Legislature(2003 - 2004)

03/31/2004 01:34 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         March 31, 2004                                                                                         
                           1:34 p.m.                                                                                            
TAPE (S) 04-9                                                                                                                 
MEMBERS PRESENT                                                                                                               
Senator Bert Stedman, Chair                                                                                                     
Senator Thomas Wagoner, Vice Chair                                                                                              
Senator Gary Stevens                                                                                                            
Senator Kim Elton                                                                                                               
Senator Georgianna Lincoln                                                                                                      
MEMBERS ABSENT                                                                                                                
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 361                                                                                                             
"An Act relating to discharges from small commercial passenger                                                                  
vessels; and providing for an effective date."                                                                                  
     MOVED CSSB 361(CRA) OUT OF COMMITTEE                                                                                       
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 361                                                                                                                  
SHORT TITLE: SMALL CRUISE SHIP DISCHARGES                                                                                       
SPONSOR(s): RESOURCES                                                                                                           
03/04/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/04       (S)       CRA, RES                                                                                               
03/31/04       (S)       CRA AT 1:30 PM FAHRENKAMP 203                                                                          
WITNESS REGISTER                                                                                                              
Linda Hay                                                                                                                       
Aide to Senator Scott Ogan                                                                                                      
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced SB 361                                                                                        
Dan Eastman                                                                                                                     
Director, Division of Water                                                                                                     
Department of Environmental Conservation                                                                                        
410 Willoughby                                                                                                                  
Juneau, AK 99801-1795                                                                                                           
POSITION STATEMENT:  Testified on SB 361                                                                                      
Denise Koch                                                                                                                     
Division of Environmental Health                                                                                                
Department of Environmental Conservation                                                                                        
410 Willoughby                                                                                                                  
Juneau, AK 99801-1795                                                                                                           
POSITION STATEMENT:  Testified on SB 361                                                                                      
Brice Brockway                                                                                                                  
Vice President of Operations, Cruise West                                                                                       
2401 Fourth Ave. Suite 700                                                                                                      
Seattle, WA 98121                                                                                                               
POSITION STATEMENT:  Testified in support of SB 361                                                                           
Captain Michael Jones                                                                                                           
Lindblad Expeditions                                                                                                            
1415 Western Ave. Suite 700                                                                                                     
Seattle, WA 98101                                                                                                               
POSITION STATEMENT:  Testified in support of SB 361                                                                           
Chip Thoma                                                                                                                      
Box 21884                                                                                                                       
Juneau, AK 99802                                                                                                                
POSITION STATEMENT:  Testified on SB 361                                                                                      
Ray Gilespie                                                                                                                    
Lobbyist, Small Cruise Vessel Association                                                                                       
POSITION STATEMENT:  Testified on SB 361                                                                                      
ACTION NARRATIVE                                                                                                              
TAPE 04-9, SIDE A                                                                                                             
CHAIR  BERT  STEDMAN called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 1:34 p.m. Present                                                               
were Senators  Gary Stevens, Wagoner, and  Lincoln. Senator Elton                                                               
arrived one minute later.                                                                                                       
              SB 361-SMALL CRUISE SHIP DISCHARGES                                                                           
CHAIR BERT STEDMAN announced SB 361 to be up for consideration                                                                  
and asked Ms. Hay to come forward and introduce the bill.                                                                       
LINDA HAY,  aide to Senator  Scott Ogan, called attention  to the                                                               
sponsor statement  in the packets  and explained that  the intent                                                               
of  the bill  is to  create  a regulatory  system allowing  older                                                               
small passenger vessels  to continue to operate  in Alaska waters                                                               
while taking steps  to minimize discharge and harm  to the marine                                                               
CHAIR STEDMAN asked if there was  someone from DEC who would like                                                               
to speak.                                                                                                                       
DAN  EASTMAN,  director  of  the   Division  of  Water  with  the                                                               
Department  of   Environmental  Conservation   (DEC),  introduced                                                               
himself and  proceeded to  explain that  in 2001  the Legislature                                                               
passed  a  bill  directing  DEC  to  regulate  the  discharge  of                                                               
wastewater from cruise  ships. In February 2004  DEC released the                                                               
report "Assessment  of Cruise Ship  and Ferry  Wastewater Impacts                                                               
in  Alaska."   According  to  the  report,   the  news  regarding                                                               
wastewater discharges from cruise ships is good.                                                                                
Mr. Eastman  explained that large  cruise ships, which  have more                                                               
than 250 passengers, are complying  with the terms and conditions                                                               
set forth in  the 2001 legislation. Small cruise  ships are those                                                               
carrying  between 50  and 250  passengers and  although they  are                                                               
compliant while underway, they are  having difficulties when they                                                               
are stationary.                                                                                                                 
Early in  the session the  small cruise ship  industry approached                                                               
