Legislature(2001 - 2002)

02/28/2001 01:35 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 28, 2001                                                                                          
                          1:35 PM                                                                                               
                                                                                                                                
TAPE HFC 01 - 34, Side A                                                                                                        
TAPE HFC 01 - 34, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:35 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Carol  Carroll,  Director,  Division   of  Support  Services,                                                                   
Department  of Natural  Resources and  Military and  Veterans                                                                   
Affairs;  Pat, Staff,  Senator Drue  Pearce; Larry  Dietrick,                                                                   
Director,   Division  of  Spill   Prevention  and   Response,                                                                   
Department   of  Environmental   Conservation;   Paul   Fuhs,                                                                   
Technical Support Contractor on  Marine Issues, Task Force on                                                                   
Motorized Oil Transportation;                                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Brian  Rogers,  Facilitator,  Task  Force  on  Motorized  Oil                                                                   
Transportation, Fairbanks; Breck Tostovin, Anchorage;                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 72     An  Act relating to  an assistant adjutant  general                                                                   
          for national missile defense in the Department of                                                                     
          Military and Veterans' Affairs.                                                                                       
                                                                                                                                
          HB 72 was REPORTED out of Committee with a "do                                                                        
          pass" recommendation and with a fiscal impact note                                                                    
          by the Military and Veterans Affairs.                                                                                 
                                                                                                                                
CS SB 16(RLS)                                                                                                                   
          An  Act  regarding  oil  discharge  prevention  and                                                                   
          cleanup  involving self-propelled  nontank  vessels                                                                   
          exceeding   400   gross  registered   tonnage   and                                                                   
          railroad  tank  cars  and  related  facilities  and                                                                   
          operations    and    requiring   preparation    and                                                                   
          implementation  of oil discharge  contingency plans                                                                   
          for those  nontank vessels and railroad  tank cars;                                                                   
          amending the  definition of 'response  action' that                                                                   
          relates to  releases or threatened releases  of oil                                                                   
          and thereby amending  the duties and liabilities of                                                                   
          response     action    contractors;     authorizing                                                                   
          compliance  verification  for nontank  vessels  and                                                                   
          for trains  and related facilities  and operations;                                                                   
          and providing for an effective date.                                                                                  
                                                                                                                                
          CSSB  16 (RLS) was REPORTED  out of  Committee with                                                                   
          "no recommendation"  and two fiscal impact  note by                                                                   
          the   Department  of   Environmental   Conservation                                                                   
          (published   note  #2)   and   the  Department   of                                                                   
          Transportation  and  Public  Facilities  (published                                                                   
          note #1).                                                                                                             
HOUSE BILL NO. 72                                                                                                             
                                                                                                                                
     An Act relating to an assistant adjutant general for                                                                       
     national missile defense in the Department of Military                                                                     
     and Veterans' Affairs.                                                                                                     
                                                                                                                                
CAROL  CARROLL,  DIRECTOR,  DIVISION   OF  SUPPORT  SERVICES,                                                                   
DEPARTMENT  OF NATURAL  RESOURCES AND  MILITARY AND  VETERANS                                                                   
AFFAIRS  explained that  the bill would  create an  Assistant                                                                   
Adjutant General  for National Missile Defense.  The position                                                                   
would be authorized  for the duration of the  development and                                                                   
deployment  of the  missile defense  system  in Alaska.  Only                                                                   
the  legislature has  the authority  to  create positions  of                                                                   
Assistant  Adjutant  General.  Currently, the  department  is                                                                   
authorized  an  Assistant  Adjutant   General  for  the  Army                                                                   
National  Guard and  an Assistant  Adjutant  General for  the                                                                   
Air National  Guard. The position  would be federally  funded                                                                   
and  would   be  in   effect  during   the  development   and                                                                   
deployment  of the missile  system in  Alaska. The  Assistant                                                                   
Adjutant  General for  National  Missile Defense  would be  a                                                                   
member of  the Alaska National  Guard and the  site commander                                                                   
for  the  development  of  missile  defense  in  Alaska.  She                                                                   
stressed  the importance  of  filling  the position  with  an                                                                   
Alaskan and member  of the Alaska National Guard  in order to                                                                   
promote Alaska jobs and training.                                                                                               
                                                                                                                                
In response  to a question  by Vice-Chair Bunde,  Ms. Carroll                                                                   
clarified  that  the  position  has  not  been  created.  The                                                                   
legislation would  require that the  position be a  member of                                                                   
the National Guard.                                                                                                             
                                                                                                                                
