SENATE BILL REPORT

ESB 6085

BYSenators Kreidler, Newhouse, Gaspard and Owen; by request of Governor

Providing procedures to protect the public from hazardous substances.

Senate Staff:Henry Yates (786-7708)

AS PASSED SENATE, OCTOBER 10, 1987

BACKGROUND:

The federal Superfund hazardous waste cleanup program began in 1980 with the passage of the Comprehensive, Environmental Response, Compensation and Liability Act (CERCLA).  It was a $1.6 billion program to fund the cleanup of hazardous waste sites throughout the nation.  The program established a procedure for identifying, ranking, investigating and cleaning up hazardous waste sites.  The federal money was only to be used when a person responsible for cleaning up the site was unwilling or unable to take action.  Once the federal government cleaned up, it tried to recover its costs from those that were responsible for the contamination.  In 1986, Superfund was reauthorized by Congress with an $8.5 million program to last over five years.

Superfund is designed to address the worst sites in the nation and the states were required to clean up other less toxic sites within their boundaries.

When Superfund money is used to clean up a site, the state is required to provide 10 percent for sites owned by a private party and 50 percent for sites owned by another public entity (landfills, etc.).  The state is not required to provide any money when federally-owned sites are cleaned up.

In Washington, the Department of Ecology has identified 158 sites with known hazardous waste contamination.  About 25 are listed as eligible for federal Superfund monies.  The rest must be addressed by state government (Department of Ecology). Currently, matching money for federal Superfund dollars coming to the state and funds needed for state sites comes from the general fund.  The agency has estimated that it will need more than $28 million in the next two years in order to address the state sites and match Superfund money.  Local governments have estimated several hundreds of millions are needed to meet state hazardous and solid waste requirements and clean up contaminated landfills.

The Department of Ecology also administers state and federal water quality laws and has issued more than 1000 permits which include restrictions on what large industrial and municipal entities can discharge into state waters.  Most of the funds for administering this program come from the general fund.  The Puget Sound Water Quality Authority among others have criticized the Department of Ecology for not doing a good job of monitoring, inspecting, and renewing permits on a timely basis. The Authority has developed a recommended program to increase monitoring and provide better protection for Puget Sound and other areas throughout the state.  The Authority has also recommended that the Department of Ecology pay for its water quality permitting and monitoring program using fees assessed on industries or municipalities that are issued permits. Legislation in the 1986 and 1987 sessions to give Ecology the authority to assess fees did not pass.

In addition to hazardous waste cleanup and water quality monitoring responsibilities, the Department of Ecology is also responsible for regulating the day-to-day production, transportation, storage, treatment and disposal of hazardous in the state.  This program requires that the agency issue permits to facilities that manage hazardous waste and inspect and regulate entities producing hazardous waste.  This program is funded using a fee, authorized in 1983, which generates about $1.4 million annually.

The Department contends that to run an adequate program it needs more than $4 million yearly.

SUMMARY:

The Department of Ecology is granted authority to investigate hazardous waste sites.  The agency is required to develop rules to establish a system for ranking sites and to establish deadlines for investigations.  The agency is to provide biennial reports to the Legislature and in 1991 submit a thorough accounting of expenditures.

Persons who may be found liable, strictly, jointly and severally include those who own or operate the site and those who owned or operated it at the time hazardous substances were released.  Also potentially liable are transporters who arrange for disposal at the site or take waste to unapproved facilities.  Those who manufacture hazardous substances and are responsible for written instructions for their use when they are used in accordance with the label may also be found liable.

Exemptions from liability are provided for persons growing trees, nursery plants or farm products and apply pesticides according to law.  Homeowners applying hazardous substances on their property and their contractors are exempted, along with persons properly handling used motor oil for recycling. Exemptions are also provided for owners who had no knowledge of contamination when they acquired the site and contamination caused solely by acts of God, war or third parties.

Petroleum products are defined as hazardous substances, but the cleanup provisions only apply to petroleum listed as hazardous under federal law, is toxic under state law or is a solid waste decomposition product which threatens health or the environment.  The Department is given authority to investigate, respond to, clean up and recover costs for all petroleum contamination.

The petroleum section expires July 1, 1991, unless before that date, legislation is enacted to provide a cleanup program with specific funding for petroleum contamination from storage tanks.

Cleanups must be conducted to protect health and the environment and must meet all applicable state and federal laws. Where there are no applicable laws, standards can be developed by the agency on a case-by-case basis and deviations from applicable laws can be allowed.

The Department may reach settlement agreements with liable parties.  Rules and procedures for public notice and comment are required.  Liable parties who cannot reach a settlement with the Department may obtain an expedited court review on their final cleanup offer.

The Department may provide money as part of a settlement agreement if it will expedite or enhance cleanup operations or achieve greater economic fairness.  The agency must provide a covenant-not-to sue for cleanups where the waste is destroyed or permanently immobilized.  The agency must also provide a covenant-not-to-sue when the waste cannot be destroyed or immobilized and is taken to an approved facility and when the site is cleaned up to a level that will meet all applicable state laws.

Ecology may issue covenants-not-to-sue when case-by-case standards are met and when a deviation from applicable laws is allowed.  In both cases, public interest criteria must be met prior to covenant approval.

Cleanup contractors working for the Department, other public entities or private entities may be indemnified.  The agency is given authority to obtain information relevant to the site and may subpoena witnesses and documents.  Procedures are included for Department investigations and cleanups.

