HOUSE BILL REPORT
ESB 6440
As Amended by the House
BYSenators Kreidler, Newhouse, Gaspard, Owen, Hayner, Vognild and Bauer
Providing for the clean-up of hazardous wastes.
House Committe on Environmental Affairs
Majority Report: Do pass. (9)
Signed by Representatives Rust, Chair; Ferguson, Jesernig, May, Pruitt, Schoon, D. Sommers, Sprenkle and Walker.
Minority Report: Do not pass. (4)
Signed by Representatives Valle, Vice Chair; Brekke, Lux and Unsoeld.
House Staff:Bonnie Austin (786-7107)
AS PASSED HOUSE FEBRUARY 29, 1988
BACKGROUND:
The Department of Ecology (Ecology) has identified over 150 sites in the state that have become contaminated by hazardous wastes. About twenty-five of these sites are eligible for cleanup funding under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Under CERCLA, sites containing the worst contamination are placed on the National Priorities List (NPL). Clean up of NPL sites is paid for in part by the federal government, but a state match is required. States are required to pay 10 percent of the cost of cleaning up private NPL sites and 50 percent of the costs of cleaning up public NPL sites. Since only the most severely contaminated sites are eligible for funding under CERCLA, the majority of sites in Washington are not eligible for federal money. The remaining sites must be addressed by the state.
In addition to cleaning up sites, the state is responsible for the ongoing regulation of hazardous wastes. Under the Hazardous Waste Management Act (RCW 70.105) Ecology is directed to regulate the production, transportation, storage, treatment and disposal of hazardous wastes.
In order to fund both the hazardous waste regulatory program and a state cleanup program, and to provide authority for Ecology to enforce cleanup actions, the legislature passed the Hazardous Waste Fee Act in 1983. This act imposed fees on all persons who generate, treat, store or dispose of hazardous wastes. However, this fund has not been adequate to cover the costs of either the regulatory program or the cleanup program. The unfunded portion of the regulatory program and all cleanup costs are currently borne by the general fund.
Ecology also administers state and federal water quality laws and water quality discharge permits. The Puget Sound Water Quality Authority has recommended that a program be established to increase monitoring and that administration of water quality permitting be financed through fees on the municipalities and industries that are issued permits.
Over the past four years the legislature has worked on updating the state hazardous waste and water quality permit laws. Initiative 97 was filed in August of 1987 to address these issues. In October of 1987 the legislature enacted SB 6085 which was intended as an alternative to Initiative 97. Although SB 6085 is currently effective, there is legal ambiguity as to whether it can be placed on the ballot as the alternative to Initiative 97. To ensure that the October legislation is placed on the ballot as the alternative to Initiative 97, reenactment of the provisions of SB 6085 is necessary.
SUMMARY:
Liability and Exemptions
Generally, persons who generate or transport hazardous substances, or who own or operate a hazardous waste site are responsible for proper handling of the hazardous substance. If hazardous substances are released into the environment, these persons are subject to strict, joint and several liability for the costs of cleanup.
Persons who both sell hazardous substances and prepare written instructions for the their use are also liable. For instance, pesticide manufacturers would be liable for clean up costs at sites contaminated by pesticides used in accordance with the manufacturers written instructions.
The following parties are exempt from liability: (1) Persons who can prove that the release was caused by an act of war, an act of God, or an act or omission of a third party not employed by or under the control of the defendant; (2) Innocent purchasers of property, if such purchasers made reasonable inquiry into the previous ownership of the property; (3) Persons who non-negligently apply a hazardous substance for any personal or domestic purpose (including employees and contractors); (4) Persons who non-negligently apply pesticides or fertilizers for the purpose of producing any farm product or crop, farm animals, nursery plants, or growing Christmas trees or trees for the production of timber; (5) Persons who non-negligently collect used motor oil for recycling; (6) State and local governments that involuntarily acquire title to a hazardous waste facility; and (7) Security interest holders who: (a) Loan monies for clean up; or (b) Do not exercise more than customary control over the facility and do not operate the facility or assume business decisions.
Spills of petroleum products that are designated a hazardous substance under federal law, an extremely hazardous waste under state law, or certain solid waste decomposition products are covered under this act. Other petroleum products are defined as hazardous substances, but are exempt from most of the provisions of the act. However, Ecology is authorized to compel or perform the clean up of discharges of "exempted" petroleum products and to recover costs from responsible parties. Liability for such spills is strict, joint and several. The petroleum exemption expires July 1, 1990 unless a comprehensive clean up program with specific funding sources is enacted for releases of petroleum from storage tanks.