the department seeking  to work cooperatively to  deal with small                                                               
cruise ship compliance problems. DEC suggested:                                                                                 
        1. All new vessels must comply with the full force                                                                      
          and intent  of the  2001 legislation. "So  that we                                                                    
          would be  dealing and talking about  only existing                                                                    
        2. Both new and existing vessels must maintain                                                                          
          compliance  with  the  requirements  of  the  bill                                                                    
          including  those for  registration, for  sampling,                                                                    
          for reporting and inspection.                                                                                         
        3. DEC would work with existing vessels on                                                                              
          legislation to  develop best  management practices                                                                    
          in  regulation,  which   would  seek  to  optimize                                                                    
          wastewater  quality and  to  the extent  possible,                                                                    
          provide compliance with water quality standards.                                                                      
        4. There must be an end point so that this interim                                                                      
          arrangement  is of  limited duration  and not  for                                                                    
          all time.                                                                                                             
He concluded,  "So the bill  that you  have in front  of you                                                                    
reflects and meets these four  conditions in our opinion. We                                                                    
consequently  support  the bill.  We  have  provided a  zero                                                                    
fiscal note."                                                                                                                   
CHAIR STEDMAN  recapped that this  addresses small  already built                                                               
cruise ships  in state  waters that aren't  large enough  to have                                                               
waste  treatment   facilities  aboard.  He  then   asked  for  an                                                               
explanation of  what these vessels  do with gray and  black water                                                               
when they  are underway as  well as when they  are in port  or at                                                               
MR. EASTMAN  told him that cruise  industry representatives might                                                               
be better able to describe their current practices.                                                                             
SENATOR GARY STEVENS asked if  he is comfortable that new vessels                                                               
are capable of  carrying sewage and gray  water treatment systems                                                               
to make themselves compliant.                                                                                                   
MR.  EASTMAN  said  that  based on  their  discussions  with  the                                                               
industry,  new  vessels can  be  designed  to comply  with  water                                                               
quality standards in the 2001 cruise ship legislation.                                                                          
SENATOR GARY  STEVENS asked if the  bill has a date  for when new                                                               
vessels have to be built to compliance.                                                                                         
MR. EASTMAN thought  it was for vessels whose keels  were laid as                                                               
of January 1, 2004.                                                                                                             
SENATOR GEORGIANNA  LINCOLN asked  if it  was correct  that older                                                               
vessels wouldn't  have to comply  with the same standards  as the                                                               
new vessels.                                                                                                                    
MR. EASTMAN replied,  "The limit in the bill is  that we couldn't                                                               
require  physical  changes to  the  vessels  such that  it  would                                                               
require that  the vessels  undergo new  stability testing  by the                                                               
Coast  Guard." Short  of requiring  major structural  changes and                                                               
through  best  management  practices   that  are  promulgated  as                                                               
regulations, they  would require that the  industry do everything                                                               
that is feasible to improve wastewater quality.                                                                                 
SENATOR  LINCOLN  said that  didn't  really  answer her  question                                                               
because  she  couldn't  tell  what  would  prevent  someone  from                                                               
purchasing  an   old  vessel   that  didn't   require  wastewater                                                               
discharge  compliance  instead  of  having a  new  vessel  built.                                                               
Regardless  of  the fact  that  "best  management practices"  are                                                               
defined  on  page  3,  lines  24-26,  those  practices  call  for                                                               
protecting the environment "to the  maximum extent feasible." The                                                               
meaning of  that, she said, is  in the eyes of  the beholder. Why                                                               
wouldn't you take the easy and  less expensive way out and buy an                                                               
old vessel rather than face a retrofit?                                                                                         
MR. EASTMAN replied:                                                                                                            
     Vessels  with their  keel laid  before January  1, 2004                                                                    
     that  aren't currently  in service  could  be put  into                                                                    
     service. It's important, I  think, to understand though                                                                    
     that we would promulgate  by regulation best management                                                                    
     practices. It's  not a  free ticket,  it means  that we                                                                    
     will  regulate  the  vessels  in  a  way  that  doesn't                                                                    
     require substantial retrofitting  or changes - physical                                                                    
     changes  to the  vessel  that are  either currently  in                                                                    
     service or  the older  vessels that  would be  put into                                                                    
     As to your  second point - the  maximum extent feasible                                                                    
     - I  agree is in the  eyes of the beholder,  but as the                                                                    
     beholder, in  this case, it's always  difficult to draw                                                                    
     a line in terms of  use of words such as "practicable."                                                                    
     This  was a  compromise. It  seemed to  work to  us. It                                                                    
     incorporates the two concepts:  One, the maximum extent                                                                    
     -  as much  as possible,  and then  feasible with  some                                                                    
     sort of  practical limitations. The  judgment basically                                                                    
     leaves  it  to the  agency  to  define that  phrase  in                                                                    
CHAIR  STEDMAN said  his understanding  is that  the older  ships                                                               
would have  to be in  Alaska already. He  asked if it  is correct                                                               
that, "They couldn't, in two or  three years, bring in a ship out                                                               
of California or Florida that didn't comply."                                                                                   
MR. EASTMAN acknowledged that he  didn't know and said that would                                                               
be a good question for the sponsor.                                                                                             