Vice-Chair  Bunde   asked  how  the  position   would  affect                                                                   
training.   Ms. Carroll replied  that an Alaskan  perspective                                                                   
would increase  the likelihood  that Alaskans would  be hired                                                                   
and  that training  needed  to deploy  the  system in  Alaska                                                                   
would occur.                                                                                                                    
                                                                                                                                
Representative Foster inquired  what a chain of command would                                                                   
look like.   Ms. Carroll  replied that  they would  report to                                                                   
the Adjutant  Commander.  They  would work with  the National                                                                   
Missile  Defense Joint  Program  Office, which  would be  the                                                                   
site Activation Command in Alaska.                                                                                              
                                                                                                                                
Representative Harris  asked if the Governor  had submitted a                                                                   
name for  the position.  Ms.  Carroll could not  confirm that                                                                   
any name had been  indicated.  To her knowledge,  no name had                                                                   
been submitted.                                                                                                                 
                                                                                                                                
Representative Hudson MOVED to  report HB 72 out of Committee                                                                   
with the accompanying fiscal note.                                                                                              
                                                                                                                                
Vice-Chair Bunde  OBJECTED for comment.  He  pointed out that                                                                   
the legislation  would increase  the budget by  $200 thousand                                                                   
dollars per year.                                                                                                               
                                                                                                                                
There being NO  FURTHER OBJECTION, HB 72 was  reported out of                                                                   
Committee.                                                                                                                      
                                                                                                                                
HB  72  was  REPORTED  out of  Committee  with  a  "do  pass"                                                                   
recommendation and with a fiscal  impact note by the Military                                                                   
and Veterans Affairs.                                                                                                           
CS FOR SENATE BILL NO. 16(RLS)                                                                                                
                                                                                                                                
     An Act  regarding oil  discharge prevention  and cleanup                                                                   
     involving self-propelled  nontank vessels  exceeding 400                                                                   
     gross  registered  tonnage and  railroad  tank cars  and                                                                   
     related   facilities   and  operations   and   requiring                                                                   
     preparation   and   implementation  of   oil   discharge                                                                   
     contingency   plans  for   those  nontank  vessels   and                                                                   
     railroad   tank  cars;   amending   the  definition   of                                                                   
     'response   action'   that   relates  to   releases   or                                                                   
     threatened  releases  of oil  and thereby  amending  the                                                                   
     duties and  liabilities of response  action contractors;                                                                   
     authorizing compliance verification  for nontank vessels                                                                   
     and for  trains and  related facilities and  operations;                                                                   
     and providing for an effective date.                                                                                       
                                                                                                                                
LARRY DIETRICK,  DIRECTOR, DIVISION  OF SPILL PREVENTION  AND                                                                   
RESPONSE, DEPARTMENT OF ENVIRONMENTAL  CONSERVATION testified                                                                   
in  support of  the legislation.  He observed  that the  Task                                                                   
Force  included a  23-member  cross-section  of the  maritime                                                                   
industry, the  Alaska Railroad and other  interested parties.                                                                   
The goal of the legislation is  to protect Alaska's renewable                                                                   
resources  and keep  Alaska's  waters the  cleanest and  most                                                                   
pristine  in the world  by including  large sea-going  marine                                                                   
nontank vessels  and the Alaska  Railroad in Alaska's  safety                                                                   
net  for oil  spill prevention  and response.  Alaska is  the                                                                   
only west coast  state that does not include  nontank vessels                                                                   
                                                            st                                                                  
in the  oil spill  safety net.  In May of  last year  the 21                                                                    
Legislature  debated and  passed Senate  Bill 273 and  Senate                                                                   
Concurrent Resolution  1, which  commissioned the  Task Force                                                                   
on Motorized Oil  Transport to work out details  to implement                                                                   
oil  spill   contingency  plans  and  achieve   the  response                                                                   
planning standard  in a way that was acceptable  to those who                                                                   
would  be affected.  The Task  Force has  completed the  work                                                                   
directed by the Legislature and  achieved unanimous consensus                                                                   
on legislation.  The consensus  legislation  is SB 16,  which                                                                   
was  developed by  the Task  Force  and is  predicated on  no                                                                   
further amendments by the members.                                                                                              
                                                                                                                                
