Legislature(2001 - 2002)

01/17/2001 03:40 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          SB  16-OIL DISCH PREVENTION: NONTANK VESSELS/RR                                                                   
CHAIRMAN JOHN TORGERSON called the Senate Resources Committee                                                                 
meeting to order at 3:40 p.m. and announced SB 16 to be up for                                                                  
SENATOR PEARCE  said she was a member of the steering  committee for                                                            
the Task  Force on  Motorized Oil  Transport (TFMOT)  and the  prime                                                            
sponsor of  SB 273 last year.   She gave  a heart-felt thank  you to                                                            
all the other steering  committee members who came together for many                                                            
long  hours and  worked  together  to find  consensus  solutions  to                                                            
problems for the state's safety net for marine transportation.                                                                  
MR.  LARRY DIETRICK,  Director,  Division  of Spill  Prevention  and                                                            
Response,  said he  was addressing  them on  behalf of Commissioner                                                             
Brown, Chair  of the TFMOT.   He said the  goal of SB 16 is  simple:                                                            
"to protect  Alaska's renewable resources  and keep Alaska's  waters                                                            
the cleanest  and  most pristine  in the  world  by including  large                                                            
seagoing marine  nontank vessels and the Alaska Railroad  and Alaska                                                            
Safety Net for Oil Spill Prevention and Response."                                                                              
The  TFMOT was  commissioned  "to work  out  the details  of how  to                                                            
implement  oil spill  contingency  plans (c-plans)  and achieve  the                                                            
response  planning standard  in a way that  was acceptable  to those                                                            
who would  be affected."   Although  the requirement  for  financial                                                            
responsibility was made  effective last year, Mr. Dietrick said, the                                                            
requirement  to  have an  oil  spill  c-plan  to meet  the  response                                                            
planning standard was not  and the legislature commissioned the Task                                                            
Force through  SB 273 and  SCR 1 to determine  how to implement  the                                                            
standards and  provide opportunities  for streamlining them.   Those                                                            
standards were set out  in SB 273 as the "containment and control of                                                            
15 percent of the maximum  oil capacity of a nontank vessel or train                                                            
within 48  hours and cleanup  of the discharge  within the  shortest                                                            
possible   time   consistent   with   minimizing   damage   to   the                                                            
Nontank  vessels were  defined as  self-propelled  vessels over  400                                                            
gross  tons, not  including  tank  vessels,  oil barges,  or  public                                                            
MR. DIETRICK  said  SCR 1  created 23  member task  force to  ensure                                                            
diversity of  viewpoints and adequate  representation of  all groups                                                            
to  be  regulated.    Many  more  people  who  were   not  appointed                                                            
representatives  attended the  work group  sessions and formal  task                                                            
force meetings.   There were 11 meetings  over a five-month  period.                                                            
Three  work  groups  were  created  to  address  specific  areas  of                                                            
He said  that the recommendations  of the  Task Force are  practical                                                            
and include implementation  measures that use a market-based economy                                                            
approach to  keep costs down.  They  are based on Alaska's  existing                                                            
oil spill response  infrastructure  and provide maximum flexibility                                                             
for  meeting the  requirements.   Private  sector  initiatives  have                                                            
already  been fostered  that significantly  increase  the  resources                                                            
that will be  brought to bear on a  spill.  "Alliances between  ship                                                            
agents, stevedoring  companies, and spill response  cooperatives are                                                            
now being explored to meet  response needs and a new marine exchange                                                            
covering  the entire  state of Alaska  is being  created." The  Task                                                            
Force unanimously agreed  to support 31 separate recommendations and                                                            
recommended that  they be adopted without amendment  since the legal                                                            
nuances and details  have all been agreed to. He said  that the Task                                                            
Force recommendations are  in the interests of all Alaskans and will                                                            
help protect Alaska's  natural resources and make  the state's spill                                                            
response the best in the world.                                                                                                 
Number 729                                                                                                                      
MR. BRIAN  ROGERS, Principal  and CRO of Info  Insights and  a  Task                                                            
Force  member, said  the process  of negotiated  rule making  worked                                                            
very well  in this case.   The legislation  is straightforward,  but                                                            
the total  process is somewhat  complex and  is designed to  address                                                            
very different  kinds of  businesses that  are operating in  Alaskan                                                            
waters, ranging  from cruise ships on a fixed predictable  course to                                                            
spot charter vessels that  may announce their arrival only five days                                                            
in advance to the Alaska Railroad.                                                                                              