SENATOR KIM ELTON recalled that  when the cruise ship legislation                                                               
was passed,  the assumption  was that  it would  spark technology                                                               
changes  on large  cruise ships  that  could then  be adapted  to                                                               
smaller cruise ships. That didn't  work as planned though because                                                               
instead of  adopting new technologies, they  elected to discharge                                                               
3 miles off shore and he  questioned whether that isn't why there                                                               
isn't more new technology.                                                                                                      
MR. EASTMAN  didn't agree entirely.  The technology is  there for                                                               
the larger cruise  ships, but the problem is that  it hasn't been                                                               
scaled down for smaller vessels.                                                                                                
SENATOR ELTON said:                                                                                                             
     So it's  not necessarily  the case that  the technology                                                                    
     isn't  being   employed  because   they're  discharging                                                                    
     elsewhere. You're  saying they do have  the technology.                                                                    
     Are you  then saying  that they are  discharging within                                                                    
     state waters using the new technology?                                                                                     
DENISE  KOCH, commercial  passenger vessel  program manager  with                                                               
DEC, told him:                                                                                                                  
     The  majority  of large  ships  have  installed what  I                                                                    
     broadly refer to as  advanced wastewater technology. So                                                                    
     technology  beyond  typical  marine  sanitation  device                                                                    
     that  employs technology  such  as  reverse osmosis  or                                                                    
     ultra filtration  and for  large vessels,  the majority                                                                    
     of those vessels  have, as of 2003, and  we expect this                                                                    
     trend to  continue - that  most vessels  have installed                                                                    
     advanced  technology and  they do  discharge in  Alaska                                                                    
     waters - for large vessels.                                                                                                
SENATOR ELTON asked how many  ships fall into the small passenger                                                               
vessel category  compared to the  total number of  cruise vessels                                                               
in Alaska.                                                                                                                      
MS. KOCH replied it's probably in the 5 to 10 percent range.                                                                    
CHAIR STEDMAN  restated her answer  saying that is for  the small                                                               
ships versus the small and large combined.                                                                                      
MS.  KOCH  conferred  with  Mr.  Eastman  then  said,  "5  to  10                                                               
SENATOR  LINCOLN  made  the  point   that  more  operators  could                                                               
potentially enter the state as a  result of SB 361 and questioned                                                               
how many ships  comprise the current 5 to 10  percent and whether                                                               
there was a projected number in the near future.                                                                                
MS. KOCH said that as of 2003,  there were 5 state ferries and 14                                                               
small cruise ships.                                                                                                             
SENATOR LINCOLN  asked again whether she  anticipated an increase                                                               
in the numbers of cruise ships as a result of this legislation.                                                                 
MR. EASTMAN told  her they have no information on  that, but they                                                               
don't anticipate  this legislation having  a great impact  on the                                                               
small cruise ship market.                                                                                                       
SENATOR GARY  STEVENS said the  point Senator Lincoln  brought up                                                               
regarding  additional  old  vessels  coming  into  the  state  is                                                               
interesting. He  then asked  if the same  vessels operate  in the                                                               
state from year to year.                                                                                                        
MS. KOCH  said that's correct,  DEC hasn't seen much  turnover in                                                               
the small  cruise ship industry  since 2003. The Cruise  West and                                                               
Lindblad Expedition vessels are substantially the same.                                                                         
SENATOR GARY  STEVENS asked if there's  anything she's identified                                                               
in the bill that wouldn't  allow different older vessels to enter                                                               
the market in Alaska.                                                                                                           
MS. KOCH  said she saw nothing  in the bill that  would prevent a                                                               
new older small vessel from coming up to Alaska.                                                                                
SENATOR ELTON  said he  was going  to pull on  that string  a bit                                                               
more and asked:                                                                                                                 
     If  in fact  a new  old vessel  does enter  the market,                                                                    
     would   they  have   to   ...   meet  that   three-year                                                                    
     requirement  that  they  have  a  permitted  wastewater                                                                    
     discharge regime or recipe?                                                                                                
MR.  EASTMAN  replied  they  would   have  to  comply  with  best                                                               
management practices for the three-year approval.                                                                               
CHAIR STEDMAN told Mr. Eastman to speak up.                                                                                     
MR. EASTMAN repeated his answer saying:                                                                                         
     That's correct  Senator Elton. The  premise that  a new                                                                    
     old vessel  - older  vessel -  arriving newly  or being                                                                    
     placed  newly in  service would  still  have to  comply                                                                    
     with  the  best  management  practices  that  we  would                                                                    
     promulgate by  regulation and get approval  for a three                                                                    
     year period to operate  using [indisc.] best management                                                                    
     practices from DEC.                                                                                                        
CHAIR STEDMAN  reconfirmed that they  must get approval  from DEC                                                               
to not comply with the large ship requirements.                                                                                 
MR.  EASTMAN said  that's basically  correct; instead  they would                                                               
have  to   comply  with  the  regulations   established  as  best                                                               
management practices.                                                                                                           
SENATOR ELTON asked for verification  that these are vessel based                                                               
rather than fleet based provisions.                                                                                             
MR. EASTMAN replied the best  management practices would apply to                                                               
the fleet and  then continued to say, "there may  be parts of the                                                               
regulations  that  provide  for vessel  specific  practices,  but                                                               