Mr.  Dietrick  observed  that although  the  requirement  for                                                                   
financial responsibility  was made  effective last  year, the                                                                   
requirement to  have an oil  spill contingency plan  and meet                                                                   
the  response   planning  standard  was  not.   Instead,  the                                                                   
Legislature through  SB 273 and Senate  Concurrent Resolution                                                                   
1 commissioned the  Task Force to determine  how to implement                                                                   
the  response planning  standards  and provide  opportunities                                                                   
for streamlined oil spill contingency  plans. Those standards                                                                   
were set by the Legislature in  SB 273 as the containment and                                                                   
control  of 15%  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  environment. Nontank  vessels were                                                                   
defined as  self-propelled vessels  over 400 gross  tons, not                                                                   
including tank vessels, oil barges or public vessels.                                                                           
                                                                                                                                
Mr.  Dietrick  noted  that  Senate  Concurrent  Resolution  1                                                                   
specified that  there would be  23 members on the  Task Force                                                                   
on  Motorized   Oil  Transport.  This  served   to  ensure  a                                                                   
diversity of  viewpoints and  adequate representation  of all                                                                   
groups to be regulated. The members  included representatives                                                                   
from the  U. S.   Coast Guard, the  DEC, the Railroad,  spill                                                                   
response cooperatives,  the shipping  industry, spot  charter                                                                   
groups,  the   fishing  industry,   the  Regional   Citizens'                                                                   
Advisory  Councils, and  representatives from  the crude  oil                                                                   
industry and  the refined oil distributors  and transporters.                                                                   
Many more  persons, who  were not appointed  representatives,                                                                   
attended  the  work  group sessions  and  formal  task  force                                                                   
meetings.                                                                                                                       
                                                                                                                              
Mr. Dietrick  noted that  the Task  Force held eleven  formal                                                                   
meetings  over  a  five-month  period in  which  the  members                                                                   
worked  through legal  and  technical issues  on  prevention,                                                                   
contingency  plans, and  response  planning standards.  Three                                                                   
workgroups  were   created  to  address  specific   areas  of                                                                   
concern.                                                                                                                        
                                                                                                                                
Mr.  Dietrick  discussed  the  recommendations  of  the  Task                                                                   
Force. He maintained  that the recommendations  are practical                                                                   
and  meet the  requirements  the Legislature  established  in                                                                   
last years'  bill. They include implementation  measures that                                                                   
use  a market-based  economy  approach  to keep  costs  down.                                                                   
The recommendations are based  on Alaska's existing oil spill                                                                   
response infrastructure  and provide maximum  flexibility for                                                                   
meeting the  requirements.   The work of  the Task  Force has                                                                   
already    fostered   private    sector   initiatives    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                                                                   
that covers all of Alaska is being created.                                                                                     
                                                                                                                                
The members  of the  Task Force  were extremely attentive  to                                                                   
the  proceedings  and  assimilated  a  tremendous  amount  of                                                                   
information  during their  tenure.   All  meetings were  well                                                                   
attended and  the level of  dialogue was frank,  constructive                                                                   
and productive.  After careful and thorough  consideration of                                                                   
all ideas and  requests brought before them,  they achieved a                                                                   
unanimous consensus to support 31 recommendations.                                                                              
                                                                                                                                
Mr. Dietrick observed  that the Task Force  also exhaustively                                                                   
reviewed the  legal issues  and meticulously identified  what                                                                   
elements should  be contained  in regulation and  what should                                                                   
be contained in statute.                                                                                                        
                                                                                                                                
Mr.  Dietrick  maintained  that the  legislation  provides  a                                                                   
foundation  for   enhanced  spill  prevention   and  response                                                                   
preparedness  thereby  ensuring   that  state  resources  and                                                                   
economy are adequately protected for future generations.                                                                        
                                                                                                                                
BRIAN  ROGERS,  FACILITATOR,  TASK  FORCE  ON  MOTORIZED  OIL                                                                   
TRANSPORTATION,  FAIRBANKS testified  via teleconference.  He                                                                   
explained the  work of  the task force  was how to  implement                                                                   
the legislation.  Most of the  changes are not  statutory but                                                                   
pertain to the  regulatory process. The  legislation contains                                                                   
the minimum changes necessary to:                                                                                               
                                                                                                                                
     Activate the contingency planning process, establishing                                                                    
     a streamlined procedure for nontank vessels;                                                                               
                                                                                                                                
     Limit liability for response action contractors,                                                                           
     including those providing incident management team                                                                         
     services and response planning facilitator services;                                                                       
                                                                                                                                
     Enable the Department to adopt regulations consistent                                                                      
     with the Task Force report.                                                                                                
                                                                                                                                
