Legislature(2001 - 2002)
01/23/2001 01:40 PM House TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
January 23, 2001
1:40 p.m.
MEMBERS PRESENT
Representative Vic Kohring, Chair
Representative Scott Ogan
Representative Peggy Wilson
Representative Mary Kapsner
Representative Albert Kookesh
MEMBERS ABSENT
Representative Beverly Masek, Vice Chair
Representative Drew Scalzi
COMMITTEE CALENDAR
HOUSE BILL NO. 44
"An Act designating the Joe Redington, Sr., Memorial Road."
- MOVED CSHB 44(TRA) OUT OF COMMITTEE
HOUSE BILL NO. 55
"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."
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 44
SHORT TITLE: JOE REDINGTON SR. MEMORIAL ROAD
Jrn-Date Jrn-Page Action
01/10/01 0049 (H) READ THE FIRST TIME - REFERRALS
01/10/01 0049 (H) TRA
01/12/01 0073 (H) COSPONSOR(S): MOSES, HALCRO
01/17/01 0117 (H) COSPONSOR(S): KERTTULA
01/23/01 Text (H) TRA AT 1:30 PM CAPITOL 17
BILL: HB 55
SHORT TITLE:OIL DISCH PREVENTION: NONTANK VESSELS/RR
Jrn-Date Jrn-Page Action
01/12/01 0070 (H) READ THE FIRST TIME - REFERRALS
01/12/01 0071 (H) TRA, RES, FIN
01/12/01 0071 (H) REFERRED TO TRANSPORTATION
01/23/01 Text (H) TRA AT 1:30 PM CAPITOL 17
WITNESS REGISTER
EDWARD GRASSER, Staff
to Representative Beverly Masek
Alaska State Legislature
Capitol Building, Room 128
Juneau, Alaska 99801-1182
POSITION STATEMENT: Presented sponsor statement for HB 44.
FRANK RICHARDS, State Maintenance Engineer
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Spoke on behalf of the Department of
Transportation & Public Facilities (DOT&PF) in support of HB 44.
LARRY DIETRICK, Director
Division of Spill Prevention & Response
Department of Environmental Conservation;
Member
Task Force on Motorized Oil Transport
410 Willoughby Avenue, Suite 303
Juneau, Alaska 99801-1795
POSITION STATEMENT: Spoke on behalf of the Department of
Environmental Conservation in support of HB 55.
DAN ELLIOTT
HC 3 Box 5196
Wasilla, Alaska 99654
POSITION STATEMENT: Testified on HB 55.
JOE LEBEAU
Alaska Center for the Environment
3375 Seagull Drive
Palmer, Alaska 99645
POSITION STATEMENT: Testified on HB 55.
MICHAEL O'HARA, Marine Pilot,
Southeast Alaska Pilots Association;
Co-Chair of the Prevention Work Group
Task Force on Motorized Oil Transport
P.O. Box 977
Homer, Alaska 99603
POSITION STATEMENT: Testified on HB 55 as Co-Chair of the
Prevention Work Group on the Task Force on Motorized Oil
Transport.
BRIAN ROGERS, Principal Consultant
Information Insights, Inc.;
Facilitator
Task Force on Motorized Oil Transport
Information Insights, Inc.
751 Old Richardson Highway, Suite 235
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified on HB 55.
PAUL FUHS, Marine Technical Consultant
Contractor
Task Force on Motorized Oil Transport
1635 Sitka, Number 301
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 55.
ACTION NARRATIVE
TAPE 01-4, SIDE A
Number 0001
CHAIR VIC KOHRING called the House Transportation Standing
Committee meeting to order at 1:40 p.m. Members present at the
call to order were Representatives Ogan, Wilson, Kapsner,
Kookesh, and Kohring.
Number 0273
CHAIR KOHRING reviewed committee procedures. He noted that the
House Transportation Standing Committee will typically meet
between 1-3 p.m. on Tuesdays and Thursdays. Four committee
members must be present for a quorum. If there were only four
members present at a meeting, then all four people would be
needed to move a bill out of committee. He mentioned that Mike
Krieber is the House Transportation Standing Committee Aide.
HB 44 - JOE REDINGTON SR. MEMORIAL ROAD
CHAIR KOHRING announced the first order of business would be
HOUSE BILL NO. 44 "An Act designating the Joe Redington, Sr.,
Memorial Road."
Number 0296
EDWARD GRASSER, Staff to Representative Beverly Masek, Alaska
State Legislature, presented the bill on behalf of the sponsor.
He explained that HB 44 deals with naming Knik-Goose Bay Road in
the Wasilla area after the famous Iditarod musher, Joe Redington
Sr. Several people had requested the name change, including
people along the road, Mr. Redington's family, and people who
lived outside of this district. The sponsors of this bill
believe that renaming this road is a fitting memorial for such a
great Alaskan [Joe Redington Sr.], because of its location. It
runs past the Iditarod headquarters, Knik, which used to be the
jumping-off spot for the Iditarod Trail.
MR. GRASSER stated that the bill is simple. There is one change
that has been suggested, to change "Road" to "Trail" which
reflects Mr. Redington's commitment to the trail. Mr. Grasser
mentioned that he had discussed this change with Chair Kohring's
staff, and if there was a committee substitute "we" would
"entertain" this change. [The change is reflected in the
proposed committee substitute (CS), 22-LS0076\F, Utermohle,
1/22/01.]