generally the regulations would  be developed and promulgated for                                                               
the fleet."                                                                                                                     
SENATOR LINCOLN  continued to question best  management practices                                                               
because of  the latitude  in defining  those practices.  She also                                                               
questioned  the language  stating that  the department  may adopt                                                               
regulations arguing that  it doesn't say the  department shall or                                                               
will adopt  regulations to implement  the subsection.  She opined                                                               
that  the permissive  language would  allow  the commissioner  to                                                               
decide whether there will be regulations.                                                                                       
MR. EASTMAN  conceded that he  hadn't considered that  point, but                                                               
DEC's intent is to draft regulations.                                                                                           
SENATOR ELTON read  from page 3, lines 15-17 and  opined that the                                                               
sentence sounds  as though the  requirements are  vessel specific                                                               
rather than fleet specific.                                                                                                     
MR.  EASTMAN agreed  with his  interpretation and  clarified that                                                               
the regulations  are broadly  written to  be fleet  specific, but                                                               
the actual plans that are submitted are vessel specific.                                                                        
CHAIR STEDMAN  announced that  he would  take testimony  from two                                                               
off-net sites  then return to  the committee room  for additional                                                               
testimony before bringing the matter back before the committee.                                                                 
BRICE BROCKWAY,  vice presidents  of operations for  Cruise West,                                                               
described  the two  New  World  Ship Management/Clifford  Cruises                                                               
ships. The first is a  300-foot vessel that caries 204 passengers                                                               
and crew  in the Bering  Sea and the  other is a  237-foot vessel                                                               
that carries  170 passengers and  crew in Southeast  waters. Next                                                               
he described  Cruise West as  a company that has  been conducting                                                               
tours in  Alaska since 1946.  Currently they operate  six vessels                                                               
in the state that carry from 70 to 114 passengers.                                                                              
He  emphasized  that the  wastewater  these  vessels process  and                                                               
discharge  meets   the  national/international   standards.  They                                                               
discharge while underway  at 6 knots and DEC  has determined that                                                               
this meets  Alaska standards. What  is at  issue in this  bill is                                                               
stationary  discharge  because   the  best  management  practices                                                               
include  no  discharge when  stationary.  It  is vessel  specific                                                               
because each vessel has different tankage ability.                                                                              
To  accommodate  the  vessel  differences   and  adhere  to  best                                                               
management  practices they  limit the  use of  certain facilities                                                               
and  carefully schedule  their  time in  port.  In addition  they                                                               
limit  time   at  anchor  because  they   don't  discharge  while                                                               
He noted the letters in  the packets addressing the concern about                                                               
the  stability change  issue.  The letter  from  the Elliott  Bay                                                               
Design  Group  naval  architects  should answer  why  the  cruise                                                               
companies  don't  want to  undergo  new  stability tests  or  re-                                                               
licensing and certification.                                                                                                    
CHAIR STEDMAN asked Mr. Brockway:                                                                                               
     Why would  you pump  out your  holding tanks  and bring                                                                    
     your boats  empty into  the harbor?  Why not  stop your                                                                    
     discharge, bring  you ships into  the harbors  and then                                                                    
     pump out your holding tanks?                                                                                               
MR. BROCKWAY  said that would be  ideal, but the problem  is that                                                               
there  aren't pump-out  stations in  Alaska.  "So what  we do  is                                                               
we'll process  through our type  II equipment as we're  under way                                                               
and then shut things down," he said.                                                                                            
CHAIR STEDMAN  said he understands  that a number of  these ships                                                               
aren't moored very far from municipal sewer systems.                                                                            
MR.  BROCKWAY replied  he was  probably referring  to the  larger                                                               
communities,  but  there  are  no   such  facilities  in  smaller                                                               
villages and towns.                                                                                                             
CHAIR  STEDMAN  said he  was  thinking  of Petersburg,  Wrangell,                                                               
Ketchikan and Juneau.                                                                                                           
MR. BROCKWAY said correct.                                                                                                      
SENATOR  LINCOLN asked  if they  use the  pump out  facilities in                                                               
those larger communities whenever they are available.                                                                           
MR. BROCKWAY  said, "No we're not.  But we are looking  into them                                                               
and we're actually  suggesting that maybe some more  of the towns                                                               
and so  on look into this."  Their vessels don't tie  up in small                                                               
yacht basins,  which is  more typically  where pump  stations are                                                               
SENATOR  LINCOLN remarked  that she  would encourage  them to  do                                                               
that. She then asked what it  would cost to retrofit one of their                                                               
MR.  BROCKWAY explained  that retrofitting  is very  involved. To                                                               
add more  tankage, the  vessels would have  to be  lengthened and                                                               
widened. "So you're going to  be running into millions of dollars                                                               
in some  cases." Changing  a vessel to  this extent  would entail                                                               
adhering to other cruise ship  construction regulations. "At that                                                               
point I think you  would either opt to not run  them in Alaska or                                                               
try to build new."                                                                                                              
SENATOR GARY  STEVENS indicated he  had a number of  questions on                                                               
the operations. He asked what the  vessel lifespan is, the age of                                                               
the fleet, and  whether the company favors  running older vessels                                                               
or purchasing new compliant ones.                                                                                               
MR. BROCKWAY replied  the average age of their fleet  is 23 years                                                               
and they are exploring the option of new construction.                                                                          
SENATOR GARY STEVENS asked how many  years they plan to use their                                                               