Mr.  Rogers  reiterated  that the  recommendations  follow  a                                                                   
market-based  approach  giving affected  vessels  alternative                                                                   
means for  compliance and allows  a phased implementation  to                                                                   
spread the  cost on the regulated  industry.  The  Task Force                                                                   
recommended  a letter of  Intent, which  has been adopted  as                                                                   
section 1 of the  bill.  He reiterated that the  goals of the                                                                   
Task  Force  were  met,  which   were  that  the  process  be                                                                   
realistic, effective, economically feasible and flexible.                                                                       
                                                                                                                                
Mr. Rogers  reviewed the  provisions of the  recommendations.                                                                   
The  response   finding  standards  calls  for   control  and                                                                   
containment  within 24  hours. Vessels  can demonstrate  this                                                                   
ability  through  sufficient  boons  to go  three  times  the                                                                   
lengths of the  vessel and the means for deployment.  To meet                                                                   
the  clean  up  standard,  vessels   should  have  a  skimmer                                                                   
appropriate for the type of oil  in the operations or be able                                                                   
to  be mobilized  to the  area  of the  operations within  24                                                                   
hours.   The   recommendations   provided   for   alternative                                                                   
calculations on  the size of the response  planning standards                                                                   
for vessels that  are carrying less than a full  load of oil.                                                                   
Contingency  planning  is a  streamline  process that  begins                                                                   
with the  information required  for financial  responsibility                                                                   
and a qualified individual able  to make decisions in a spill                                                                   
event. A response action plan  would be required, which would                                                                   
include  initial  notification  procedures, contract  with  a                                                                   
primary  response action  contractor  and a  contract with  a                                                                   
incident management team or the  equivalent resources brought                                                                   
by the  vessel or  a combination  of contract and  resources.                                                                   
The  legislation allows  the development  of  fleet plans  or                                                                   
generic  plans that  could be  set  up for  the spot  charter                                                                   
industry. The Department of Environmental  Conservation would                                                                   
review   timeframes    and   conduct   drills    and   vessel                                                                   
verifications.                                                                                                                  
                                                                                                                                
Mr. Rogers discussed  prevention measures. He  noted that all                                                                   
prevention measures  are voluntary.  The Task Force  endorsed                                                                   
the  risk analysis  process being  undertaken  by the  Alaska                                                                   
Railroad.  The  Alaska  Railroad   Corporation's  contingency                                                                   
planning  would  go  through the  same  guidelines  as  other                                                                   
regulated facilities.                                                                                                           
                                                                                                                                
Mr. Roger reviewed  the legislation by section.  Section 1 is                                                                   
the intent  section. Sections 2  - 4 limit civil  liabilities                                                                   
of  action   response  contractors.  Section  5   amends  the                                                                   
definitions   of   "response   action"   to   include   civil                                                                   
liabilities for  management team  services and response  plan                                                                   
facilitator   services.   Section   6  amends   last   year's                                                                   
legislation on proof of financial  responsibility to make the                                                                   
language identical  for tank vessels.  Section 7  extends the                                                                   
inner  passage  exemptions.  Section 8  adds  new  provisions                                                                   
requiring  sea   plans  and  authorizes  the   Department  of                                                                   
Environmental    Conservation     to    adopt    implementing                                                                   
regulations. Section 9 gives the  Department of Environmental                                                                   
Conservation  verification  authority.  Section  10  requires                                                                   
that the  lieutenant governor  to certify  to the revisor  of                                                                   
statutes the effective date of the regulations.                                                                                 
                                                                                                                                
Representative  Hudson  noted  that since  the  Exxon  Valdez                                                                   
spill the legislature  has taken an in-depth look  at the oil                                                                   
spill laws.   He maintained that the legislation  is the best                                                                   
piece  of   abbreviated  legislation   and  regulations   yet                                                                   
accomplished  and  should  give Alaska  protection  from  the                                                                   
nonpaying as well as the paying vessels.                                                                                        
                                                                                                                                
Representative Hudson  noted that gross registered  ton would                                                                   
be determined by the US Coast Guard under 33 C.F.R.                                                                             
                                                                                                                                
Mr. Dietrick  agreed and  noted that  the definition  was put                                                                   
into effect  in last  year's bill.  The term  was defined  in                                                                   
regulation.  There is a  specific reference  to the  US Coast                                                                   
Guard's  regulation 33  C.F.R.  13830. Representative  Hudson                                                                   
reiterated   that  it   is  the   regulatory  gross   tonnage                                                                   
definition.                                                                                                                     
                                                                                                                                
