Legislature(2001 - 2002)
01/22/2001 03:45 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 3:45 p.m. and announced SB 16 to be up for consideration. He noted that two fiscal notes had arrived from the Marine Highway System and the Department of Environmental Conservation. MR. LARRY DIETRICK, Director, Division of Spill Prevention and Response, said the total number of plans was based on the number of financial responsibility applications the state had received since SB 273 went into affect last September and totals about 500 plans covering about 900 vessels. He assumed that the shore-based companies, the marine exchange, the spill co-ops, and the ships' agencies were being very optimistic that the streamlined plan would be the dominant one chosen by all these vessels. That is the desire of the Task Force. However, they kept the option open for a variety of other plans. Based on this, the Department estimated that it would take two people to sustain the program. They inserted a measurement point at the end of FY04, so they can make adjustments based on actual applications at that point in time. MR. DIETRICK explained that the fiscal note starts by funding one person for one year who would put the program together and develop regulations. That person would also flesh out the training and prevention credit programs. There will be registration of primary response action contractors, working with the coops, the marine exchange, and other entities that will come on line to provide the services called for by the bill. MR. DIETRICK explained that in FY03 the actual plans start "coming in the door" and the division would be reviewing all of the plans on a staggered basis. The report calls for them to stamp all the plans "approved" as they come in the door and to do the detailed reviews in a staggered fashion to even out the workload. In FY03 - 04 two temporary people will help do the reviews. He envisions an ample amount of technical assistance in helping vessel owners get their packages together. The end of FY04 is also the point in time when the equipment capitalization has to be completed and then the division would drop back down to two people for the long run. They would also take stock at the end of '04 to see if adjustments need to be made. Number 440 SENATOR TAYLOR asked about the funding source. MR. DIETRICK answered that the Task Force report recommends that there be no user fees charged for the group. The basic direction given was toward the response fund and has a three-cent surcharge. SENATOR TAYLOR asked what the cost was of operating the marine exchange. Number 547 MR. DIETRICK replied that the marine exchange evolved out of the Task Force work. It's a one-stop source for all vessels plying Alaska's waters. It's a source one can go to to get any service one might need from a propeller repair to meeting the response planning standards. It is planned to be a nonprofit corporation and a board of directors has already been selected as well as an executive director. It is scheduled to start April 1, 2001. SENATOR TAYLOR said he was concerned that everyone in the private sector who might possibly spill anything would have to get into this organization. SENATOR PEARCE noted that "there are a number of spill response entities. They don't have to go to the marine exchange." CHAIRMAN TORGERSON asked Mr. Dietrick if he had "looked at" the $3,500 annual membership fee. MR. DIETRICK said that he had and Mr. Fuhs would explain those costs further. Number 848 MR. GEORGE CAPACCI, General Manager, Alaska Marine Highway System, said SB 16 requires the DOTPF to have approved oil discharge c- plans for the system vessels in place. The primary cost to DOTPF will be the contracts with oil spill primary response action contractors. The Marine Highway has Coast Guard approved shipboard oil pollution and emergency plans(SOPEP) and an incident command system required by the International Safety Management Code. They will not have to contract for incident management team services because they could be done in-house. For the seven vessels in Southeast Alaska there is an annual membership fee of $4,000 based on the amount of fuel that is carried in their hulls. In Southwest Alaska there is a one-time initiation fee and a $16,000 fee based on the three ships that would be operating there. MR. CAPACCI noted that these figures were based on some quotes from oil spill response contractors using today's rates, which are expected to go down when more members join the cooperative. He has assumed the c-plans and contracts would not be required until FY03. CHAIRMAN TORGERSON asked if vessel owners pay their dues to the marine exchange. MR. CAPACCI answered that the fees are paid to the different contractors. MR. PAUL FUHS, consultant to the Task Force on Marine Issues, explained further that the Alaska Marine Highway has incident command and has access to the DEC's incident command. There are two sides to a cleanup - one is equipment and a spill response contract and the other is the incident command team. Someone has to be qualified to coordinate the effort and keep track of funds being spent. DEC has enough in house expertise to do that. The marine exchange was formed as a nonprofit corporation to make it cost effective for people who don't have expertise. A system needs to be in place so that when vessels come to Alaska, they can comply with the law and also keep costs down. Number 932 SENATOR LINCOLN asked why the fiscal note "assumed" the funding would come from the state's Oil Spill Response Fund. MR. DIETRICK answered that the Department made that assumption when they put the package together for SB 273. CHAIRMAN TORGERSON added that it fits the mandate for the Oil Spill Response Fund and the assumption is, therefore, correct. The total cost of the fully implemented bill is around $330,000 in FY03. SENATOR LINCOLN said she wanted some assurance regarding the Alaska Railroad's concern about the inspections being done by a qualified inspector. MR. DIETRICK answered that according to Phyllis Johnson, Alaska Railroad general counsel, the Railroad was a Task Force member and had participated all along the way. She worked with Breck Tostevin, Department of Law, to see if there was need for an amendment, but there wasn't. CHAIRMAN TORGERSON asked if he had received a letter stating that. MR. DIETRICK answered no he hadn't, but he would be glad to get one if the committee wanted it. Number 1148 SENATOR PEARCE moved to pass SB 16 from committee with the two fiscal notes with individual recommendations. There were no objections and it was so ordered.