MR. BROCKWAY  told him that  when vessels are maintained  and are                                                               
inspected  regularly   they  could  be  used   indefinitely.  The                                                               
limiting  factor is  guest preference  and  they're finding  that                                                               
their guests prefer new ships.                                                                                                  
There were no further questions for Mr. Brockway.                                                                               
CAPTAIN  MICHAEL   JONES,  director  of  marine   operations  for                                                               
Lindblad Expeditions, testified via  teleconference in support of                                                               
SB 361. His company has  operated in Alaska since 1982 conducting                                                               
natural  history cruises  throughout  Southeast  Alaska. The  Sea                                                               
Lion  and  Sea  Bird  are 152-foot  sister-ships  that  carry  70                                                               
passengers and 24 crewmembers.                                                                                                  
He  noted  that  economic  impact statements  for  both  Lindblad                                                               
Expeditions and Cruise West were  included in the bill packets as                                                               
background  material.  They  give  some idea  of  the  companies'                                                               
Alaska marketing and money spent on fuel provisions and docking.                                                                
Referring  to the  discussion about  technologies that  have been                                                               
developed since  the 2001 legislation,  he pointed out  that most                                                               
of it is designed for much  larger ships and the footprint of the                                                               
wastewater  treatment systems  are typically  larger than  can be                                                               
accommodated  by the  smaller vessels.  In  addition, the  larger                                                               
vessels have  been able to  convert their ballast tanks  to solid                                                               
waste holding tanks,  but the smaller vessels  don't usually have                                                               
ballast tanks and therefore don't have that capability.                                                                         
As part  of the  best management practices,  Lindblad Expeditions                                                               
is working  with communities to  explore waste pump  out options.                                                               
In particular, their  agents have been in contact  with the ports                                                               
in  Sitka,  Juneau  and  Petersburg   to  discuss  the  different                                                               
alternatives. They are also adjusting  times in port or at anchor                                                               
and they are  limiting laundry schedules so that  the ships spend                                                               
less stationary  time since that  is when wastewater  disposal is                                                               
at issue.                                                                                                                       
Lindblad Expeditions  continues to work with  the manufacturer of                                                               
their  existing equipment  and others  to try  to improve  and/or                                                               
downsize  new  wastewater  technology  to fit  the  systems  into                                                               
existing smaller vessels.  They are trying to  meet the standards                                                               
without  having to  reconstruct the  vessels and  that's quite  a                                                               
challenge, he said. Recent estimates  indicate that it would cost                                                               
$1 million  to modify the  Sea Bird, the  vessel would be  out of                                                               
service for  three to four months,  and after the refit  it would                                                               
accommodate six fewer guests.                                                                                                   
CHAIR  STEDMAN  asked him  to  elaborate  on the  procedures  for                                                               
handling wastewater  discharge when at anchor  in restricted bays                                                               
for daytime excursions and also for overnight moorage.                                                                          
CAPTAIN JONES  explained that  the idea is  to discharge  all the                                                               
wastewater when they are cruising  offshore at six knots. When at                                                               
anchor, their  ships have the capability  of remaining stationary                                                               
for about  six hours before  they have  to get underway  again to                                                               
pump. The  boat is  anchored while guests  go on  day excursions,                                                               
which  seldom last  longer than  four  hours and  they are  often                                                               
underway  during the  night. He  said  he couldn't  think of  any                                                               
small bays that they anchor in overnight.                                                                                       
There were no further questions for Captain Jones.                                                                              
CHIP  THOMA,  representing  himself,  informed  members  that  he                                                               
served  as  a citizen  representative  on  the 2001  cruise  ship                                                               
initiative. DEC,  the Coast Guard, and  citizens collaborated and                                                               
eventually came to a consensus on cruise ship discharge testing.                                                                
Giving  some  background,  he  told  members  that  according  to                                                               
onboard  pilots, the  approximately 25  large ships  operating in                                                               
Alaska were targeting donut holes  to legally discharge sewage in                                                               
inside  waters.  "Some  of  those  existed  right  down  here  in                                                               
Fredrick Sound, some in Icy  Strait at Point Adolphus. These were                                                               
areas that were three miles away  from shore so they were legally                                                               
outside state jurisdiction."                                                                                                    
These large  ships were  discharging large  amounts of  sewage in                                                               
these donut holes  and as a consequence,  Senator Frank Murkowski                                                               
sponsored  federal legislation  to test  the ships'  discharge of                                                               
black and  grey water.  He described the  levels as  "through the                                                               
roof" due largely to the  fact that the onboard treatment systems                                                               
were not maintained. Since then  the larger ships have gotten new                                                               
treatment  systems  and use  their  ballast  tanks as  wastewater                                                               
holding tanks.  When the legislation  was passed the  small ships                                                               
were  given  a three-year  exemption.  Mr.  Thoma said  this  was                                                               
justified because the ships were all U.S. built and crewed.                                                                     
Although SB 361  is an effort to address the  gap in coverage, he                                                               
is concerned  with the statements  saying that the  vessels can't                                                               
feasibly comply  with the program  to eliminate  the unacceptably                                                               
high  levels  of  grey  and black  water  because  of  technology                                                               
limitations. Referring  to the letter  from marine  engineer John                                                               
Waterhouse,  he said  he appreciates  the  concerns about  adding                                                               
volume to the vessels, but  the letter didn't address replacement                                                               
with new treatment  systems of equal or  comparable weight. There                                                               
shouldn't be  a problem with that  concept he said, but  the bill                                                               
doesn't encourage  such replacements. "I personally  believe that                                                               
technology can cure the ships'  discharge problems without adding                                                               
