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HB0205a -1- HB 205
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HOUSE BILL NO. 205
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - FIRST SESSION
BY REPRESENTATIVE JOSEPHSON
Introduced: 4/22/25
Referred: Judiciary, Resources
A BILL
FOR AN ACT ENTITLED
"An Act relating to penalties for discharges of oil and other pollution violations; relating 1
to the definition of 'waste' in the Alaska Oil and Gas Conserva tion Act; and providing 2
for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 31.05.170(15) is amended to read: 5
(15) "waste" means, in addition to its ordinary meaning, physical 6
waste ["PHYSICAL WASTE"] and includes 7
( A ) t h e i n e f f i c i e n t , e x c e s s ive, or improper use of, or 8
unnecessary dissipation of, reservoir energy; and the locating, spacing, drilling, 9
equipping, operating or producing of any oil or gas well in a m anner that 10
[WHICH] results or tends to result in reducing the quantity of oil or gas to be 11
recovered from a pool in this s tate under opera tions conducted in accordance 12
with good oil field engineering practices; 13
(B) the inefficient above-g round storage of oil; and the 14
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locating, spacing, drilling, equipping, operating, or producing of an oil or gas 1
well in a manner causing, or tending to cause, unnecessary or excessive surface 2
loss or destruction of oil or gas; 3
(C) producing oil or gas in a manner causing unnecessary water 4
channeling or coning; 5
(D) the operation of an oil well with an inefficient gas-oil ratio; 6
(E) the drowning with water o f a pool or part of a pool capabl e 7
of producing oil or gas, except insofar as and to the extent au thorized by the 8
commission; 9
(F) underground waste; 10
(G) the creation of unnecessary fire hazards; 11
(H) the release, burning, or escape into the open air of gas [ ,] 12
from a well producing oil or gas or from a pipeline carrying oil or gas , 13
except to the extent authorized by the commission; 14
(I) the use of gas for the manufacture of carbon black, except as 15
provided in this chapter; 16
(J) the drilling of wells unnece ssary to carry out the purpose or 17
intent of this chapter. 18
* Sec. 2. AS 46.03.758(a) is amended to read: 19
(a) The legislature finds that 20
(1) [RECENT INFORMATION DISCLOSES THAT] the discharge of 21
oil may cause significant short and long-term damage to the sta te's environment; even 22
minute quantities of oil released to the environment may cause high mortalities among 23
larval and juvenile forms of im portant commercial species, may affect salmon 24
migration patterns, and may otherwise degrade and diminish the renewable resources 25
of the state; 26
(2) the exact nature and extent of oil pollution can be neithe r 27
documented with certainty nor precisely quantified on a spill-b y-spill basis; however, 28
in light of the magnitude of harm that [WHICH] may be caused by oil discharges, and 29
the vital importance of commercial, sport, and subsistence fish ing, tourism, and the 30
state's natural abundance and beauty to the economic future of the state and its quality 31
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of life, it is the judgment of the legislature that substantial civil penalties should be 1
imposed for the discharge of oil in order to provide a meaningful incentive for the safe 2
handling of oil and to ensure [ I N S U R E ] t h a t t h e p u b l i c does not bear substantial 3
losses from oil pollution for which, because of its subtle, lon g-term, or unquantifiable 4
nature, compensation would not otherwise be received; and 5
(3) the handling of oil in lar ge quantities is a hazardous und ertaking 6
that poses a significant threat to the economy and environment of the state, which can 7
be substantially reduced only by the taking of rigorous safety precautions involving 8
considerable expense; conversely, persons handling oil in small er amounts pose a 9
correspondingly lower risk to the economy and environment of th e state, and are 10
capable of safe oil handling practices at correspondingly lower costs; in order to 11
provide an incentive that is effective, [BUT NOT PUNITIVE,] it is necessary and 12
appropriate that the assessment of [CIVIL] penalties for discha rges of small quantities 13
of oil be left for case-by-case [JUDICIAL] determination, while ensuring, through the 14
penalty provisions of this secti on, that the handling of oil in large quantities occurs in 15
a manner that will not impair the renewable resources of the state. 16
* Sec. 3. AS 46.03.758(b) is amended to read: 17
(b) The [NO LATER THAN THE 10TH DAY AFTER THE CONVENING 18
OF THE SECOND SESSION OF THE TENTH ALASKA LEGISLATURE, THE] 19
department shall establish in [SUBMIT TO THE LEGISLATURE] regulations 20