Investigations and Remedial Actions
If Ecology has a reason to believe there may be a release or threatened release of a hazardous substance it can: (1) Require information relevant to the release from anyone who has such information; and (2) Upon reasonable notice, enter property to sample or inspect. In an emergency situation, no notice is required. Ecology is required to provide a copy of the results of any analysis to the responsible person, as well as a portion of each sample taken, if requested.
After the investigation, Ecology will notify persons who may be responsible for the contamination and provide them with a reasonable opportunity to propose a settlement agreement providing for remedial action. Ecology shall establish by rule procedures for proposed settlement agreements, along with reasonable deadlines. Public notice and comment opportunities must be provided. If Ecology accepts the offer, it shall be entered as a consent decree. If Ecology rejects the offer, the reasons for rejection must be stated in writing. Denial of a final settlement offer may be appealed to superior court. Ecology's decision must be upheld unless Ecology's decision was clearly erroneous.
Settlement agreements must contain specified clean up standards. These standards must conform to all applicable state and federal laws, unless Ecology determines that alternative clean up levels would assure protection of human health and the environment. If there are no applicable laws, Ecology will set standards on a case-by-case basis.
Settlements agreements may include the provision of money from the state Toxics Control Account to fund clean ups by responsible parties when such funding would expedite or enhance clean up operations or achieve greater fairness.
If the responsible parties fail to submit a plan or if an unacceptable plan is submitted, the responsible parties are liable for the costs incurred by Ecology in cleaning up the site.
When the responsible parties have implemented the response action plan, they may apply to Ecology for certification of completion. Ecology will accept public comment on the application for 45 days. If the plan has been fully implemented Ecology will issue a certification of completion.
Covenants Not to Sue
As part of a settlement agreement, Ecology is authorized to grant a covenant not to sue to the settling parties. A covenant not to sue will limit the responsible parties' future liability to the state. If Ecology grants a covenant not to sue to the responsible parties and later finds that the site needs additional cleanup, the state can not sue the settling party for clean up costs. A covenant not to sue will apply only to those hazardous substances or those areas specifically identified in the covenant.
Ecology must grant a requested covenant not to sue for any remedial action that will accomplish: (1) Destruction or elimination of the hazardous substances; (2) Transportation of the hazardous substances to an approved disposal facility; or (3) Compliance with the express standards of applicable state and federal laws.
If Ecology finds that the issuance of a covenant is in the public interest, it may issue a covenant when the plan's clean up standards: (1) Are set on a case-by-case basis; or (2) Deviate from existing standards, and compliance with otherwise applicable standards is technically impracticable from an engineering perspective, and the plan provides optimum protection of human health and the environment. The public interest criteria required for all discretionary covenants are enumerated.
Enforcement / Penalties
Ecology may issue orders to enforce the requirements of this act. Any person who wilfully fails to comply with a clean up order is subject to a civil penalty of up to three times Ecology's response action costs and $10,000 per day of non- compliance. Additionally, any potentially liable person who commits fraud is subject to a civil penalty of $10,000, and any covenant not to sue or other limitation on liability issued in connection with the fraud is void.
It is a Class B felony for any person to knowingly transport, treat, store, handle, dispose of, or export a hazardous substance or toxin in violation of state law if such conduct places another person in imminent danger of death or serious bodily injury.
Public and Business Assistance
Ecology may provide public participation grants of up to $50,000 to groups of fifty or more persons adversely affected by a release or threatened release. Grants may only be used to provide technical assistance in interpreting information. Grant recipients must provide a 20 percent match.
The director of the Department of Agriculture is authorized to develop a program to take possession and dispose of pesticides held by persons regulated under the Washington Pesticide Application Act. Fees may be charged to persons disposing of pesticides to offset the costs of the disposal program.
Ecology may establish a program to take possession and dispose of household hazardous waste and shall provide technical assistance to local governments providing such services. Additionally, Ecology shall contract with a non-profit organization to establish a program to provide technical assistance to small businesses to promote waste reduction and recycling.
Miscellaneous Provisions
Ecology's decisions regarding acceptance of a final proposed settlement offer, investigative or remedial action plans, identification of potentially liable parties, imposition of enforcement orders or penalties, or certificates of completion are subject to judicial review.
Citizens suits are allowed: (1) By an aggrieved person against responsible parties; and (2) By any person to compel Ecology to performance any non-discretionary duty. No action against Ecology may be commenced where Ecology is diligently pursuing remedial actions or enforcement.
A lien will be imposed on the property of responsible parties who owe a debt to the state for cleanup costs. The lien arises at the time costs are first incurred for remedial action. The lien is subject to the rights of any purchaser, holder of a security interest, or judgment lien creditor whose interest is perfected before notice of the lien is filed.