Representative Harris  asked if there were  enough responders                                                                   
within the  state to handle  the requirements.   Mr. Dietrick                                                                   
explained  that   five  spill  cooperatives   have  developed                                                                   
throughout the  state. Cooperatives  account for 80%  or more                                                                   
of the response  capability in the state. The  state needs to                                                                   
build  from  that  capability.  There is  no  requirement  to                                                                   
belong to a cooperative, but the  intent is to strengthen the                                                                   
cooperatives to receive a stronger response.                                                                                    
                                                                                                                                
Representative  Harris asked  for clarification  of the  fund                                                                   
source 1052 designation. Mr. Dietrick  noted that funds would                                                                   
come from  the Prevention  Account in  the Oil and  Hazardous                                                                   
Substance Release Prevention Response Fund.                                                                                     
                                                                                                                                
Co-Chair  Mulder   asked  what  would  constitute   "innocent                                                                   
passage".                                                                                                                       
                                                                                                                                
BRECK   TOSTOVIN,    DEPARTMENT   OF   LAW    testified   via                                                                   
teleconference.  He  stated  that "innocent  passage"  is  an                                                                   
international  law concept, which  allows vessels  of foreign                                                                   
nations   to   travel   through   territorial   waters.   The                                                                   
legislation would  extend that concept to flagged  vessels of                                                                   
the United  States. It  would allow for  a vessel  to transit                                                                   
through  our waters, but  they could  not call  at a  port or                                                                   
engage in fishing.                                                                                                              
                                                                                                                                
Co-Chair Williams  inquired how much  time would be  given to                                                                   
spot charters to review documents.  Mr. Dietrick replied that                                                                   
under  a generic  or  fleet  plan  spot charters  could  give                                                                   
notice in as few as 5 days.                                                                                                     
                                                                                                                                
Co-Chair  Williams asked  about  the comparison  of the  fees                                                                   
with  other stats.  Mr. Dietrick  replied that  all the  West                                                                   
coast states  currently have  similar legislation.  The state                                                                   
of Washington's model was used  for the contingency model. He                                                                   
pointed out  that Alaska could  not use the model  completely                                                                   
due to  the length of coastline  within the state.  Alaska is                                                                   
using a  regional approach based  on the state  of Washington                                                                   
model.                                                                                                                          
                                                                                                                                
Co-Chair Williams  commented that  Puget Sound and  SE Alaska                                                                   
cannot be  compared. There are  many more ships and  ports in                                                                   
Puget Sound.                                                                                                                    
                                                                                                                                
PAUL  FUHS, TECHNICAL  SUPPORT CONTRACTOR  ON MARINE  ISSUES,                                                                   
TASK   FORCE  ON   MOTORIZED   OIL  TRANSPORTATION   provided                                                                   
information  on  the  legislation.  He noted  that  a  dollar                                                                   
figure could not be assessed because  the cooperatives do not                                                                   
know how  many people would  join. The Task Force  determined                                                                   
the equipment  schedule for the  tank vessels with  a minimum                                                                   
of  new  equipment purchases.  He  stressed  that  additional                                                                   
vessels   would   substantially   bring   the   costs   down.                                                                   
Limitations on liability were  included for vessel agents and                                                                   
spot charters  because it  would not be  known until  10 days                                                                   
before which  vessel would come.  This allows a  generic plan                                                                   
with   the    Department   of   Environmental    Conservation                                                                   
demonstrating financial responsibility  and a contract with a                                                                   
spill  response  contractor  and  incident  management  team.                                                                   
Vessels  can have  a certificate  to come into  the state  of                                                                   
Alaska  within  five days.  He  emphasized  that this  is  an                                                                   
efficient system.                                                                                                               
                                                                                                                                
Co-Chair  Mulder asked  for  more information  regarding  the                                                                   
current  structure of  the  Alaska Railroad's  response.  Mr.                                                                   
Dietrick  replied that  currently the  Railroad is not  under                                                                   
any state requirements for a contingency  plan or required to                                                                   
meet  a   response  plan  standard.     He  added   that  the                                                                   
implementation  for  the railroad  would  be  a more  complex                                                                   
planning effort  under the legislation.  The plan  would have                                                                   
to cover from Seward to Anchorage  and Fairbanks. He provided                                                                   
more  information on  how  spills by  the  railroad could  be                                                                   
contained.                                                                                                                      
                                                                                                                                