[ESTABLISHING] the following schedule of fixed penalties for discharges of oil: 21
(1) subject to (2) of this subsection, the penalties for the f ollowing 22
categories of receiving environments may not exceed 23
(A) $40 [$10] per gallon of oil that [ W H I C H ] e n t e r s a n 24
anadromous stream or other freshwater environment with signific ant aquatic 25
resources; 26
(B) $10 [$2.50] per gallon of oil that [ W H I C H ] e n t e r s a n 27
estuarine, intertidal or confined saltwater environment; and 28
(C) $4 [$1] per gallon of oil that [ W H I C H ] e n t e r s a n 29
unconfined saltwater environment, public land or freshwater env ironment 30
without significant aquatic resources; 31
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( 2 ) f o r d i s c h a r g e s o f o i l t h a t a r e c a u s e d b y t h e g r o s s n e g l i g ence or 1
intentional act of the discharger , or when the court finds that the discharger did not 2
take reasonable measures to contain and clean up the discharged oil, the penalty shall 3
be determined by multiplying the penalty established under (1) of this subsection by a 4
factor of five. 5
* Sec. 4. AS 46.03.758 is amended by adding a new subsection to read: 6
(m) The department shall, every 10 years, increase the amounts o f th e c iv il 7
penalties authorized in (b) of this section by a percentage equ al to the percentage of 8
increase in all items of the Consumer Price Index for all urban consumers for urban 9
Alaska. The index for January of 2025 is the reference base index. 10
* Sec. 5. AS 46.03.759(a) is amended to read: 11
(a) A person who is found to be liable under any other state l a w f o r a n 12
unpermitted discharge of crude o il in excess of 18,000 gallons is, in addition to 13
liability for any other penalties or for damages or the cost of containment and cleanup, 14
liable to the state in a civil action for a civil penalty, up t o a maximum of 15
$500,000,000, in the amount of 16
(1) $20 [$8] per gallon of crude oil di scharged for the first 420,000 17
gallons discharged; and 18
(2) $30 [$12.50] per gallon of crude o il discharged for amounts 19
discharged in excess of 420,000 gallons. 20
* Sec. 6. AS 46.03.759 is amended by adding new subsections to read: 21
(h) For the purpose of determining the volume of discharged cr ude oil under 22
this section, the department sha ll include the produced water, if any, that was mixed 23
with the discharged crude oil at the time of the discharge. 24
(i) The department shall, every 10 years, increase the amounts o f t h e c i v i l 25
penalties authorized in (a) of this section by a percentage equ al to the percentage of 26
increase in all items of the Consumer Price Index for all urban consumers for urban 27
Alaska. The index for January of 2025 is the reference base index. 28
* Sec. 7. AS 46.03.760(a) is amended to read: 29
(a) A person who violates or causes or permits to be violated a provision of 30
this chapter other than AS 46.03.250 - 46.03.313, or a provisio n of AS 46.04 or 31
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AS 46.09, or a regulation, a lawful order of the department, or a permit, approval, or 1
acceptance, or term or condition of a permit, approval, or acce ptance issued under this 2
chapter or AS 46.04 or AS 46.09 is liable, in a civil action, t o the state for a sum to be 3
assessed by the court of not less than $2,000 [$500] nor more than $400,000 4
[$100,000] for the initial violation, nor more than $25,000 [$5,000] for each day after 5
that on which the violation continues, and that shall reflect, when applicable, 6
(1) reasonable compensation in t he nature of liquidated damage s for 7
any adverse environmental effects caused by the violation, whic h shall be determined 8
by the court according to the toxicity, degradability, and disp ersal characteristics of 9
the substance discharged, the sensitivity of the receiving envi ronment, and the degree 10
to which the discharge degrades existing environmental quality; 11
(2) reasonable costs incurred by the state in detection, inves tigation, 12
and attempted correction of the violation; 13
(3) the economic savings realized by the person in not complyi ng with 14
the requirement for which a violation is charged; and 15
(4) the need for an enhanced civil penalty to deter future 16
noncompliance. 17
* Sec. 8. AS 46.03.760(d) is amended to read: 18
(d) In addition to liability under (a) and (c) [(a) - (c)] of this section, a person 19
who violates or causes or permits to be violated a provision of AS 46.03.740 - 20
46.03.750 is liable to the state, in a civil action brought und er AS 46.03.822, for the 21
full amount of actual damages caused to the state by the violation, including 22
(1) direct and indirect costs associated with the abatement, 23
containment, or removal of the pollutant; 24
(2) restoration of the environment to its former state; 25