He pointed out  that the objectives of the Task Force  (on page 8 of                                                            
the report) are:                                                                                                                
   · that this process be realistic - capable of being implemented                                                              
     within available technology and expertise in a reasonable time                                                             
   · that it's effective - providing real protection to the                                                                     
     environment at the level required by law;                                                                                  
   · that it is economically feasible - it can be implemented                                                                   
     without imposing unreasonable cost increases on the vessel                                                                 
     owners, operators, or on their customers; and                                                                              
   · that it's flexible - providing for improvements and changes in                                                             
     methods and requirements to reflect changes in technology,                                                                 
     vessel volumes, tank car trade, expertise, and other                                                                       
Number 858                                                                                                                      
MR. ROGERS  said that  one group  dealt with  the response  planning                                                            
standard,  another with  contingency planning,  one with  prevention                                                            
and one with the Alaska Railroad.                                                                                               
The response  planning standard in  the report calls for  vessels to                                                            
have boom  three times their  length and the  ability to deploy  it.                                                            
Cleanup  in the shortest  time possible  means there  needs to  be a                                                            
skimmer appropriate  to the  type of oil in  the area or able  to be                                                            
deployed to that area within 24 hours.                                                                                          
There  are several  different options  available  under contingency                                                             
planning.   The  market approach,  that  Mr. Dietrick  referred  to,                                                            
attempts  to address  the different  needs of  different  industrial                                                            
groups.    Everyone  has  to  file  and  show  proof   of  financial                                                            
responsibility.    Every vessel  needs  to  say whom  the  qualified                                                            
individual is  that can make decisions that bind the  company.  Each                                                            
vessel  will need  a response  action  plan  detailing notification                                                             
procedures  if there is a  problem, have a  contract with a  primary                                                            
response  action  contractor,   and  a contract   with  an  incident                                                            
management  team, and comply with  federal and international  rules.                                                            
In lieu of these contracts,  vessel owners can show they can respond                                                            
themselves  with   equivalent  resources  or  some  combination   of                                                            
contracts and equivalent resources.                                                                                             
"In addition,  to  accommodate the  different fleets,  there is  the                                                            
option for  fleet plans where a group  of vessels can band  together                                                            
to meet the  requirements and the  development of generic  c-plans -                                                            
basically a plan  that is ready to be activated on  the signature of                                                            
a vessel  owner."  This  was designed for  spot charter, Mr.  Rogers                                                            
said, in case  someone comes in to pick up a load  and will be there                                                            
in five  days and doesn't  have time  to write a  plan.  The  vessel                                                            
agents  will  develop  generic  plans  that  will  be  ready  to  be                                                            
activated in advance.                                                                                                           
MR.  ROGERS  said that  prevention  is  much  more of  a  challenge.                                                            
Due to federal  and international preemption, there  is not much the                                                            
State of  Alaska can do.   The prevention  measures that are  called                                                            
for in the report are voluntary,  but there is a good credit program                                                            
to give  credit  to those  vessels  that are  able to  come up  with                                                            
prevention measures.                                                                                                            
The  basic recommendation   for the  Alaska  Railroad  is that  they                                                            
undergo c-plan  review in the same fashion as other  facilities. The                                                            
Railroad has assured the  Task Force that they will be in a position                                                            
to respond within the time line that is laid out in the report.                                                                 
Number 1032                                                                                                                     
MR.  ROGERS   explained  the  Task   Force  went  through   all  the                                                            
recommendations  to figure out which ones needed legislation,  which                                                            
ones needed  regulatory change, and  which ones required  changes in                                                            
processes.  The legislation  is designed for three things primarily:                                                            
   · to activate the c-plan process;                                                                                            
   · to enable the adoption of the regulations as recommended by                                                                
     the Task Force; and                                                                                                        
   · to limit liability for certain participants in the process                                                                 
     (the folks  who are arranging  for a response and the  ones who                                                            