Co-Chair  Mulder  noted  that   the  railroad  would  have  a                                                                   
response-planning standard of  15 percent of the maximum fuel                                                                   
carried  and asked  if any  railroads  in the  lower 48  have                                                                   
similar requirements.  Mr. Dietrick did not believe so.                                                                         
                                                                                                                                
Co-Chair Mulder asked how much  it would cost the railroad to                                                                   
meet  the  standard.   Mr.  Dietrick  could not  answer,  but                                                                   
thought that the railroad had made an estimation.                                                                               
                                                                                                                                
Mr. Fuhs  noted that  the railroad had  already moved  in the                                                                   
direction  adopted by  the Task  Force.  The Alaska  Railroad                                                                   
Corporation is supportive of the requirements.                                                                                  
                                                                                                                                
TAPE HFC 01 - 34, Side B                                                                                                      
                                                                                                                                
Co-Chair  Mulder thought  that there would  be a  significant                                                                   
cost to  the railroad.  Mr. Fuhs noted  that the  railroad is                                                                   
counting on the road system or  aircraft as the primary means                                                                   
of delivery. Equipment would not  be on site. The requirement                                                                   
for delivery is 24 hours.                                                                                                       
                                                                                                                                
Mr.  Dietrick  noted  that  the  railroad  had  committed  to                                                                   
upgrading their  ability to respond  and that fair  amount of                                                                   
pre-stage gear  already exists. The  railroad has done  a lot                                                                   
of work  with the truckers.  They have been cooperative  with                                                                   
the department.                                                                                                                 
                                                                                                                                
Representative  Davies  asked  if  there would  be  any  cost                                                                   
recovery for the  plans. Mr. Dietrick stated  that the fiscal                                                                   
note is  based on  using funds  from the Prevention  Account.                                                                   
They would be applied if there  were a spill. There would not                                                                   
be any cost recovery in terms of contingency plan review.                                                                       
                                                                                                                                
Representative Davies asked if  a 50/50 model was considered.                                                                   
Mr. Dietrick  stated that  discussion has occurred  regarding                                                                   
fee structures, but that the Task  Force did not focus on fee                                                                   
structures.  The Task  Force deliberations  were centered  on                                                                   
finding  an affordable  system. The Task  Force assumed  that                                                                   
the Prevention Account would be  the appropriate direction to                                                                   
go to for  the funding. Representative Davies  voiced concern                                                                   
that other activities would be  displaced by the use of those                                                                   
funds.   Mr.  Dietrick   noted   that   projections  by   the                                                                   
Legislative  Finance  Division,  used  in  other  Committees,                                                                   
indicated that the Prevention  Account would not be adversely                                                                   
affected.                                                                                                                       
                                                                                                                                
Vice-Chair Bunde  expressed concern that contributors  to the                                                                   
470  Fund were  not considered.  Mr. Fuhs  stated that  there                                                                   
were concerns  regarding the cost  of the legislation  to the                                                                   
industry. The industry  will bear the largest  portion of the                                                                   
responsibility.                                                                                                                 
                                                                                                                                
Representative  Croft asked  to see  the Legislative  Finance                                                                   
sheet regarding the distribution costs.                                                                                         
                                                                                                                                
Co-Chair Mulder asked the intention of section 9, page 6:                                                                       
                                                                                                                                
     Compliance  verification  for  nontank vessels  and  for                                                                   
     trains  and  related  facilities  and  operations.    In                                                                   
     addition  to  other  rights  of  access  or  examination                                                                   
     conferred  upon the department  by law or  otherwise, to                                                                   
     ensure compliance  with the  provisions of  this chapter                                                                   
     relating  to oil pollution  control, the department  may                                                                   
     at reasonable times and in a safe manner enter and                                                                         
     examine                                                                                                                    
          (1) nontank vessels; and                                                                                              
          (2)    trains,    railroad    tracks,    associated                                                                   
          facilities, and railroad operations.                                                                                  
                                                                                                                                
Mr.   Tostovin  explained   that  the   language  gives   the                                                                   
department  the  ability  to   access  facilities  to  assure                                                                   
compliance   to    oil   pollution   laws    and   C-planning                                                                   
requirements.  The  intention  was  not  to  create  a  track                                                                   
inspection  program. The  intent was  to give the  department                                                                   
access  to tracks  in  the  event of  an  incident  or in  an                                                                   
inspection for  the sea plan requirements. The  intention was                                                                   
to  give the  Department  the  ability  to track  the  C-plan                                                                   
requirement.                                                                                                                    
                                                                                                                                