any weight or volume or stability problems," he declared.                                                                       
He suggested the following changes:                                                                                             
        · Page 3, line 20 - change "protecting the                                                                              
          environment"  to "safeguarding  public health  and                                                                    
          protecting important wildlife habitat"                                                                                
        · Page 3, line 21 - change "may" to "shall"                                                                             
        · Page 3, lines 21-24 - the sentence is too                                                                             
          permissive, it  may preclude  DEC from  talking to                                                                    
          small ships about  replacing or retrofitting their                                                                    
          systems because  you could  get a  marine engineer                                                                    
          to  say   that  there  will  be   testing  or  re-                                                                    
        · The technology is changing quickly and extending                                                                      
          the exemption  until 2016 isn't  necessary. Change                                                                    
          the date to 2010 and  if an extension is needed at                                                                    
          that time then revisit the issue then.                                                                                
        · Page 6, lines 1-10 - Subsections (1)-(4) are                                                                          
          important  and  without  specific  identification,                                                                    
          they are  referring to the donut  holes. The small                                                                    
          cruise  ships are  targeting  these areas  because                                                                    
          they are wildlife rich, but  they are also able to                                                                    
          dump their  sewage there.  Under this  bill, there                                                                    
          is no opportunity to change  that for 10-12 years.                                                                    
          He  recommended that  DEC  reference  some of  the                                                                    
          sensitive  areas in  the bill  and designate  them                                                                    
          and stay 2-3 miles away when discharging.                                                                             
SENATOR  ELTON referred  to the  suggested change  in wording  on                                                               
page 3, line  20 and argued that "protecting  the environment" is                                                               
broad language  and the substitution  might make it  too specific                                                               
and  more difficult  for the  department  to regulate  wastewater                                                               
MR. THOMA said his interpretation was the opposite.                                                                             
SENATOR ELTON  contended that "protecting  the environment"  is a                                                               
large umbrella  and "protecting important wildlife  habitat" is a                                                               
smaller one and could be construed too specifically.                                                                            
He then asked DEC about the  suggestion that it might be possible                                                               
to  shop for  a  marine  engineer to  receive  an exclusion  from                                                               
MR.  EASTMAN  admitted  to  knowing   little  about  Coast  Guard                                                               
stability testing regulations, but he  did know that retesting is                                                               
triggered  by a  2 percent  change in  vessel displacement.  That                                                               
being said,  he pointed out that  others knew more than  he about                                                               
stability  testing. He  asserted  that he  certainly didn't  know                                                               
whether it is possible to shop  around for a marine architect who                                                               
would  say  that most  any  change  would require  new  stability                                                               
SENATOR LINCOLN asked where the  information sheet came from that                                                               
began, "Small  Cruise Vessel Alternate Compliance  Program is not                                                               
an exemption  from environmental laws." She  commented that point                                                               
(2) specifically  refers to  just 12  older vessels  built before                                                               
CHAIR STEDMAN remarked that it  is his understanding that this is                                                               
a specific  list of  the ships and  ferries that  were identified                                                               
earlier and  under these rules the  ability of bringing in  a new                                                               
older vessel doesn't exist.                                                                                                     
SENATOR LINCOLN  pointed to page 2,  line 8 of the  bill and read                                                               
(b). She agreed with the  Chair and interpreted that as including                                                               
just those existing 12 vessels, but  she wanted to make sure that                                                               
was the case. She asked DEC to interpret the subsection.                                                                        
MR.  EASTMAN said  the  department didn't  author  the bill,  but                                                               
"There is  nothing in the bill  that I see that  would prohibit a                                                               
company from taking  a vessel whose keel was  laid before January                                                               
1,  [indisc.]  vessel  not currently  in  Alaska's  small  cruise                                                               
vessel  market and  putting it  into service  in Alaska.  There's                                                               
nothing in the bill that I'm aware of that would prohibit that."                                                                
SENATOR  LINCOLN  repeated, "So  that  portion,  'to continue  to                                                               
operate in Alaska waters,' on page  2 - you wouldn't interpret it                                                               
that way?"                                                                                                                      
MR.  EASTMAN said  just in  a  broader sense,  "not the  specific                                                               
vessels would  continue, but that  older vessels  generally could                                                               
continue to operate in Alaska waters."                                                                                          
SENATOR  ELTON   asked  for  his   opinion  as  to   whether  the                                                               
"protecting  the environment"  terminology in  Section 6  was too                                                               
vague  because  he  thought it  accommodated  broader  regulatory                                                               
authority than the suggested change.                                                                                            
MR. EASTMAN  told Senator Elton  he agreed with his  comments and                                                               
SENATOR  WAGONER noted  Senator Lincoln's  first question  asking                                                               
who wrote the document hadn't been answered.                                                                                    
RAY  GILESPIE,  lobbyist  representing the  Small  Cruise  Vessel                                                               
Association, came  forward and said  he authored the  document as                                                               
an outline  for his clients  to use in discussions  with vendors.                                                               
When  he  stated  that  12  older vessels  would  remain  in  the                                                               
program, he used  that number because it was the  number that was                                                               
given to him.  However, "I don't know that that  is precisely the                                                               
number that  the department would  say because I think  from year                                                               
to year it might vary by  one or two vessels," and "You'll notice                                                               
that's  a  parenthetical,  it  wasn't  meant to  limit  -  in  my                                                               
estimation  it  wasn't  intended  to  limit  the  scope  of  this                                                               