     are involved in the incident management teams).                                                                            
He summarized  that this  legislation uses  a market-based  approach                                                            
that  provides  opportunities  for  alternative  compliance  and  is                                                            
phased.  A  rough time-line might  be 12 months to adopt  the entire                                                            
regulatory  adoption process for legislation  that passes  this May.                                                            
That would  put regulations in effect  by June 2002.  Vessel  owners                                                            
would  then have  six months  to  prepare their  c-plans.   At  that                                                            
point, January  2003, they would have  to have the boom and  ability                                                            
to deploy it for  containment.  The cleanup equipment,  particularly                                                            
the  high-priced nonpersistent  fuel  skimmer  would have  to be  in                                                            
place would  happen by  the summer  of 2004.  He  said they  are not                                                            
asking  the nontank  vessels to move  faster than  the tank  vessels                                                            
Number 1185                                                                                                                     
MR. ROGERS gave a sectional analysis of the bill.                                                                               
   · Sections 1-3 amend AS 46.03.825, the section that limits the                                                               
     civil  liability  of  oil response  action  contractors.    The                                                            
     amendment  adds  statutory  references  to  the new  plans  for                                                            
     nontank vessels, and  basically provides the same limitation to                                                            
     the  response action  contractors  working  on nontank  vessels                                                            
     that the response  action contractors on tank vessels currently                                                            
   · Section 4 adds two kinds of services to the response action                                                                
     that  are  critical in  the  nontank  vessel arena  -  incident                                                            
     management  team and response  plan facilitator services.   The                                                            
     response  plan facilitator is the person who  puts together the                                                            
     generic  plan that  has  everything ready  to go  for a  vessel                                                            
     that's about  to enter Alaska.  The indication  was that no one                                                            
     would  be willing to  perform that function  if they might  get                                                            
     some of  the liability if there  actually were a spill.   SB 16                                                            
     extends  the same  immunity existing  today  to those  response                                                            
      plan facilitators and to those who manage the incident.                                                                   
   · Section 5 amends what the legislature passed last year on                                                                  
     proof  of financial  responsibility  for nontank  vessels.   It                                                            
     changes  the  wording  of the  applicability  section  from  "a                                                            
     person  may not  cause or  permit  the operation  of a  nontank                                                            
     vessel" without  the financial responsibility  to "a person may                                                            
     not operate  a nontank vessel."   This wording was recommended                                                             
     by  the  Task Force  so  that  it's exactly  the  same  wording                                                            
     applicable to tank  vessels.  People know what that means since                                                            
     it's been out there for a while.                                                                                           
   · Section 6 extends the existing innocent passage exemptions to                                                              
     the  requirement for nontank  vessel c-plans.   A vessel  is in                                                            
     innocent  passage if it's not  intending to call at  an Alaskan                                                            
     port-of-call,   and  is  transiting  state  waters   under  the                                                            
     Convention  on the Territorial  Sea and  Contiguous Zone.   MR.                                                            
     ROGERS said  that  the state is prevented from exercising state                                                            
     jurisdiction  over those vessels.  This section  makes it clear                                                            
     that the program only  extends to vessels that are entering the                                                            
     waters of the state generally within three miles.                                                                          
   · Section 7 adds the new provisions that require oil discharge                                                               
     prevention  and c-plans for nontank  vessels and railroad  cars                                                            
     that are transporting  oil.  This is the implementation of last                                                            
     year's legislation in AS 46.04.055(c).                                                                                     
        o (f) requires approved c-plans for nontank vessels six                                                                 
          months   after  the effective   date  of  the regulations                                                             
          adopted  by DEC.   Included in  those regulations  will be                                                            
          conditional  approval of the new c-plans.  In other words,                                                            
          if a  c-plan is filed on time, it is contingently approved                                                            
          by  DEC.  That way the department can  receive all of them                                                            
          at  once,  but will  be  able to  stagger  the review  and                                                            
          renewal  process.  He explained  that all vessels  come in                                                            
          the  first year,  but because  it's  a three-year  renewal                                                            
          cycle, they will be spaced out over that time.                                                                        
        o (g) sets forth the content requirement for the new                                                                    