CHAIR KOHRING asked for the reason for changing the word from
"road" to "trail."
MR. GRASSER replied that Representative Kerttula had suggested
the change due to a request by her father. Mr. Grasser had then
contacted Mr. Redington's widow who concurred that the change
was a great idea. The change from "road" to "trail" represents
Joe Redington's dedication to starting the Iditarod [sled dog
race] and running it on a trail. He mentioned that there are
memorial highways that have more than one name. He stated that
the first 15 miles of Knik-Goose Bay Road would be co-named with
the title "Joe Redington Sr. Memorial Trail." This road still
has trails that go off of it, so "we" feel that this would be an
appropriate change.
Number 0460
CHAIR KOHRING made a motion to adopt the proposed committee
substitute (CS) for HB 44, version 22-LS0076\F ,Utermohle,
1/22/01 as a work draft. There being no objection, Version F
was before the committee.
MR. GRASSER commented:
We believe that Joe's commitment to the formation of
the Iditarod Sled Dog race, which has become a
worldwide phenomenon, certainly has put Alaska on the
map in a lot of different countries. People come from
all over the world either as spectators or as
participants. It's a truly unique Alaskan event, and
because Joe was so instrumental in getting it started,
we feel that this is a fitting memorial to such a
great Alaskan.
Number 0502
FRANK RICHARDS, State Maintenance Engineer, Department of
Transportation & Public Facilities (DOT&PF), stated that the
department is in favor of this bill. They will take the
necessary steps to designate the road and identify it with
signs.
CHAIR KOHRING asked how many signs would be placed on the road
and what the potential cost of the signs would be.
MR. RICHARDS replied that "they" would put one sign at each end
of the road, with an approximate cost of $500 a sign for a total
cost of $1000 dollars.
CHAIR KOHRING asked for clarification in that all the signs on
the road will not have to be redone because the road is being
re-named, not co-named.
MR. RICHARDS confirmed this statement. He said that "we" have
not added a fiscal note to the bill, but he is sure it is zero.
Number 0582
CHAIR KOHRING asked if the signs would be similar to the
Eisenhower Corridor sign in Anchorage.
MR. RICHARDS replied that the signs would be like those and are
similar to ones that "we" identify with memorial bridges.
CHAIR KOHRING stated that he lives up Knik-Goose Road and wanted
to note for the record that there is no perception of a
conflict.
REPRESENTATIVE OGAN made a motion to move CSHB 44 [Version 22-
LS0076\F, Utermohle, 1/22/01] out of committee with the zero
fiscal note and attached individual recommendations and asked
for unanimous consent. There being no objection, CSHB 44(TRA)
was moved out of the House Transportation Standing Committee.
HB 55 - OIL DISCH PREVENTION: NONTANK VESSELS/RR
Number 0730
CHAIR KOHRING introduced HOUSE BILL NO. 55, "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."
CHAIR KOHRING stated that he is not intending to move this bill
out of committee today, but it will depend on the will of the
committee. He asked if there was a representative of the
administration that would like to address the committee.
Number 0751
LARRY DIETRICK, Director, Division of Spill Prevention &
Response, Department of Environmental Conservation (DEC);
Member, Task Force on Motorized Oil Transport, explained that HB
55 is follow-up legislation to SB 273, which passed both sides
of the legislature last year.
MR. DIETRICK read the following testimony:
Chairman and members of the committee, I am pleased to
address you today on behalf of Commissioner Brown, who
is the chair of the Task Force on Motorized Oil
Transport. Commissioner Brown served on the steering
committee of the Task Force along with Senator Drue
Pearce and Representative Pete Kott. The Task Force
included a 23-member cross-section of the maritime
industry, the Alaska Railroad, and other interested
parties.
The goal of this legislation, HB 55, is simple. It's
designed to protect Alaska's renewable resources and
keep Alaska's waters the cleanest and the most
pristine in the world by including large seagoing
marine nontank vessels and the Alaska Railroad in the
Alaska safety net for oil spill prevention and
response.
In May of last year, the 21st Legislature debated and
passed Senate Bill 273 and Senate Concurrent
Resolution 1, which commissioned the Task Force on
Motorized Oil Transport to work out the details of how
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 to accomplish that. The consensus
legislation is HB 55, which is developed by the Task
Force and is predicated on no further amendments by
its members.
To provide a little more detail, ... 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
Senate Bill 273 and Senate Concurrent Resolution 1,
commissioned the Task Force to determine how to
implement the response planning standards and provide
opportunities for streamline oil contingency plans.
The standards that were set by the legislature last
year in SB 273 included the ability to contain and
control 15 percent of the maximum oil capacity of a
nontank vessel or train within 48 hours and clean up
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.
Number 0936
Senate Concurrent Resolution [1] specified the 23
members of the Task Force. The purpose of this was to
ensure diversity of viewpoints and adequate
representation of all groups to be regulated. The
members included representatives from the U.S. Coast
Guard, our department [DEC], the railroad spill
response cooperatives, the shipping industry, spot
charter groups, the fishing industry, regional
citizens advisory councils, and representatives from
the crude oil industry, and the refined oil
distributors and transporters. Any more persons who
were not appointed representatives attended the
workgroup sessions and formal Task Force meetings.