(3) amounts paid as grants under AS 29.60.510 - 29.60.599 and as 26
emergency first response advances and reimbursements under AS 46.08.070(c); and 27
(4) all incidental administrative costs. 28
* Sec. 9. AS 46.03.760(e) is amended to read: 29
(e) A person who violates or causes or permits to be violated a provision of 30
AS 46.03.250 - 46.03.313, 46.03.460 - 46.03.475, AS 46.14, or a regulation, a lawful 31
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order of the department, or a permit, approval, or acceptance, or term or condition of a 1
permit, approval, or acceptance issued under AS 46.03.250 - 46. 03.313, 46.03.460 - 2
46.03.475, AS 46.14, or under the program authorized by AS 46.0 3.020(12), is liable, 3
in a civil action, to the state f or a sum to be assessed by the c o u r t o f n o t l e s s t h a n 4
$1,000 [$500] nor more than $200,000 [$100,000] for the initia l violation, nor more 5
than $25,000 [$10,000] for each day after that on which the violation conti nues, and 6
that shall reflect, when applicable, 7
(1) reasonable compensation in t he nature of liquidated damage s for 8
any adverse environmental effects caused by the violation, that shall be determined by 9
the court according to the toxicity, degradability and dispersa l characteristics of the 10
substance discharged, the sensitivity of the receiving environm ent, and the degree to 11
which the discharge degrades existing environmental quality; for a violation relating to 12
AS 46.14, the court, in making its determination under this par agraph, shall also 13
consider the degree to which the discharge causes harm to perso ns or property; for a 14
violation of AS 46.03.463, the court, in making its determination under this paragraph, 15
shall also consider the volume of the graywater, sewage, or oth er wastewater 16
discharged; this paragraph may not be construed to limit the ri ght of parties other than 17
the state to recover for personal injuries or damage to their property; 18
(2) reasonable costs incurred by the state in detection, inves tigation, 19
and attempted correction of the violation; 20
(3) the economic savings realized by the person in not complyi ng with 21
the requirement for which a violation is charged; and 22
( 4 ) t h e n e e d f o r a n e n h a n c e d civil penalty to deter future 23
noncompliance. 24
* Sec. 10. AS 46.03.760(f) is amended to read: 25
(f) An owner, agent, employee, or operator of a commercial pas senger vessel, 26
as defined in AS 43.52.295, who falsifies a registration or rep ort required by 27
AS 46.03.460 or 46.03.475 or who violates or causes or permits to be violated a 28
provision of AS 46.03.250 - 46.03.314, 46.03.460 - 46.03.490, A S 46.14, or a 29
regulation, a lawful order of th e department, or a permit, appr oval, or acceptance, or 30
term or condition of a permit, approval, or acceptance issued u nder AS 46.03.250 - 31
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46.03.314, 46.03.460 - 46.03.490, or AS 46.14 is liable, in a c ivil action, to the state 1
for a sum to be assessed by the court of not less than $10,000 [$5,000] nor more than 2
$200,000 [$100,000] for the initial violation, nor more than $25,000 [$10,000] for 3
each day after that on which the violation continues, and that shall reflect, when 4
applicable, 5
(1) reasonable compensation in t he nature of liquidated damage s for 6
any adverse environmental effects caused by the violation, that shall be determined by 7
the court according to the toxicity, degradability, and dispers al characteristics of the 8
substance discharged, the sensitivity of the receiving environm ent, and the degree to 9
which the discharge degrades existing environmental quality; for a violation relating to 10
AS 46.14, the court, in making its determination under this par agraph, shall also 11
consider the degree to which the discharge causes harm to perso ns or property; this 12
paragraph may not be construed to limit the right of parties ot her than the state to 13
recover for personal injuries or damage to their property; 14
(2) reasonable costs incurred by the state in detection, inves tigation, 15
and attempted correction of the violation; 16
(3) the economic savings realized by the person in not complyi ng with 17
the requirement for which a violation is charged; and 18
( 4 ) t h e n e e d f o r a n e n h a n c e d civil penalty to deter future 19
noncompliance. 20
* Sec. 11. AS 46.03.760(g) is amended to read: 21
(g) As used in this section, "economic savings" means the economic benefit 22
of noncompliance [THAT SUM WHICH A PERSON WOULD BE REQUIRED TO 23
EXPEND FOR THE PLANNING, ACQUISITION, SITING, CONSTRUCTION, 24
INSTALLATION AND OPERATION OF FACILITIES NECESSARY TO EFFECT 25
COMPLIANCE] with the standard violated. When determining an "economic 26
savings," the court may consider 27
(1) deferred and avoided costs of compliance with the standard 28