          nontank  vessel  c-plans: vessel  specific information,  a                                                            
          response   plan,  and  a  prevention  plan  certification                                                             
          stating  that the nontank vessel for which c-plan approval                                                            
          is   made   complies  with   federal   and  international                                                             
          organization  requirements.  The response plan consists of                                                            
          initial  notification procedures in the event of a release                                                            
          or threatened  release, a certification that the applicant                                                            
          is  a  member of  or  has a  contract  with  an oil  spill                                                            
          organization  that is an oil spill primary response action                                                            
          contractor   with   a  response   plan  approved   by  the                                                            
          department  that meets response planning standards for the                                                            
          maximum   oil  capacity   of  the  vessel.    Finally,   a                                                            
          certification  requires that the applicant  has contracted                                                            
          with  a contractor  to  provide incident  management  team                                                            
          services  in the event of a release or threatened release.                                                            
        o (h) is the alternative section that says if you don't                                                                 
          want  to hire a contractor and show evidence  that you can                                                            
          do   it  yourself  or  you   have  equivalent   equipment,                                                            
          personnel,  and resources to meet the requirement, you can                                                            
          show this alternative compliance.                                                                                     
        o (i) applies the existing c-plan provisions of AS                                                                      
          46.04.030  to nontank vessels, to nontank  vessel c-plans,                                                            
          and  to a  person who applies  for and  holds an  approved                                                            
          nontank vessel c-plan.                                                                                                
        o (j)&(k) apply to railroad tank cars that transport oil                                                                
          and   require  c-plans  to  meet  the  response   planning                                                            
          standard  that  was adopted.   These  sections require  an                                                            
          approved  plan six months after the effective  date of the                                                            
          regulations  (January  2003). Section  (k) applies  the c-                                                            
          plan  provisions to railroad tank cars,  railroad tank car                                                            
          c-plans,  and a person applying for or holding an approved                                                            
          nontank railroad tank car contingency plan.                                                                           
        o (l) directs DEC to adopt the regulations to implement                                                                 
          this legislation.                                                                                                     
   · Section 8 creates a new section that authorizes DEC, in order                                                              
     to  assure   compliance  with  the  chapter  relating   to  oil                                                            
     pollution  control  to "at reasonable  times  in a safe  manner                                                            
     enter  and examine  nontank vessels,  trains, railroad  tracks,                                                            
     and associated facilities for verification purposes."                                                                      
   · Section 9 requires the lieutenant governor to certify or                                                                   
     revise the statutes regarding the effective dates of the                                                                   
     implementing regulations.                                                                                                  
   · Section 10 is the immediate effective date of the bill.                                                                    
Number 1579                                                                                                                     
CHAIRMAN TORGERSON asked  in (j) and (k) if it was his intent to put                                                            
these regulations  on railroad  cars that may  be on skids  that are                                                            
towed around.                                                                                                                   
MR. ROGERS  replied  that he understands  that the  bill applies  to                                                            
railroad  cars,  which would  not  be something  on  skids, but  the                                                            
Department of Law might have a different answer.                                                                                
CHAIRMAN  TORGERSON asked  why DEC  would want  to inspect  railroad                                                            
MR. ROGERS  answered that the railroad  explained to the  Task Force                                                            
that the dynamic  of what causes a  spill is the interaction  of the                                                            
cars,  the tracks,  and  the speed.   The  condition  of the  tracks                                                            
affects the  likelihood of  a derailment.   Mr. Rogers assumed  that                                                            
since  that is  part of the  vessel  in this case,  the legislation                                                             
includes the tracks as  part of that whole environment that leads to                                                            
a spill.                                                                                                                        
CHAIRMAN TORGERSON said  he just wondered about the expertise within                                                            
DEC to go and inspect railroad tracks.                                                                                          
Number 1672                                                                                                                     
SENATOR  ELTON applauded  Senator Pearce whose  efforts started  the                                                            
process  that  led to  this.   He  asked if  a  petroprocessor  from                                                            