The Task Force held 11 meetings over a five-month
period beginning in last July in which the members
worked through legal and technical issues on
prevention, contingency plans, and response planning
standards. The Task Force, as part of its process,
broke down into three workgroups to address specific
areas of concern.
The recommendations that came out are included in a
report I think is included in your packet. The
recommendations of the Task Force were intended to be
practical. They meet the requirements that the
legislature established in last year's bill. It
included implementation measures that used a market-
based economy approach to keep costs down.
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.
Number 1054
Members of the Task Force were extremely attentive to
the proceedings and assimilated a tremendous amount of
information during their tenure. All meetings were
very 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 consensus to
support 31 recommendations, which are included in the
report. 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 statue. The bill you have before you is
the end result of this detailed process, and it is the
Task Force's recommendation that it be adopted without
amendment, recognizing that the legal language and
details have all been agreed to and an enormous amount
of effort has gone into its formation.
Overall, the bill is simple and straightforward in its
approach. It fundamentally makes SB 273, passed by
the legislature last year, effective while including
enabling language to support regulations detailing how
it will be implemented. These regulations have
effectively been negotiated through the Task Force
proceedings and will be drafted consistent with the
recommendations contained in the report.
The cooperation between industry, state
representatives, and lawmakers to develop
recommendations that are practical, reasonable and
economic is a really a tribute to the Task Force
members. The work provides a foundation for enhanced
spill prevention and response preparedness, thereby
ensuring our state resources and economy are
adequately protected for future generations. In the
end, the Task Force has successfully completed the
work requested by the legislature and has produced a
report and recommendations for rule making that
outline an acceptable means by which they will
participate in the states oil spill safety net. I am
very pleased to have been a part of the process.
Speaking for the Department of Environmental
Conservation, I can say that we support ... HB 55 and
offer our assistance as your deliberations move
forward.
Number 1162
I would also like to acknowledge the significant time
and cost invested by Task Force members that
participated in the process. I believe the Task Force
members acted in the interest of all Alaskans, and
their work will help Alaska's waters and make our
spill response measure up to protecting what are
arguably the most pristine and significant resources
in the world.
That concludes my remarks, Mr. Chairman. I would at
this time introduce Brain Rogers, who is in the
audience. Brian was the Task Force Facilitator and
was designated as the Task Force spokesperson by the
Task Force members. Paul Fuhs is also available in
the audience. He was a Task Force technical support
contractor, and he is available for questions also and
is in the audience. Also online is Mr. Breck
Tostevin, who is the state Assistant Attorney General
who is assigned to this legislation. That concludes
my remarks. I would also be available for questions.
Thank you very much.
Number 1220
REPRESENTATIVE KOOKESH asked Mr. Dietrick the definition of a
public vessel.
MR. DIETRICK replied that the Marine Highway System is included
in the public vessel definition, if the vessel is engaged in
commerce and over 400 gross tons. This definition was
determined in SB 273 last year.
CHAIR KOHRING asked if SB 273 was the "vehicle" through which
Mr. Dietrick tried to accomplish the same objectives [as HB 55].
MR. DIETRICK confirmed this remark. He said that SB 273 is
appended to that report [Task Force on Motorized Oil Transport
Final Report] as well as SCR 1.
Number 1249
CHAIR KOHRING asked what problems SB 273 had last year that did
not allow it to get through the legislative process.
MR. DIETRICK said that SB 273 established two fundamental
things. First, it required financial responsibility, which went
into effect on September 1 [2000]. Second, the bill established
the response-planning standard and defined what was included as
a nontank vessel. As the bill made its way through the
legislature last year, there were concerns about the cost,
practicality, and affordability of meeting the response planning
standard.
MR. DIETRICK stated that the end result was that the legislature
decided to establish a Task Force to design the portion of the
bill that detailed how nontank operators would meet response-
planning standards. Senate Concurrent Resolution 1 details the
membership of the Task Force. He stated that the response-
planning standard set out in SB 273 has not changed; HB 55
imposes the requirement to make it effective.
Number 1376
DAN ELLIOTT, representing himself, testified to the committee
via teleconference:
I am encouraging you to act on this bill. I think
that for every ad that I have listened to by a large
corporation about how environmentally responsible they
are, they got that way by being dragged there. Yet
its been good (indisc.) for the public and them in the
long run. As you know, recently with the Alaska
Railroad, that was an expensive school that they
weren't prepared for last year. We know that
accidents happen even with the best prevention. But
by the very nature, that is why they are called
accidents, whether influenced by nature or by man.
I wanted to bring to your attention something that you
may not have considered or realized. I'm more
concerned with the railroad than the other (indisc.)
of this bill. The development of Southcentral Alaska
has followed the Alaska Railroad, and that [includes]
Talkeetna, Willow, Wasilla. There is school after
school within a half mile of the railroad. I mention
schools because [they are] more of a sympathetic
victim. We are all subject to being victims, but [in]
particular, schools are areas that we want to be sure
to protect as much as possible. In realizing that
development has occurred this way, you realize how
many people can be affected if there is a serious
accident. It seems like every week or two out here on
the radio or t.v. [that] someplace, Arkansas, Montana,
or whatever, that they have evacuated people because
of some railroad accident.