Co-Chair Mulder  pointed out  that all associated  facilities                                                                   
would be  included. He  suggested that  the broadness  of the                                                                   
language  could result  in  the Department  of  Environmental                                                                   
Conservation  running the  railroad. Mr.  Fuhs disagreed.  He                                                                   
emphasized that the Department  of Environmental Conservation                                                                   
would not hire train track specialists.  The intent is to get                                                                   
access  to the  premise in  the event  of an  incident or  to                                                                   
check on certificates of financial responsibility.                                                                              
                                                                                                                                
Representative  Hudson   stressed  that  the   Department  of                                                                   
Environmental  Conservation would not  supplant the  US Coast                                                                   
Guard's marine safety specialist in hiring ship inspectors.                                                                     
                                                                                                                                
Mr.  Dietrick  stated  that there  is  a  detailed  operating                                                                   
agreement  for   nontank  vessels  and  tightly   coordinated                                                                   
procedures with  the Coast Guard  to prevent overlapping.  He                                                                   
stressed that there  is a good working relationship  with the                                                                   
US Coast Guard. The Department's  concern is that they do not                                                                   
have  legal access  to react  to a  spill. The  intent is  to                                                                   
travel the rail right-of-way to get to a site.                                                                                  
                                                                                                                                
Co-Chair Mulder  summarized that  the intent of  the language                                                                   
is to  gain legal access  in the event  of a spill.  He noted                                                                   
that  the  language  is  broadly  worded  and  asked  if  the                                                                   
Department  would  be willing  to  reword the  language.  Mr.                                                                   
Dietrick   commented  that  there   was  extensive   dialogue                                                                   
regarding that language.                                                                                                        
                                                                                                                                
Mr. Fuhs noted that the legislation states:                                                                                     
                                                                                                                                
     In  addition to other  rights of  access or  examination                                                                   
     conferred  upon the department  by law or  otherwise, to                                                                   
     ensure compliance  with the  provisions of  this chapter                                                                   
     relating  to oil  pollution control,  the department  at                                                                   
     reasonable  times  and  in   a  safe  manner  enter  and                                                                   
     examine...                                                                                                                 
                                                                                                                                
Co-Chair  Mulder  voiced concern  that  the  language is  too                                                                   
broad.  Mr.   Dietrick  stated   that  the  language   limits                                                                   
authority to the  provision of the chapter,  which deals with                                                                   
compliance of response planning standards.                                                                                      
                                                                                                                                
Representative   Davies  thought   that   the  language   was                                                                   
preventative and would guarantee that things were in place.                                                                     
                                                                                                                                
Mr.  Dietrick agreed.  Representative Davies  noted that  the                                                                   
legislation  provides   for  prevention  and   response.  Mr.                                                                   
Dietrick replied  that the language was  written specifically                                                                   
to prevention, but would also apply to spills.                                                                                  
                                                                                                                                
Representative Davies questioned  if the department currently                                                                   
has legal  access for  spills. Mr.  Dietrick stated  that the                                                                   
Department is  required to  get the legal  access if  it does                                                                   
not already exist.                                                                                                              
                                                                                                                                
Representative Davies pointed  out that the department is not                                                                   
being given authority to control operations.                                                                                    
                                                                                                                                
Co-Chair  Mulder   questioned  what   would  happen   if  the                                                                   
Department determined  that there  were not enough  "boom" on                                                                   
board.  He   maintained  that   the  legislation   gives  the                                                                   
statutory  authority  to  shut   down  an  operation  if  the                                                                   
required equipment  is not  present. Mr. Dietrick  emphasized                                                                   
that a shut down  would be an extreme action  that would only                                                                   
be  taken   with  the   commissioner's  authority   under  an                                                                   
emergency order. Co-Chair Mulder  stressed that government is                                                                   
not  always   reasonable  and  added  that   politics  affect                                                                   
governmental actions. He wanted additional assurances.                                                                          
                                                                                                                                
Mr.  Dietrick responded  that  the Department's  approach  to                                                                   
compliance in  the state is education,  technical assistance,                                                                   
and  voluntary compliance.  Enforcement action  would be  the                                                                   
last step. Compliance by consent is the primary focus.                                                                          
                                                                                                                                
Mr. Fuhs noted that the decision  was made by the Legislature                                                                   
last year  in SB 273.  Industry voiced  the same  concerns as                                                                   
Co-Chair Mulder.  The Task  Force was formed  as a  result of                                                                   
concerns by  industry. He noted  the letters of  support from                                                                   
industry. He maintained that the concerns have been met.                                                                        
                                                                                                                                