SENATOR  WAGONER asked  him if  that  means it's  just a  working                                                               
document that he provided for his clients.                                                                                      
MR.  GILESPIE replied  that's correct,  but in  their discussions                                                               
with the  department the  issue was  raised that  if you  were to                                                               
restrict  other competitors  from  operating on  the same  basis,                                                               
significant  anti trust  questions  would  arise. The  department                                                               
wasn't interested in that occurring.                                                                                            
SENATOR LINCOLN referred to page 2,  line 8 and asked if he would                                                               
interpret the  sentence to  mean those  existing vessels  and not                                                               
new older vessels coming into Alaska.                                                                                           
MR. GILESPIE  replied, "My interpretation  of that, based  on our                                                               
discussions with DEC  is that new older vessels  would be allowed                                                               
to come into the Alaska  trade because the impact of interpreting                                                               
it the other  way is you implicate some sort  of restrictive anti                                                               
trust measure  that limits your  existing tourist vessels,  and I                                                               
think it  would probably  raise some  real significant  issues in                                                               
terms of federal anti trust as well as state anti trust laws."                                                                  
SENATOR LINCOLN  asked whether the  same anti trust  issues would                                                               
arise if a  cutoff date were inserted for older  small vessels to                                                               
enter the Alaska market.                                                                                                        
MR.  GILESPIE  thought  there would  be  significant  anti  trust                                                               
implications  if the  number  of small  vessels  were limited  to                                                               
those existing in the trade.                                                                                                    
SENATOR GARY STEVENS  asked if it's true that  older vessels have                                                               
to comply  at some point  and if so,  where that is  mentioned in                                                               
the bill.                                                                                                                       
MR. GILESPIE  explained that under the  legislation the Alternate                                                               
Compliance Program expires in 2016.  "In the meantime, the vessel                                                               
operators intend  to, and  are required  under this  bill, submit                                                               
three year best  management practice programs," and  if there are                                                               
technology  developments, the  department  can certainly  require                                                               
them as  a best management  practice. So if a  smaller wastewater                                                               
system were developed  prior to 2016 that didn't  implicate the 2                                                               
percent stability,  the department would be  empowered to require                                                               
SENATOR ELTON said the 2  percent stability testing seems to draw                                                               
a rather bright line and  he wondered whether Mr. Gilespie agreed                                                               
or did  he think that  you could shop  for a surveyor  that would                                                               
give you different opinions.                                                                                                    
MR.  GILESPIE said  that Mr.  Brockway or  Mr. Jones  were better                                                               
able  to answer  the  question  than he,  but  he  thought the  2                                                               
percent figure came from Coast Guard regulation.                                                                                
CHAIR STEDMAN asked  whether Senator Elton wanted one  of the men                                                               
to respond.                                                                                                                     
SENATOR ELTON replied he would like either of them to respond.                                                                  
CHAIR  STEDMAN  asked  Mr. Brockway  to  answer  Senator  Elton's                                                               
MR. BROCKWAY said it would be  difficult for a naval architect to                                                               
write  a  letter  stating  that  you're into  a  situation  of  2                                                               
percent.  Providing  further  explanation  he said  that  when  a                                                               
modification is  done, everything  that's taken  off the  ship is                                                               
weighed then  everything that  is put  on is  weighed as  well to                                                               
determine  whether  there   is  a  net  change.   If  the  change                                                               
approaches 2  percent then the  Coast Guard will  require incline                                                               
and stability testing and additional buoyancy might be required.                                                                
There was no further testimony.                                                                                                 
CHAIR STEDMAN  asked Senator Lincoln  if she had an  amendment to                                                               
SENATOR  LINCOLN  offered the  following  amendment:  On page  3,                                                               
lines 15 and 21 change the word "may" to "shall."                                                                               
CHAIR  STEDMAN asked  if there  was objection  and Senator  Elton                                                               
said he would  object for the purpose of getting  a reaction from                                                               
MR.  EASTMAN advised  that  the department  had  no objection  to                                                               
changing  may to  shall on  line  21 because  it simply  reflects                                                               
their plans, but he  wasn't so sure on the change  on line 15. AS                                                               
46.03.462 (e) offers  one of three ways that a  vessel can comply                                                               
with the cruise ship legislation. He continued to say:                                                                          
     A  vessel,  small  or  large,   can  comply  by  simply                                                                    
     complying with the  standard terms - that  would be 462                                                                    
     (b) [AS .03.462 (b)].  It can comply through submission                                                                    
     of something  we call  interim protective  measures but                                                                    
     it's  another form  of alternative  compliance so  that                                                                    
     would be  462 (c)  [AS 46.03.462 (c)].  And then  (e) -                                                                    
     this new  provision (e) [AS  46.03.462 (e)] would  be a                                                                    
     third way  that a  vessel could  comply. And  by making                                                                    
     this a mandatory submission, I  would I guess just want                                                                    
     to make  sure that  this recognizes  that a  vessel may                                                                    
     not choose  462 (e) at  all, it  may decide to  go with                                                                    
     prior subsections.  So it's the  only reason I  can see                                                                    
     to keep the permissive may in there.                                                                                       
SENATOR  LINCOLN  responded that  it  just  says that  the  owner                                                               
operator  shall   submit  a  plan   for  alternative   terms  and                                                               
conditions  for  vessel  discharges  if a  keel  is  laid  before                                                               
January 1, 2004. "They may do  all of these other things as well,                                                               
but in addition  they would have to have a  plan submitted to the                                                               
department." What  would be the  harm of making that  "shall" she                                                               
CHAIR STEDMAN asked Mr. Eastman whether he wanted to respond.                                                                   