Unfortunately, this bill does not seem to deal with
hazardous substances. Oil itself is bad enough where
there is the fish, animals, the water, subsequent
fire, contaminate in the air at the time of the spill.
But the hazardous substances are particularly an area
that I think should be a concern for tank cars and not
just oil. In any case, I would encourage you to
consider the public and responsible cooperation
actions...
Thank you.
Number 1537
JOE LEBEAU, Alaska Center for the Environment, testified via
teleconference:
I live near Palmer. I am employed currently by the
Alaska Center for the Environment. I retired from the
Department of Environmental Conservation in December
of 1999, and went to work for the Alaska Center for
the Environment. I was able to attend most of SB 273
Task Force meetings over the summer and into the fall,
both the Task Force meetings and the workgroup
meetings. I wanted to thank all of the people who
took part [in the meetings] and thank the Senate and
the House for the opportunity to have input at the
Task Force meetings.
My input is still the same. It appears to me that the
response timing standard is a little low. It may be
resolved with the test of time. The state legislature
may decide to come back and raise the response-
planning standard, at some point.
The other issue is hazardous substances. The bill
does not address hazardous substances that are
transported through all the Rail Belt communities. As
Mr. Elliot testified earlier today, ... a lot of
Alaskan communities are built up around the railroad,
and the railroad transports a number of hazardous
substances through the communities. I think it's
important that the railroad at some point be required
to prepare a response contingency plan and prevention
plan for hazardous substances. I fully support the
concept that the railroad be fully regulated as it is
set up in the bill, and I think this bill is a huge
step forward.
Thank you very much for your time.
Number 1658
MICHAEL O'HARA, Marine Pilot, Southeast Alaska Pilots
Association (SEAPA); Co-Chair of Prevention Work Group, Task
Force on Motorized Oil Transport, said that the Task Force
worked on making it economically advantageous for a ship to take
preventative measures to avoid a spill. The Task Force came up
with a number of recommendations, which will be beneficial to
safety.
REPRESENTATIVE OGAN asked Mr. O'Hara to help him visualize a
vessel that was 400 tons.
MR. O'HARA replied that he owns a boat that is 93 feet long,
with a 12-foot draft and 9-foot beam, that is 97 tons.
Therefore, a vessel that was 400 tons would probably be three
times those dimensions.
REPRESENTATIVE OGAN asked what these vessels would be hauling.
MR. O'HARA answered that these vessels can be "inland." For
example, the M/V Bartlett [an Alaska state ferry] is primarily
an inland ship, but "when it goes to sea, you put different
licenses on it."
REPRESENTATIVE OGAN asked about [other] ferries in the ferry
system.
MR. O'HARA stated that he was only familiar with the M/V
Bartlett and M/V Tustamena because they operate in Prince
William Sound, where he is from.
Number 1845
BRIAN ROGERS, Principal Consultant, Information Insights Inc.;
Facilitator, Task Force on Motorized Oil Transport, said that
his firm did the facilitation for the Task Force on Motorized
Oil Transport. He stated that the meetings were held to carry
out the provisions of SB 273 and SCR 1. It was a very public
process. Every meeting was publicly noticed, and meeting
transcripts were put on the web site to ensure that the public
knew what was going on. The company did a lot of data gathering
to determine how many vessels were likely to be affected and
what types of vessels were transiting in Alaskan waters that
would be subject to this.
Number 1878
MR. ROGERS stated that this would cover cruise ships, cargo
ships, container ships, and the largest of the fish processing
refrigeration vessels, for a total of 800-900 vessels. Some of
these are on regularly scheduled runs such as the cruise ships
through Southeast Alaska, while others enter Alaskan waters on
four or five days' notice to pick up cargo. This represents a
wide variety in addition to the Alaska Railroad.
MR. ROGERS noted that the group had reached unanimous agreement
on the 31 recommendations before the committee. He went on to
say that the majority of the recommendations do not require a
statutory change. Mostly, they require "fleshing out"
regulations through the process. House Bill 55 contains the
statutory change.
MR. ROGERS explained that the regulations would be based on the
Task Force discussions. The Task Force will ask the committee
to adopt a letter of intent which states that the report of the
Task Force and the work carried forward is intended to place
some general parameters on what that regulatory regime would be.
He said that this would take some time if the committee decides
to enact the bill this year, meaning passage by May of 2001.
MR. ROGERS stated that it will take about a year to get
regulations promulgated, and through the public review process
that would mean regulations would be issued around June 2002.
The bill provides that contingency plans are due 180 days after
the regulations are promulgated. Therefore, the initial
contingency plan would come in December 2002 or January 2003.
At that point, the vessels would need to have their response
equipment identified for containment and control.
MR. ROGERS said there is a longer time for cleanup equipment
since it is a heavier investment and "to try to spread the
capital cost." The committee developed a market-based approach,
which allowed several different avenues for compliance and
phased implementation. They tried to reach the initial goals of
the Task Force, which were that this process (on page 8 of
report) "be realistic, that it be effective, that it be
economically feasible and that it be flexible to meet the needs
of industry and the state."
