Legislature(2001 - 2002)

01/22/2001 03:45 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 3:45 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                                                             
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                                                            
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                                                            
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                                                            
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.                                                                                               

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