MR.  EASTMAN said  he really  didn't want  to respond  because he                                                               
really wasn't sure.                                                                                                             
SENATOR  ELTON reasoned  that if  the first  may were  changed to                                                               
shall and you  decided to comply with either the  first or second                                                               
option  the use  of "shall"  would make  it sound  as though  you                                                               
would  still have  to comply  with the  third alternative  (e) as                                                               
well. "But  if they're complying with  the law by not  asking for                                                               
an exemption,  why should they  have to apply for  an alternative                                                               
way  of discharging.  I think  that's  what Dan  was saying,"  he                                                               
SENATOR GARY STEVENS asked Mr.  Eastman to restate the three ways                                                               
to comply and point them out in the bill.                                                                                       
MR. EASTMAN told him that  the bill doesn't specifically speak to                                                               
the first two options.                                                                                                          
SENATOR  GARY  STEVENS  asked  him   to  restate  the  first  two                                                               
compliance options.                                                                                                             
MR. EASTMAN referred to the statute book and said:                                                                              
     The first  one is  simply to  comply with  the standard                                                                    
     terms  and conditions  established in  the legislation.                                                                    
     The second  is -  and I'll  point out  this is  in [AS]                                                                    
     46.03.462 (c) it says the  department may - and there's                                                                    
     a may here  not a mandatory shall -  the department may                                                                    
     establish  alternative  terms  and conditions.  So  the                                                                    
     second is an existing  alternative terms and conditions                                                                    
     provision. There's  a third (d) it  says [AS] 46.03.462                                                                    
     (d) provides  another alternative terms  and conditions                                                                    
     provision again.  And then there's  the new  (e), which                                                                    
     is the last alternative terms and conditions.                                                                              
MR.  EASTMAN questioned  whether he  confused everyone  with that                                                               
explanation,  but  the idea  is  that  there  are three  ways  to                                                               
comply. His concern  is that if you have a  choice and one choice                                                               
says you shall submit a plan, which doesn't seem like a choice.                                                                 
SENATOR  WAGONER  understood  that  any of  the  three  ways  are                                                               
acceptable to  DEC so you  don't want  to force doing  all three.                                                               
"Does that kind of sum it up," he asked.                                                                                        
MR. EASTMAN said  it does then added, "Or at  least certainly not                                                               
one of the three."                                                                                                              
CHAIR STEDMAN asked  Senator Lincoln if she wanted  to modify her                                                               
SENATOR LINCOLN said she would  split the amendment. She motioned                                                               
to adopt amendment  1, which would be to change  "may" to "shall"                                                               
on page 3, line 21.                                                                                                             
CHAIR STEDMAN announced  that the original amendment  was off the                                                               
table and  this was  a modified  version. He  asked if  there was                                                               
objection and there was none.                                                                                                   
SENATOR LINCOLN said  she wouldn't offer the  second amendment at                                                               
that time. The bill was  referred to the Resources Committee next                                                               
and  she would  do more  research and  perhaps offer  it in  that                                                               
committee. She  said look at  page 3, line  27 where it  says, "A                                                               
plan submitted under  (e)." That's the subsection  that says they                                                               
"may" and  that places a cutoff  on December 31, 2015.  She said,                                                               
"I  want to  make sure,  if they  have a  choice and  they're not                                                               
going to submit  a plan and they go through  these other two then                                                               
does  that mean  that they  can extend  beyond 2015?"  She agreed                                                               
with Mr.  Thoma and didn't  want vessels exempted too  many years                                                               
MR. EASTMAN said, "In the  current existing other ways to comply,                                                               
using  alternative  terms  and conditions,  there  is  no  sunset                                                               
provisions.... But they are also  more restrictive.... They set a                                                               
higher standard  to execute compliance through  alternative terms                                                               
and  conditions." An  example  of  that would  be  a request  for                                                               
alternative  terms and  conditions  because the  vessel is  using                                                               
experimental  technology. The  other  options  are more  specific                                                               
than the  new proposed  subsection (e). He  said, "I  assume that                                                               
the  Legislature  decided they  were  specific  enough that  they                                                               
didn't  see fit  to actually  end it  on a  date certain  and was                                                               
comfortable in allowing it to continue basically forever."                                                                      
CHAIR STEDMAN asked  Senator Lincoln if that  was satisfactory or                                                               
would she  like to  hear from  DEC between  now and  the Resource                                                               
SENATOR LINCOLN said, "I would love that."                                                                                      
CHAIR  STEDMAN asked  Mr. Eastman  to clarify  that with  Senator                                                               
Lincoln's office.                                                                                                               
SENATOR ELTON asked for leeway to  expand on that request and ask                                                               
DEC  to  distribute  their comments  to  the  Resource  Committee                                                               
regarding  whether  the  language  on page  3,  lines  21-24  may                                                               
preclude  DEC's ability  to discuss  replacement  of MSD  systems                                                               
with small ships.                                                                                                               
SENATOR  LINCOLN   added  one  more   request.  She   wanted  the                                                               
department to  review page 2, line  8 and comment on  the federal                                                               
and   state  anti   trust  implications   that  were   previously                                                               
There was no further discussion.                                                                                                
CHAIR STEDMAN asked for a motion.                                                                                               
SENATOR  WAGONER motioned  to move  CSSB 361(CRA)  from committee                                                               
with individual  recommendations and attached fiscal  note. There                                                               
being no objection, it was so ordered.                                                                                          
CHAIR STEDMAN adjourned the meeting at 3:00 pm.                                                                                 

Document Name Date/Time Subjects