MR. ROGERS explained:
Recommendations cover issues relating to response
planning standards, issues relating to contingency
planning, to prevention, and finally, the Alaska
Railroad. This bill activates the contingency
planning process. It enables the adoption of
regulations as proposed by the Task Force, and
contains some limitations on liabilities for certain
participants in the response process.
The recommendations in the response planning area
detail: What is it? What do we expect for people to
be able to control and contain [in] an oil spill
containing 15 percent of their volume?
Basically, that sets out that you need enough "boom"
to go three times the length of a vessel, to hold the
spill in and some method to deploy that "boom."
That's the basic core for a response to a spill event.
The second area for cleanup is [that] you need to have
in the region which you operate, or need to ... make
arrangements to get to that region within 24 hours, a
skimmer that can pick up the type of oil that you are
carrying (indisc.) to do that. The amount of fuel
that you have to be prepared to clean up is set forth
in the statute as 15 percent of your capacity. In
this bill, we allowed in the recommendations an
alternative if a vessel can demonstrate [that] their
capacity may be "X" but they normally only carry 60
percent of that when they are in Alaska's water. They
can demonstrate that through the department, and thus
their response-planning standard is set on what they
are actually doing, rather than some theoretical
maximum.
On contingency planning, basically the sea plan has
just a few elements. First it has to show that the
vessel has met the financial responsibility, has filed
that certificate. [They have to] designate a
qualified individual who can make decisions that bind
the company if there is a spill event. They have to
have a response-action plan that consists of how they
are going to initially notify authorities if there has
been spill; that they have a contract with a response-
action contractor who can deal with cleanup and a
contract with a incident-management team who can
manage all aspects of the incident; finally, that they
are meeting the current federal and international
requirements, the IMO [International Maritime
Organization] requirement.
Number 2107
They can either do that through contract or through
equivalent resources, or combination of the two. If
they want to do it themselves, [or] they want to do it
as a fleet, there are several different avenues in
here. The fleet plan is an alternative for a vessel
owner who may own quite a number of vessels. We also
have a provision for a generic contingency plan, and
basically, a vessel agent would have all the elements
of the plan in place ready for this spot charter who
comes in on four or five days' notice, faxes the
contracts out, the fax comes back in, and that plan is
activated and held so that they have met the
requirement under this law.
The recommendations set very tight time frames for DEC
to respond and review. They will allow for drills.
There are a series of voluntary prevention measures
set forth in the recommendations. It's the Task
Force's hope that this bill would be adopted with the
attached letter of intent that sets constraints on the
regulatory process.
Number 2160
REPRESENTATIVE OGAN wondered whether, if companies comply with
this, it would make a difference in the field when there is a
spill. It seems that "no matter how prepared we are or what we
do that the spills are always bad and they don't get very much
of it up," he remarked. He asked if this [HB 55] was going to
make a tangible difference.
Number 2192
MR. ROGERS replied yes. As a facilitator listening to the
group, his job was to bring the group to consensus. There is
clear understanding in the group that having a plan in place
reduces risk and damage to the environment. In order for vessel
owners to operate in Alaska's waters, they have to have someone
(on contract) ready to respond [in an oil spill event] or be
ready to respond themselves. A company with an incident
management team is going to be in better shape to respond to
that. Most important, a company that is informed as to where
the equipment is and that knows how to get it to the scene
quickly will be better off than a company that has to "start
looking in the Yellow Pages for a response." This has been the
history in the tank industry, especially for oil tankers which
go through a substantial drill process, and product tankers,
which are not covered by this and which are the barges that
carry fuel. Anyone in this industry would say that "having a
plan is less likely to be damaging to the environment than not
having a plan," Mr. Rogers concluded.
REPRESENTATIVE OGAN commented that there is tremendous liability
with HB 55 since Exxon is still in court with over 5 billion
dollars' worth of (indisc.) He said he is "always hesitant to
reach the long arm of government out and tell the people what
they have and have not to do." "Our" compelling interest is to
protect natural resources in the environment. However, this is
a mandatory program. He asked if there was any discussion about
a way to do this that was not a mandate.
Number 2285
MR. ROGERS replied that the mandate was set by last year's
legislature. It said that one had to be prepared to contain and
control 15 percent of one's capacity, and to clean up as
"reasonably as possible." The Task Force's job was to work out
the details of that decision and not to go back and question the
legislature's decision.
Number 2293
CHAIR KOHRING stated that the fiscal note shows that there will
be two to three additional personnel hired in December and more
regulation of industry. It will also cost more money, even
though it is not out of the general fund but the oil spill
response fund. The bottom line is that HB 55 means more
government. He said that the "folks that support the bill here
need to sell this thing hard to us to justify why we need more
government regulating an industry." He noted that he respects
the work of the committee and understands that they were asked
by the legislature to have a Task Force. He mentioned that the
House Transportation Standing Committee counted nine people at
this meeting who represent private industry as members of the
Task Force. He said:
I know you have done a lot of work on this. I
appreciate that very much. I recognize this and
acknowledge this. But I am concerned about the
additional government involvement and additional
regulations, because that is something I have worked
hard to minimize in my years in office.