The Department of Ecology may issue cleanup orders or seek a court order requiring cleanup.  Wilful violations of cleanup orders may result in treble damages.  Civil penalties of up to $10,000 per day, assessed by the court are also allowed.

Citizens may file a lawsuit against the Department or a potentially responsible party to enforce compliance with the cleanup law or an approved settlement agreement.  Thirty-day notice of the suit is required.  Citizens suits against potentially responsible parties are not allowed if the Department is diligently pursuing cleanup.

When the state cleans up a site, it will have a lien on the property which is subject to pre-existing liens.

Owners of contaminated property are required to place a notice in the county property records.  The Department of Ecology is also to place a notice in the property records when it discovers contamination.  Sellers of property which has been contaminated for any of the prior 20 years are to provide a statement to the purchaser on the contamination.

Persons committing fraud in a settlement agreement, covenant-not-to-sue or certification of completion void any limits on liability granted and subject themselves to damage claims. Civil penalties of up to $10,000 per day may also be levied.

Programs are included for pesticide and household waste disposal and a business assistance program.

An eight-tenths of one percent tax on the wholesale value of a hazardous substance is to be levied on the first possession or sale of the substance.  Taxable substances include hazardous substances designated by the federal government, those classified by the Director of the Department of Ecology, petroleum products and pesticides.  The substances are to be taxed only once and successive possession of previously taxed substances is exempt.  Possession of alumina, natural gas, petroleum coke, petroleum exported outside the state for use as fuel and liquid fuel or fuel gas used in petroleum processing is exempted.

47 percent of the revenues are to go into the state toxics control account and used for state hazardous and solid waste management programs.  The account is also to be used for the hazardous waste cleanup program, assistance for local government solid and hazardous waste planning and other purposes.

53 percent of the tax is to be placed in the local toxics control account and used for grants and loans to local governments.  In descending order of priority, the money is to be used for:  1) cleanups of sites on the hazard ranking list; 2) hazardous waste plans and programs; 3) solid waste plans and programs and 4) solid waste facilities.  Matching requirements are to be developed by the Department of Ecology.

One percent of the monies deposited in the accounts is to used for public participation grants.  They may be provided to groups of 50 or more who may be adversely affected by a hazardous waste site and may only be used for technical assistance.  A 20 percent matching requirement is imposed and grants are not to exceed $50,000.

A toxics control reserve account is created to fund secondary cleanups at sites where covenants-not-to-sue have been issued and the first cleanup failed.  The account receives $3 million annually until it reaches $20 million and remains at that level.

Exemptions from specific environmental laws and permits are allowed for cleanups conducted in accordance with the act.

The crime of toxic endangerment is punishable as a class B felony and is established for persons handling hazardous substances in violation of state law.  The person must know that such handling places others in imminent danger or death or serious bodily injury.

Beginning in fiscal year 1989, the Department of Ecology is to recover administrative expenses for its water quality discharge permit system.  The total amount collected cannot exceed $3.6 million.  Administrative expenses are the costs to process permit applications and modify permits, monitor and evaluate permit compliance and conduct inspections.  They also include lab analysis, plan review and overhead expenses.  Costs related to enforcement and criminal investigation cannot be collected.

The Department is to establish an initial fee schedule to begin on July 1, 1988.  The fee for permits authorizing discharges of 800 gallons or less daily cannot exceed $150.  An accounting mechanism related to administrative expenses is to be established by January 1, 1989 and a report to the Legislature is required biennially beginning January 1, 1991.

Consideration of fee impacts on small dischargers is required and the Department must insure that indirect dischargers do not pay twice.  The agency cannot assess fees for permits issued by local government entities.  Ecology must review and deny or approve applications for credits from public entities that have monitoring programs before assessing fees.

The Department is to submit a report to the appropriate standing committees of the Legislature no later than January 1, 1989, that must include a fee schedule proposed for fiscal year 1990 and beyond.

Requirements for monitoring the state's waters must be reasonably related to determining permit compliance.  All known, available and reasonable treatment must be attained or the effects a discharger will have on water, animal life or sediment must be determined.  Monitoring must be structured so that if it is conducted within the terms of the permit, after an appropriate time, the permittee may request a reduced monitoring schedule.  If the Department determines the monitoring shows no adverse effect, a reduced schedule will apply.  If monitoring identifies measurable adverse effect or potentially measurable adverse effects, more frequent and/or comprehensive monitoring is to apply.

The act will be an alternative to Initiative 97.  If the initiative is certified, the Secretary of State is to place this act on the ballot with the initiative.  If this measure is approved in the 1988 general election, it is to remain in effect.

Effective Date:The bill contains an emergency clause and will take effect immediately.

SUMMARY OF SENATE AMENDMENTS:

The Department of Ecology is required to develop a ranking system for hazardous waste sites based on objective criteria.  The system must numerically assess the degree of risk at each site.

The Department of Ecology is provided a $3.6 million appropriation for the water quality fee portion of the bill.

The Department of Ecology is directed to arrange for collection of hazardous substances confiscated by law enforcement agencies when conducting drug-related activities.  The Department may provide financial assistance to local governments for disposal.  Anyone convicted of a drug-related crime involving hazardous substances confiscated by law enforcement agencies, upon conviction can be sentenced by the court to pay for disposal.  The money does not have to be placed in the public safety and education account.  The Department may seek reimbursement for its disposal costs from the convicted person.