violated; 29
(2) a competitive advantage gai ned by noncompliance with the 30
standard violated; and 31
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(3) income derived as a result of noncompliance with the stand ard 1
violated from operations that were not authorized or permitted. 2
* Sec. 12. AS 46.03.760 is amended by adding new subsections to read: 3
( h ) W h e n a s s e s s i n g t h e n e e d f o r a n e n h a n c e d c i v i l p e n a l t y t o deter future 4
noncompliance under this section, the court may take into consideration 5
(1) the seriousness of the violation; 6
(2) the degree of culpability of the person; 7
(3) the history of previous violations of the person; 8
(4) other penalties assessed for the same violation; 9
(5) good faith efforts made by the person to comply with appli cable 10
requirements and to minimize or mitigate the effects of the violations; 11
(6) the economic effect of the violation on the person; and 12
(7) other factors as justice may require. 13
(i) The department shall, every 10 years, increase the daily c ivil penalty caps 14
in (a), (e), and (f) of this section by a percentage equal to t he percentage of increase in 15
all items of the Consumer Price Index for all urban consumers f or urban Alaska. The 16
index for January of 2025 is the reference base index. 17
* Sec. 13. AS 46.03 is amended by adding a new section to read: 18
Sec. 46.03.762. Administrative penalties for discharges of oil and crude oil. 19
(a) In addition to the actions available under AS 46.03.758 - 46.03.760, the department 20
may assess an administrative penalty against a person who cause s or permits a serious 21
discharge or repeat discharges of oil not permitted under appli cable state or federal 22
law. 23
(b) An administrative penalty assessed under this section may not be less than 24
$500 nor more than $10,000 for each violation. When assessing a penalty under this 25
section, the department shall consider 26
(1) the effect of the discharge on the public health or the environment; 27
(2) reasonable costs incurred by the state in the detection, 28
investigation, and attempted correction of the discharge; 29
(3) any previous history of compliance or noncompliance by the 30
person with this chapter, AS 46.04, AS 46.09, and AS 46.14; 31
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(4) the need to deter future discharges; and 1
(5) the volume, extent, and seriousness of the discharge, incl uding the 2
potential for the discharge to threaten public health or the environment. 3
(c) If a person fails to pay an administrative penalty assesse d under this 4
section, the department may bring an action to collect the pena lty. The amount of the 5
penalty is not subject to review by the court in an action to c ollect the penalty 6
described in this section. 7
(d) In a collection action under (c) of this section, the cour t shall award the 8
prevailing party full reasonable attorney fees and costs incurr ed in the collection 9
action. 10
(e) Action under this section by the department does not limit or otherwise 11
affect the authority of the department to otherwise enforce thi s chapter, AS 46.04, 12
AS 46.08, AS 46.09, AS 46.14, or regula tions adopted under thos e statutes, or to 13
recover damages, restoration expe nses, investigation costs, cou rt costs, attorney fees, 14
or other necessary expenses. The court shall set off against a judicial civil assessment 15
subsequently awarded under AS 46.03.758, 46.03.759, or 46.03.76 0 an amount 16
ordered to be paid under this section by the same person for the same discharge. 17
(f) For the purpose of determining the volume of discharged oi l under this 18
section, the department shall include the produced water, if an y, that was mixed with 19
the discharged oil at the time of the discharge. 20
(g) The department shall, every 10 years, increase the amounts o f t h e 21
administrative penalties authorized in (b) of this section by a percentage equal to the 22
percentage of increase in all items of the Consumer Price Index for all urban 23
consumers for urban Alaska. The index for January of 2025 is th e reference base 24
index. 25
(h) In this section, 26
(1) "discharge" means entry of oil into or on the water or public land of 27
the state, regardless of causa tion, except discharges into an e nclosed and impervious 28
oil spill containment area; 29
(2) "oil" means crude oil, petroleum, and any substance refine d from 30
petroleum. 31
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* Sec. 14. AS 46.03.900 is amended by adding a new paragraph to read: 1
(38) "produced water" means water that is the byproduct of the 2
exploration, extraction, developm ent, production, refining, pro cessing, or disposal of 3
energy-related products. 4
* Sec. 15. AS 46.03.758(c) and 46.03.760(b) are repealed. 5
* Sec. 16. This Act takes effect January 1, 2026. 6