Legislature(1999 - 2000)

04/17/2000 04:15 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   SENATE RESOURCES COMMITTEE                                                                                 
                         April 17, 2000                                                                                         
                            4:15 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Pete Kelly                                                                                                              
Senator Jerry Mackie                                                                                                            
Senator Lyda Green                                                                                                              
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Sean Parnell                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 304(FIN) am                                                                                               
"An Act  relating to issuance  and sale  of revenue bonds  to fund                                                              
drinking  water  projects, to  the  Alaska  clean water  fund,  to                                                              
creation  of an  Alaska  clean water  administrative  fund and  an                                                              
Alaska drinking water  administrative fund, to fees  to be charged                                                              
in connection  with loans  made from the  Alaska clean  water fund                                                              
and the  Alaska drinking water fund,  and to clarification  of the                                                              
character and permissible uses of  the Alaska drinking water fund;                                                              
amending Rule  3, Alaska Rules  of Civil Procedure;  and providing                                                              
for an effective date."                                                                                                         
     -MOVED SCS CSHB 304(RES) OUT OF COMMITTEE                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 432(FIN)                                                                                                  
"An Act  extending the  termination date of  the Board  of Storage                                                              
Tank Assistance;  expanding the  authority of  the board  to issue                                                              
recommendations  concerning  cleanup  decisions; relating  to  the                                                              
eligibility   of   certain  nonprofit   entities   for   financial                                                              
assistance  under the  tank  cleanup grant  program  and the  tank                                                              
upgrading  and closure  program;  and providing  for an  effective                                                              
date."                                                                                                                          
     -HEARD AND HELD                                                                                                            
                                                                                                                                
SENATE BILL NO. 308                                                                                                             
"An Act  relating to  certain passenger  vessels operating  in the                                                              
marine waters of the state."                                                                                                    
     -HEARD AND HELD                                                                                                            
                                                                                                                                
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
                                                                                                                                
HB 304 - See Resources minutes dated 4/10/00.                                                                                   
                                                                                                                                
HB 432 - No previous Senate action.                                                                                             
                                                                                                                                
SB 308 - No previous Senate action.                                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Juli Lucky                                                                                                                  
Staff to Senator Halford                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Explained changes made to SCS CSHB 304(RES)                                                              
                                                                                                                                
Ms. Lorali Meier                                                                                                                
Staff to the House Resources Committee                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 432                                                                      
                                                                                                                                
Mr. John Barnett                                                                                                                
PO Box 240651                                                                                                                   
Douglas, AK  99824                                                                                                              
POSITION STATEMENT: Answered questions regarding the Storage Tank                                                             
Assistance Program                                                                                                              
                                                                                                                                
Representative Beth Kerttula                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HB 371, House version of SB 308                                                               
                                                                                                                                
Mr. Jim Hayden                                                                                                                  
Storage Tank Program Manager                                                                                                    
Department of Environmental Conservation                                                                                        
400 Willoughby St.                                                                                                              
Juneau, AK  99801-1795                                                                                                          
POSITION STATEMENT:  Answered questions regarding SB 308                                                                      
                                                                                                                                
Captain George Capacci                                                                                                          
Alaska Marine Highway                                                                                                           
Department of Transportation and Public Facilities                                                                              
3132 Channel Drive                                                                                                              
Juneau, AK  99801                                                                                                               
POSITION STATEMENT:  Answered questions regarding SB 308                                                                      
                                                                                                                                
Mr. Robert Reges                                                                                                                
Ruddy, Bradley, Kolkhorst and Reges                                                                                             
8800 Glacier Highway                                                                                                            
Juneau, AK  99801                                                                                                               
POSITION STATEMENT:  Supports SB 308                                                                                          
                                                                                                                                
Mr. John Hansen, President                                                                                                      
North West Cruise Ship Association                                                                                              
Main Floor, 1111 W. Hastings Street                                                                                             
Vancouver, BC V6E213                                                                                                            
POSITION STATEMENT:  Believes SB 308 is unnecessary                                                                           
                                                                                                                                