Seattle who  transits False Pass to  access the Bering Sea  and then                                                            
leaves the Bering  Sea and goes directly back to Seattle  would fall                                                            
under the provisions of innocent passage.                                                                                       
MR. ROGERS replied  that he wasn't an expert on the  subject, but if                                                            
the vessel  is otherwise not going  to be entering state  waters, if                                                            
it's going  to be  at least three  miles off-shore,  except  for the                                                            
transit of  Unimak Pass,  that vessel would  be in innocent  passage                                                            
and  would not  be covered  by  this legislation.  However,  if  the                                                            
vessel  would call  at  Dutch Harbor  for any  purpose,  it then  is                                                            
subject to it, because it is entering state waters.                                                                             
SENATOR ELTON  asked if there was  any discussion by the  Task Force                                                            
on the  possible implications  this may have  for seafood ports.  Is                                                            
there any anticipation  that some  vessels, in order to not  have to                                                            
comply with  this, would  no longer be calling  at Alaska ports  for                                                            
provisions, fuel, and off-loading product.                                                                                      
MR. ROGERS  answered there was discussion  about vessels  responding                                                            
to this by staying further  off-shore than they had been which is in                                                            
itself a  prevention measure.   However, he  didn't think there  was                                                            
any testimony  or  discussion from  vessel owners  who thought  they                                                            
would change and not call  at Dutch Harbor that currently call there                                                            
now.  There  was some talk of vessels  that are currently  operating                                                            
within three miles,  in Norton Sound for instance,  that could avoid                                                            
the  cost of  compliance  in  that  sub region  by  staying  further                                                            
offshore.   They  can  save  costs and  the  state has  the  reduced                                                            
likelihood of an oil spill by their staying further offshore.                                                                   
Number 1793                                                                                                                     
SENATOR LINCOLN  asked if there was  public comment made  during the                                                            
MR.  ROGERS answered  that  there  was an  amazing  opportunity  for                                                            
public  dialogue  during   the  process.    They  insured  that  all                                                            
documents  went  on the  website within  72  hours of  the  meeting.                                                            
Transcripts  took  a  little  longer,  but  they were  also  on  the                                                            
SENATOR LINCOLN  asked if the recommendations of the  public members                                                            
were  incorporated  into  the  overall  plan.    She  asked  him  to                                                            
highlight some of the major ones that were left out.                                                                            
MR. ROGERS  replied that  as a facilitator,  he tries to "move  away                                                            
from who  owns what idea."   He couldn't tell  her who came  up with                                                            
most of the recommendations.                                                                                                    
SENATOR LINCOLN asked him how compliance will work.                                                                             
MR. ROGERS  replied that they didn't  get into the mechanics  within                                                            
the department,  but the Division  of Spill Prevention and  Response                                                            
was part  of the process  and compliance  clearly falls within  that                                                            
group's requirements.                                                                                                           
SENATOR PEARCE  noted that although  there were no members  from the                                                            
Coast Guard in  the audience, they had been with the  Task Force all                                                            
through the process and had been very helpful.                                                                                  
MR.  BRECK TOSTEVIN,  Department  of Law,  announced  that he  would                                                            
answer questions and elaborated  that the last legislature enacted a                                                            
definition  of "railroad  tank  car" in  AS 46.04.900(28)  as  being                                                            
"rolling stock used to  transport oil in bulk as cargo by rail,"  so                                                            
there is the concept  that the tank car has to be  on rail.  He also                                                            
explained that  "innocent passage"  is an international law  concept                                                            
which allows  a foreign vessel to  travel through another  country's                                                            
waters as long  as the vessel is transiting  through.  It  can stop,                                                            
but  it has  to  be expeditious  in  moving  through  the  country's                                                            
waters.   It can't engage  in activities such  as fishing and  can't                                                            
call on ports.   SB 273 extended the international  innocent passage                                                            
concept to all  vessels, both U.S. and foreign, that  aren't fishing                                                            
or transferring fuel, etc.                                                                                                      
SENATOR ELTON asked if  innocent passage covers a vessel that leaves                                                            
the Port of  Seattle, transits through  the Aleutians to  the Bering                                                            
Sea to catch and process  fish and then returns to the same port, or                                                            
whether  innocent passage  only cover  vessels that  are going  from                                                            
port A to port B.                                                                                                               