Representative Croft  acknowledged Co-Chair  Mulder's concern                                                                   
with section  6, "A  person may  not operate," but  concluded                                                                   
that the  authority was  needed to  ascertain compliance.  He                                                                   
voiced  confidence  that  the   department  would  work  into                                                                   
compliance.                                                                                                                     
                                                                                                                                
Representative  Davies  noted  that  the  department's  track                                                                   
record has been good.                                                                                                           
                                                                                                                                
Co-Chair Mulder  asked if there  were other entities  capable                                                                   
of doing the  reports. Mr. Dietrick responded  that the state                                                                   
has not been involved in this  arena to date.  There are none                                                                   
in the Coast  Guard area. He did  not know if there  were any                                                                   
exceptions.  Mr. Fuhs  asked if  the department's  regulatory                                                                   
activity would be  discretionary. He noted that if  it is not                                                                   
discretionary  the  department  could not  contract  out  for                                                                   
services. He pointed  out that if an entity  stated that they                                                                   
were not signing  with a cooperative and that  they had their                                                                   
own equipment the department would  want to ascertain if they                                                                   
have the  equipment and  if they  have the needed  personnel.                                                                   
The  oil  spill  response  organizations  have  already  been                                                                   
preauthorized and might be discretionary.                                                                                       
                                                                                                                                
Mr.  Tostovin  referred  to  opinions   regarding  delegating                                                                   
decision-making  functions.   The  opinions   concluded  that                                                                   
decision-making  functions   should  remain   in  government.                                                                   
Courts in other  states have upheld delegation  to private or                                                                   
other  governmental  entities  if there  is  very  structured                                                                   
oversight  and little  discretion or  decision-making by  the                                                                   
private  entity.   Clerical  and   objective  items   can  be                                                                   
delegated.  Decisions where  judgment is  involved cannot  be                                                                   
delegated. He  stressed that the oversight by  the department                                                                   
would require two  extra positions. If a private  entity were                                                                   
used  the   department  would   still  need  a   position  to                                                                   
supervise.  He  concluded  that   only  one  position  is  in                                                                   
question.                                                                                                                       
                                                                                                                                
Co-Chair Mulder  discussed the fiscal note. He  observed that                                                                   
there are two  permanent and two temporary employees  for two                                                                   
years  as  applications  are submitted.  He  noted  that  the                                                                   
question is what  is a reasonable workload for  the amount of                                                                   
work that needs to be done.                                                                                                     
                                                                                                                                
Mr. Dietrick explained that the  Task Force's intent would be                                                                   
to  approve plans  as  they are  submitted.  Review of  plans                                                                   
would be staggered  overtime on a three-year  cycle. Co-Chair                                                                   
Mulder commented that the initial  rush would be in the first                                                                   
year and  questioned why funding  was retained for  FY04. Mr.                                                                   
Dietrick responded  that the reviews  would span over  a two-                                                                   
year period. More than one year  would be needed to come to a                                                                   
steady  workload. The  department would  also be  responsible                                                                   
for  training,   electronic  posting   of  plans,   technical                                                                   
assistance, registering  primary response action  contractors                                                                   
and  launching  the  prevention  credit  program  during  the                                                                   
startup period. These  costs would be backed out  by FY05. He                                                                   
voiced concern with the aggressive review times.                                                                                
                                                                                                                                
Co-Chair  Mulder  cautioned  that  the  numbers  for  travel,                                                                   
contractual  and supplies  were  generous. He  noted that  he                                                                   
would  continue  to  keep  an  eye  out  on  the  recommended                                                                   
numbers.                                                                                                                        
                                                                                                                                
Vice-Chair  Bunde  noted  concern  with  public  policy  that                                                                   
requires some people  to pay for the regulation  while others                                                                   
do not.                                                                                                                         
                                                                                                                                
Representative Hudson  MOVED to adopt  CS SB 16 (RLS)  out of                                                                   
Committee  with individual  recommendations.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair  Mulder noted  that  he would  be  working with  the                                                                   
department to address his concerns.                                                                                             
                                                                                                                                
CSSB  16  (RLS)  was  REPORTED  out  of  Committee  with  "no                                                                   
recommendation" and two fiscal  impact note by the Department                                                                   
of Environmental  Conservation  (published note  #2) and  the                                                                   
Department   of   Transportation    and   Public   Facilities                                                                   
(published note #1).                                                                                                            
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 2:55 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

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