to deter future
26 noncompliance.
27 * Sec. 9. AS 46.03.760(f) is amended to read:
28 (f) An owner, agent, employee, or operator of a commercial passenger vessel,
29 as defined in AS 43.52.295, who falsifies a registration or report required by
30 AS 46.03.460 or 46.03.475 or who violates or causes or permits to be violated a
31 provision of AS 46.03.250 - 46.03.314, 46.03.460 - 46.03.490, AS 46.14, or a
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1 regulation, a lawful order of the department, or a permit, approval, or acceptance, or
2 term or condition of a permit, approval, or acceptance issued under AS 46.03.250 -
3 46.03.314, 46.03.460 - 46.03.490, or AS 46.14 is liable, in a civil action, to the state
4 for a sum to be assessed by the court of not less than $10,000 [$5,000] nor more than
5 $200,000 [$100,000] for the initial violation, nor more than $25,000 [$10,000] for
6 each day after that on which the violation continues, and that shall reflect, when
7 applicable,
8 (1) reasonable compensation in the nature of liquidated damages for
9 any adverse environmental effects caused by the violation, that shall be determined by
10 the court according to the toxicity, degradability, and dispersal characteristics of the
11 substance discharged, the sensitivity of the receiving environment, and the degree to
12 which the discharge degrades existing environmental quality; for a violation relating to
13 AS 46.14, the court, in making its determination under this paragraph, shall also
14 consider the degree to which the discharge causes harm to persons or property; this
15 paragraph may not be construed to limit the right of parties other than the state to
16 recover for personal injuries or damage to their property;
17 (2) reasonable costs incurred by the state in detection, investigation,
18 and attempted correction of the violation;
19 (3) the economic savings realized by the person in not complying with
20 the requirement for which a violation is charged; and
21 (4) the need for an enhanced civil penalty to deter future
22 noncompliance.
23 * Sec. 10. AS 46.03.760(g) is amended to read:
24 (g) As used in this section, "economic savings" means the economic benefit
25 of noncompliance [THAT SUM WHICH A PERSON WOULD BE REQUIRED TO
26 EXPEND FOR THE PLANNING, ACQUISITION, SITING, CONSTRUCTION,
27 INSTALLATION AND OPERATION OF FACILITIES NECESSARY TO EFFECT
28 COMPLIANCE] with the standard violated. When determining an "economic
29 savings," the court may consider
30 (1) deferred and avoided costs of compliance with the standard
31 violated;
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1 (2) a competitive advantage gained by noncompliance with the
2 standard violated; and
3 (3) income derived as a result of noncompliance with the standard
4 violated from operations that were not authorized or permitted.
5 * Sec. 11. AS 46.03.760 is amended by adding new subsections to read:
6 (h) When assessing the need for an enhanced civil penalty to deter future
7 noncompliance under this section, the court may take into consideration
8 (1) the seriousness of the violation;
9 (2) the degree of culpability of the person;
10 (3) the history of previous violations of the person;
11 (4) other penalties assessed for the same violation;
12 (5) good faith efforts made by the person to comply with applicable
13 requirements and to minimize or mitigate the effects of the violations;
14 (6) the economic effect of the violation on the person; and
15 (7) other factors as justice may require.
16 (i) The department shall, every 10 years, increase the daily civil penalty caps
17 in (a), (e), and (f) of this section by a percentage equal to the percentage of increase in
18 all items of the Consumer Price Index for all urban consumers for Anchorage, Alaska.
19 The index for January of 2021 is the reference base index.
20 * Sec. 12. AS 46.03 is amended by adding a new section to read:
21 Sec. 46.03.762. Administrative penalties for discharges of oil and crude oil.
22 (a) In addition to the actions available under AS 46.03.758 - 46.03.760, the department
23 may assess an administrative penalty against a person who causes or permits a serious
24 discharge or repeat discharges of oil not permitted under applicable state or federal
25 law.
26 (b) An administrative penalty assessed under this section may not be less than
27 $500 nor more than $10,000 for each violation. When assessing a penalty under this
28 section, the department s