MR. ROGERS commented that the Task Force was focused on how to
keep this process as simple as possible. He said that the
contingency plan and major facilities are "much more complex"
than what has been laid out. This is really a streamline
process designed in a negotiated rule making. This means that
the regulators and regulated community get together to figure
out what is going to work, to meet these needs. The negotiated
rule making process is "pretty good" because there is
attentiveness on the part of regulators regarding what the costs
are, and a understanding by the regulated communities as to what
the objectives of this process are.
Mr. ROGERS stated, as the observer who helped bring the group
together, "I think they strip down to the minimum bureaucratic
process that allows this to go forward." The process allows
turnarounds within five days of fairly complex documentation, he
said. The Task Force figured out how to do this even when
paperwork might come in on weekends or evenings. The Task Force
came up with "some creative ways" in keeping the process simple,
especially in addressing the concerns of the Spot Charter Group.
MR. ROGERS stated that for example, by accepting the word of a
company when it initially submits its contingency plan, rather
than saying "the answer is no until we say it's yes, in this
case the answer is yes unless we find a reason that it's no."
So, the initial department review when a company receives its
contingency plans is that "you filled out, you made statements,
we know you're subject to criminal penalties if you didn't tell
the truth." "We" will accept this at face value, he said.
These [contingency plans] will be reviewed over a cycle that
allows them to be spread out over a year, because there's going
to be a "whole slug of them coming in at once." He said he did
not know if the Task Force could have found another way of
"streamlining" that would be simpler than what is in this
legislation, this report.
Number 2246
CHAIR KOHRING stated that he was glad Mr. Rogers brought to
attention the willingness to accept the proposal for the letter
of intent (page 38 of the committee packet). This partly
addresses his concern that regulations might go beyond the
intent of the legislation. A letter of intent of this nature
makes it very clear that "we expect the regulations not to go
beyond a certain level, that's very good."
MR. ROGERS commented that the [letter of intent] is essential to
the Task Force's understanding of this legislation. The
transcripts in which the issues were discussed set the ground
rules for how this would operate at the regulatory and statutory
levels.
Tape 01-4, SIDE B
Number 2455
PAUL FUHS, Marine Technical Advisor; Contractor, Task Force on
Motorized Oil Transport, stated that HB 55 originates from last
year's legislation, which was adopted unanimously in the Senate.
In the House, there were 39 votes in favor of the bill. There
was one absence, so everyone present voted for the bill.
MR. FUHS said that the industry expressed concern regarding how
the regulations were going to be written. The industry
wondered, "Is this going to be so onerous that we can't live
with it? Is it going to be so expensive that it's going to
break our companies?" If the regulations went how they did with
tankers, with all of the requirements under OPA 90 [Oil
Pollution Act of 1990], it would have broken these small
businesses, and "they are not in the oil business; oil just
makes their boat go." However, they carry [oil] which presents
some risk to the environment. He said that this is why the
industry asked for this Task Force.
MR. FUHS explained that one of the most important parts of HB 55
is that it provides some "limits to liabilities" for nonprofit
contractors who will provide services on a very cost-effective
basis. These contractors would not have been willing to do this
if someone would have been able to sue them if they
[contractors] acted in "good faith" in response to an oil spill.
Vessel agents are included in this new marine exchange. So,
these were some of the cost factors used in the generic fleet
plans to minimize the cost of it.
MR. FUHS commented that this explains why the projected fiscal
note for the Marine Highway System is only $23,500, with
"today's rate." Response contractors expect their costs to
decrease as they get more members. In essence, the worst-case
scenario for the entire fleet of the Marine Highway System is
that the cost would be $23,500 a year, which is not
unreasonable. Consequently, the industry wants the letter of
intent which states that the department will use these proposed
regulations and will not "go off on their own and do something
different."
Number 2385
REPRESENTATIVE OGAN remarked:
Letters of intent aren't worth the paper they are
written on. The departments routinely promulgate
regulations well beyond the legislative intent, and
there's nothing we can do about it. We have no
recourse other than the Budget Acts. But we have a
regulation review committee and a full-time person
that sits there and reads all those [regulations].
... I don't know if we have ever, in the six-plus
years I've been here, had any effect on mitigating any
onerous regulations.
So I don't trust them, to be honest with you. I think
it might be naive for the industry to trust them. I
would like to see in legislation, frankly, that the
law is regulations and they can't pass any more
regulations beyond what it says in the statute.
That's kind of a unique concept that Al Vezey tried
pushing a few years ago. We put before the voters
three times a constitutional amendment that gives the
legislature the authority to repeal regulations. But
the legislature delegates that authority to legislate
to the administration, and then we can't do anything
about it when they don't do it right. I think it's a
real separation-of-powers issues. Anyway, thank you
for giving me a soapbox.
Number 2328
PAUL FUHS stated that the industry is always able to come back
to the legislature. The industry would find a "willing ear
now." If HB 55 is passed, he said, "in good faith people move
forward and then someone comes and does something different, I
think the industry is not shy about going to the legislature to
fix it." However, this letter of intent is critical to the bill
"for people, how they feel for it."
REPRESENTATIVE OGAN asked Mr. Fuhs if he has ever been aware of
someone feeling like he or she wasn't getting a "fair shake" by
the administration, and if so, has the legislature come back and
fixed it? He said he has "been here six years, and I don't
think I've ever seen it."