MR. TOSTEVIN  answered  that you  can't call  on a  port in  Alaska.                                                            
Leaving  a port  outside Alaska  and  transiting  through waters  in                                                            
Alaska  to get  to a  port  outside Alaska  is  considered  innocent                                                            
passage.  A vessel can't anchor or call on a port.                                                                              
CHAIRMAN TORGERSON asked if the Coast Guard would enforce this.                                                                 
MR. TOSTEVIN  answered his understanding  is that DEC and  the Coast                                                            
Guard  have  a memorandum  of  understanding  in  which  they  share                                                            
information and cooperate with each other.                                                                                      
MR. JERRY RUSHER,  Wasilla resident, said he was concerned  with the                                                            
180-day time frame for applications on page 15.                                                                                 
CHAIRMAN TORGERSON  explained that this section meant  the law would                                                            
go into effect 180 days after the adoption of the regulations.                                                                  
MR. RUSHER said he was interested in the time frame out to 2003.                                                                
CHAIRMAN  TORGERSON  explained  Mr. Rogers'  testimony  on the  time                                                            
MR. JOSEPH LEBEAU, Alaska  Center for the Environment (ACE), thanked                                                            
all the members  of the industrial  community who attended  the Task                                                            
Force meetings.                                                                                                                 
TAPE 01-01, SIDE B                                                                                                            
MR. LEBEAU  commented that a 15 percent  response-planning  standard                                                            
is not enough.                                                                                                                  
MS. PHYLLIS JOHNSON,  Alaska Railroad Corporation  (ARRC), supported                                                            
SB 16.  She thought  there were several items in the  bill that have                                                            
the potential  for conflict in the  federal/state relationship.  She                                                            
said ARRC  is okay  with the timeline,  but "the  feds are a  little                                                            
touchy about  jurisdictional  disputes."  A  couple of federal  laws                                                            
require  common  carriers  to  accept  a  cargo  that  is  exempted.                                                            
Another  place for  potential  conflict is  the right  to enter  and                                                            
examine the railroad  properties - track and other  facilities.  The                                                            
Federal  Railroad Administration,  which is  charged with trying  to                                                            
ensure  the safety  in  rail  operations,  has a  lot  of rules  and                                                            
regulations  about when  you can walk  on a  railroad track  without                                                            
certain  kinds  of  protection.    She  thought  language,  such  as                                                            
"consistent   with  FRA   safety  standards"   could  be  added   in                                                            
Number 2216                                                                                                                     
SENATOR  PEARCE asked  if jet A  is a hazardous  material under  the                                                            
Hazardous Materials Transportation Act (HMTA).                                                                                  
MS. JOHNSON  responded  that petroleum  and petroleum  products  are                                                            
hazardous  materials within  the definition  in the  HMTA.  Not  all                                                            
products are included under other acts.                                                                                         
SENATOR  PEARCE  asked  how  the state  was  able  to  regulate  the                                                            
Transalaska Pipeline System (TAPS) under our spill laws.                                                                        
MS. JOHNSON said she would look into getting the answer for her.                                                                
SENATOR PEARCE said she  didn't see how this is different from TAPS.                                                            
Number 2150                                                                                                                     
MR.  PAUL FUHS,  technical  advisor  to  the  Task Force  on  marine                                                            
issues,  clarified that  to get  the cost  savings,  the Task  Force                                                            
relied a  lot on affidavits.   People swear  that they have  a spill                                                            
response contractor  and there are pretty severe criminal  penalties                                                            
for falsifying an affidavit.   A company would also lose it's c-plan                                                            
until the problem was fixed.                                                                                                    
He  noted that  military  vessels  are not  included  in this  bill,                                                            
unless  they are  involved  in commerce.   Alaska's  marine  highway                                                            
system is covered  by it, but the  Coast Guard and military  vessels                                                            
are not.                                                                                                                        
MR. FUHS  also noted that  there is a letter  of intent that  covers                                                            
implementation details that might not be covered in regulation.                                                                 
SENATOR ELTON  asked if there was  anything in the legislation  that                                                            
contravenes any information in the packet.                                                                                      
MR. FUHS replied  that the legislation  was considered by  the group                                                            
and was recommended as part of the packet.                                                                                      
CHAIRMAN TORGERSON  said they would  hold the bill until  the fiscal                                                            
note came in and adjourned the meeting at 4:38 p.m.                                                                             

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