Under certain circumstances, an owner of nonresidential property that has been contaminated by hazardous substances must place a notice of this occurrence in the county auditor's records. Ecology is also responsible for filing notices and retaining records. This information must be supplied in writing to any purchaser of the property.
Ecology is directed to arrange for collection of hazardous substances confiscated by law enforcement agencies when conducting drug-related activities.
Clean up actions taken under this chapter are exempt from the provisions of the State Environmental Policy Act and from permits required by other environmental laws.
This act will constitute the legislative alternative to Initiative 97. Chapter 2, Laws of 1987, 3rd Executive Session will expire March 1, 1989. However if the voters fail to approve this act and Initiative 97, the expiration date is the date the election results are certified.
Water Quality Discharge Fees
By July 1, 1988, Ecology is directed to establish a fee schedule to recover administrative costs incurred in operating its water quality discharge permit system. Administrative expenses are defined to include the costs of processing permits, monitoring compliance, inspections, lab analysis, reviewing plans, and direct overhead expenses.
The total amount that can be collected in any year is $3.6 million. A fee cap of $150 per year is set for dischargers of less than 800 gallons per day. In developing the fee schedule, Ecology shall consult with representatives of dischargers, environmental organizations, state agencies and others. Ecology shall consider the economic impact of fees on small dischargers when setting fees and make appropriate adjustments.
Public entities may receive credits for comprehensive monitoring programs, as long as these credits do not exceed 25 percent of the permit fees assessed over a five-year period. Total credit may not exceed $50,000 for the five-year period.
Permit monitoring requirements must be reasonably related to permit compliance, attaining required treatment levels, and their effects on the receiving waters, biota, or sediment.
By January 1, 1989 Ecology shall: (1) Report on the proposed fee schedule for 1990 and beyond; and (2) Establish an accounting mechanism to relate administrative expenses incurred with fees charged. By January 1, 1991 and biennially thereafter, Ecology shall report on the permit system.
Funding
A tax is imposed on the first possession of hazardous substances at the rate 0.8 percent multiplied by the wholesale value of the substance. Taxable substances include federally designated hazardous substances, petroleum products, pesticides, and those substances classified by Ecology as posing a threat to human health or the environment. Possession of alumina, natural gas, petroleum coke, petroleum exported out of the state for use as fuel, and liquid fuel or fuel gas used in petroleum processing is exempted from the tax. Additionally, credit is allowed for fuel carried from the state in the fuel tank of any vehicle and for any hazardous substance tax paid to another state on the same substance.
The State Toxics Control Account is created. The account will consist of 47 percent of the revenues received from the hazardous substance tax, funds from penalties, and costs recovered from responsible parties. The money in the state account may be used for: (1) Solid and hazardous waste planning, management, regulation, enforcement, technical assistance, and public education; (2) Hazardous waste cleanup; (3) State matching funds required under CERCLA; (4) Financial assistance for local solid and hazardous waste programs; (5) Programs for disposal of wastes from households, small businesses, and agriculture; (6) Hazardous materials emergency response training; (7) Water and health protection and monitoring programs; (8) Financing of water pollution control facilities; (9) Public participation grants; (10) Assistance to potentially liable parties to partially fund private clean ups; and (11) Development of alternative management technologies to encourage hazardous waste reduction and recycling.
The Local Toxics Control Account is created. The account will consist of 53 percent of revenues from the hazardous substance tax. The money in the local account may be used to make grants and loans to local governments for: (1) Clean ups on the hazard ranking lists; (2) Hazardous and solid waste plans and programs; and (3) Solid waste disposal and management facilities. Local government matching requirements are to be developed by Ecology.
A Toxic Control Reserve Account is created to fund clean ups at sites where covenants not to sue were issued and the first clean up failed. The fund will consist of $3 million from equal transfers from the state and local toxic accounts until the balances reaches $20 million.
The Hazardous Waste Fee Act is repealed.
Appropriation: $14,836,000 to the Department of Ecology; 234,000 to the Department of Agriculture; $384,000 to the Department of Community Development; $106,000 to the Department of Revenue; and $710,000 to the Department of Social and Health Services from the State Toxics Control Account.
$18,685,000 to the Department of Ecology from the Local Toxics Control Account.
$3,000,000 to the Department of Ecology from the Toxics Control Reserve Account.
$3,600,000 to the Department of Ecology from the Water Quality Permit Account.
Fiscal Note: Requested February 9, 1988.
Effective Date:This bill takes effect on March 1, 1989.
House Committee ‑ Testified For: None Presented.
House Committee - Testified Against: None Presented.
House Committee - Testimony For: None Presented.
House Committee - Testimony Against: None Presented.