MR. FUHS replied that he could not think of an example. But, he
said, "in legislation that is passed all the time, [the
legislature] has gone in to really clarify issues and take
things out of regulation and put it into statute."
CHAIR KOHRING commented that it is odd that a private industry
would ask to be regulated. As a private-sector individual and
small-business owner, he said, "unless I had a gun held to my
head, I wouldn't go to government and say, 'would you please
regulate me more than what I already am?'" He said that he
appreciates the work of the committee, private-sector members of
the Task Force, spot charters, oil industry people, shipping
agents, and marine pilots. He appreciates efforts and
willingness on their part to support HB 55, but wonders whether
"they felt their hand is being forced."
Number 2237
MR. DEITRICH reiterated that the focus of the Task Force was to
react to the standard that was passed last year. Senate Bill
273 set the standard at 15 percent. The debate then became how
to implement that standard. So the Task Force did not take on
the issue of whether or not it "should be a different standard
or no standard or some new, higher, more stringent-standard."
The Task Force was focused solely how to make the standard work
in a way that works for industry, regulators, and other
interests. The Task Force dealt with issues such as how it was
going to work to make it affordable and cost-effective, and to
still do the job in terms of having nontank vessels and
railroads participate in the safety net. The Task Force
accepted the mission as it was given by the legislature. It
truly was a "good faith effort." There was a substantial amount
of "push-pull" in the Task Force proceedings and "yielding on
all sides to try and hit the Task Force mission," which was to
come up with a way to implement the standard. "We" did not get
to the issues that you [Chair Kohring] are raising, Mr. Deitrich
said. "We" just accepted the task of trying to carry out the
mandate of what was passed last year, like a "bunch of good
soldiers."
Number 2160
REPRESENTATIVE WILSON pointed out that everyone who has
testified on this bill has been in support of HB 55. She asked
if there was anyone here to speak against the bill.
CHAIR KOHRING asked if anyone was here to speak against the
bill. He inquired what prompted the bill other than the
legislature's forming the Task Force committee. He mentioned a
shipping accident in the Aleutians involving a vessel from the
Orient. He asked if there was just one incident that caused
concern or were there more. In short, he asked what prompted
the whole discussion and debate.
Number 2096
MR. DEITRICH clarified that the incident Chair Kohring was
referring to was the Kiroshima incident in Dutch Harbor. This
incident was cited, along with others in the data, to show that
the oil spill prevention response program that this state is
structured for has resulted in a significant reduction in the
number of spills for those who participate in the oil spill
safety net. The number of nontank vessel and railroad incidents
was one of the "main drivers" behind the original submission.
CHAIR KOHRING asked if there were laws already in place that
dealt with these issues. For example, he wondered if there was
a system of fines that would be an incentive for someone to
behave.
MR. DEITRICH said yes, the penalties that one would incur for
having a spill would apply regardless of whether or not one had
a contingency plan.
CHAIR KOHRING reiterated that the fiscal note shows that funding
is through the Oil and Hazardous Fund, not the general fund. He
asked Mr. Deitrich to explain the funding situation since he is
the drafter of the fiscal note and someone who noted the funding
source.
Number 2029
MR. DEITRICH explained that the fiscal note for HB 55 is set up
to follow the phasing that is envisioned with the legislation.
In the first year, the regulations will come "onboard" and "we"
will start to work with the stakeholder in terms of coordinating
with marine exchange, spill cooperatives, and people who will be
filing as primary response action contractors. "We" will be
working with them to "craft the package," to complete the rule
making in about a one-year period. Therefore, one person will
be hired for FY 02 to cover the startup of the program.
MR. DEITRICH specified that in fiscal years (FY) 03-04, the
plans are required to be submitted beginning 180 days after the
regulations. They will start coming in a "lump sum" beginning
in FY 03. The Task Force recommended that these plans be
received immediately, to conditionally improve them, and do
"file up" reviews in a staggered fashion. In doing so, they are
not all lumped together during the future. There is also a
capitalization period which was envisioned for "big ticket
items," primarily the skimmer and the storage device.
MR. DEITRICH stated that a second employee would start in FY 03
to help with completing the round of reviews for the initial
plans that are envisioned to be finished in FY 03 and FY 04.
"We" have allowed for up to two temporary employees to assist in
dealing with the "slug flow," he said.
MR. DEITRICH said that beginning at the end of FY 04, the number
of employees will go back down to two. This is what the long-
term renewal cycle is based on. The assumption is that there
will be 500 plans [oil contingency plans]. This number is based
on data from 900 vessels in Alaska that have applied for the
financial responsibility requirement. It is indicated in the
fiscal note that at the end of FY 04, the actual number and type
of plans received will be noted and any adjustments that might
be appropriate will be made.
MR. DEITRICH remarked that "we" assume the streamline approach
discussed by the Task Force will be the preferred approach (480
of the 500 plans). "We" are hopeful that this will be the
outcome, he said, based on activity seen with marine exchange
and discussion amongst the spill co-operations. The purpose of
the fiscal note is to cover new plans and renewals, exercise and
verification. There is a registration for the new entities for
which "we" will be providing instant management teams. They
will be registering as primary response action contractors in
the state.
MR. DEITRICH stated that the report also recommended that we
give a "heavy dose" of technology assistance and training to
everybody in the industry to help them get "the stuff in the
door, walk them through the process, and streamlining it." We
were also "tasked" by the Task Force to do electronic posting of
all the plans as a way of satisfying a public review
requirement. "We" will also be looking at a prevention credit
program; there were many good ideas, but they need some
additional work.
Number 1867
CHAIR KOHRING pointed out the notation in the fiscal note that
says two additional staff are projected for FY 03. He asked
what "assurances can you give the committee that we're not going
to see anything beyond that." He said that he is always looking
at the "bottom line" when it comes to the number of personnel in
agencies, particularly with new legislation. He also asked what
the assurances were that "we are not going to see a regulatory
process that's going to impose more on the industry than what we
are really expecting through this legislation, that will result
in additional employees."
MR. DEITRICH replied that the Task Force concurred that if there
was a fiscal note and a lot of positions [additional employees],
the program was getting too big or complex. At this time, "we"
do not envision more than two positions for FY 03 on a permanent
basis. There will definitely be one person for FY 01, to get
the program started, and two positions in FY 03, which would be
the "ramp up," because that is the first year the actual plans
start coming in.
CHAIR KOHRING referred to Mr. Rogers' comments on the voting
process of this bill [SB 273] in the House last year. He said
he wanted to note for the record that if "I understood the
intent of the legislation last year, I don't believe unless I
was absent, that I actually voted for this bill." He would not
have expected himself or Representative Ogan to have voted for
this bill last year.
REPRESENTATIVE OGAN commented that if there were 39 votes, then
either he or Chair Kohring must have voted for the bill last
year.
Number 1770
CHAIR KOHRING reiterated that he had concerns with "adding to
the bureaucracy." He said he is not saying he opposes the bill.
However, he suggested that HB 55 be held over until Thursday.
He meant no disrespect for the Task Force or those present at
the meeting who worked on HB 55. He said, "Your intent is very
honorable, and your heart is in the right place." He noted that
they put a lot of time and effort into this bill, which he
respects and appreciates. But, he still has some anxiety and is
not yet comfortable with passing the bill. House Bill 55 is a
complex bill with a lot of provisions. He would like to hold
the bill over in order to think about today's presentation more
thoroughly.
Number 1723
REPRESENTATIVE KOOKESH thanked the Task Force and individuals
who worked on HB 55. He said:
It's really amazing in this time and age that we can
have that kind of industry, Alaska public employees,
Alaska legislators, and everyone get together and not
have anybody oppose the legislation at the committee
level. I really appreciate the work. It's something
I wouldn't have spent a summer doing. I'm sure I
would have had other things to do or more interesting
things to do. But I appreciate you taking the time as
Alaskans to do it.
I understand the concern of the chairman and want to
assure him he will have another vote on the floor when
this comes up. He can vote however his heart desires.
But, as a member of this committee, I really feel we
need to move this forward, especially when you
consider that there's nobody from the industry or
public opposing it. I'm willing to allow the chair to
hold this over and allow him time to digest this and
ask any other questions.
But I want to take the time, for the record, to thank
you for all of your work, those in the public and
industry who have stepped forward to help us make this
a historical piece of legislation for Alaska. We have
not gone this route before, and it is new on our
horizon. I really appreciate your work.
CHAIR KOHRING echoed Representative Kookesh's thanks. He stated
that the lack of opposition to this bill is an important
consideration.
Number 1591
REPRESENTATIVE WILSON commented that she thought the Task Force
was very wise. They looked to the future and realized that if
they did this themselves, it would be "much better on business
and industry in the long run than if something came down from
the federal level." This could have been a lot worse. She
said:
I appreciate the work that has been done. I think in
the long run it will benefit Alaskans in all sections,
the public and business and industry. [I want all of
you to] realize that the economy of our state is
touched by this type of thing. I appreciate it.
REPRESENTATIVE OGAN remarked that he appreciated [Chair
Kohring's] willingness to hold HB 55 over. He said he would
like to work on "looking at feasibility (indisc.) to tighten up
the administration's ability to over regulate this." He has
seen language in other bills that might be appropriate. He
said, "I'll be willing to work with you" on that over the next
few days to try to come up with a possible amendment that people
in the industry would not oppose. It would give them "a little
bit of a circuit breaker" to ensure that they are not being
regulated beyond the letter of intent.
CHAIR KOHRING asked how "we" can be assured that "we" will not
see something go beyond the intent of the legislation. He said
he appreciated the effort of the letter of intent, but being
assured of this issue would make him more comfortable with the
bill. He stated that he wants to make sure that legislation is
not passed where the "committee is ultimately responsible for
[something] that, promulgated a lot of excise regulation that we
never expected or intended."
REPRESENTATIVE KOOKESH voiced his concern that he wanted to be
assured by Representative Ogan that he would be willing to work
with industry and people at the meeting on the amendment, so
that there won't have to be a "big discussion and a lot of
controversy" when it comes back [to the House Transportation
Standing Committee].
REPRESENTATIVE OGAN concurred with this statement.
[HB 55 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:50
p.m.
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