Mr. Gershon Cohen                                                                                                               
Earth Island Institute                                                                                                          
Haines, AK                                                                                                                      
POSITION STATEMENT:  Supports SB 308                                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 00-27, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD called the Senate  Resources Committee meeting to                                                            
order  at 4:15  p.m.   Present were  Senators  Pete Kelly,  Green,                                                              
Taylor,  Lincoln  and  Chairman  Halford.    The  first  order  of                                                              
business to come before the committee was HB 304.                                                                               
                                                                                                                                
           HB 304-CLEAN WATER FUND/DRINKING WATER FUND                                                                      
                                                                                                                                
CHAIRMAN HALFORD  announced that  a committee substitute  (CS) was                                                              
prepared for HB 304.  The CS includes changes on page 7 and 11.                                                                 
                                                                                                                                
MS.  JULI  LUCKY,   staff  to  the  Senate   Resources  Committee,                                                              
explained that in  the proposed CS (Version M)  language was added                                                              
to page 7, lines  21 and 22 to allow DEC to have  a set percentage                                                              
of  the market  rate  index for  that class  of  borrowers.   That                                                              
change addresses  a desire expressed  by committee members  at the                                                              
April   10   meeting   that  different   loan   rates   apply   to                                                              
municipalities  and private  utilities.   This  change will  still                                                              
provide  a savings  for  all borrowers.   She  added  that if  the                                                              
market rate  index for  private utilities  was eight percent,  the                                                              
fund would charge them 75 percent of that market rate index.                                                                    
                                                                                                                                
SENATOR TAYLOR  moved to  adopt the CS  as the working  version of                                                              
the committee.  There being no objection, the motion carried.                                                                   
                                                                                                                                
There  being no  further testimony  or  questions, SENATOR  TAYLOR                                                              
moved   SCS  CSHB   304(RES)   from  committee   with   individual                                                              
recommendations.  There being no objection, the motion carried.                                                                 
                                                                                                                                
             HB 432-BOARD OF STORAGE TANK ASSISTANCE                                                                        
                                                                                                                                
MS. LORALI MEIER, staff to the House  Resources Committee, sponsor                                                              
of HB 432, explained  the measure as follows.  HB  432 extends the                                                              
termination date of  the Board of Storage Tank  Assistance to 2003                                                              
and it expands the Board's authority.   The extension of the Board                                                              
is  necessary because  many  sites  are in  the  process of  being                                                              
cleaned up and  most underground storage tank  owners believe they                                                              
need the  Board to mediate  between themselves and  the Department                                                              
of Environmental Conservation (DEC).   The authority that is being                                                              
expanded is  not a binding authority,  it simply provides  a forum                                                              
for all involved parties to sit down  at the table.  It allows the                                                              
Board to review a dispute on a cleanup  decision.  When the Board,                                                              
DEC and  the tank  owner can  sit down  together  to focus on  the                                                              
final decision  letter, most  of the  issues are easily  remedied.                                                              
The fiscal note reflects the cost  of staff travel and the cost of                                                              
the executive administration.                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD  asked if the March  30, 1999 sunset date  in the                                                              
original legislation  had a one-year extension date  which is what                                                              
the Board is operating under now.                                                                                               
                                                                                                                                
MS. MEIER said that is correct.                                                                                                 
                                                                                                                                
CHAIRMAN  HALFORD  asked  who  requested   the  expansion  of  the                                                              
authority to non-profit entities.                                                                                               
                                                                                                                                
MS. MEIER replied that amendment  was introduced by Representative                                                              
Mulder  in  the House  Finance  Committee.   That  amendment  only                                                              
affects one non-profit entity which she believes is a church.                                                                   
                                                                                                                                
Number 475                                                                                                                      
                                                                                                                                
MR. JOHN BARNETT,  a private contractor serving in  a support role                                                              
to the  Board of  Storage Tank  Assistance, pointed  out that  the                                                              
Senate Resources  Committee proposed  changing the program  from a                                                              
grant program to a loan program last  year.  The Board rewrote its                                                              
regulations under  the new guidelines  and converted it to  a loan                                                              
program.  Those  regulations recently went into effect.   A number                                                              
of  sites have  applied  for loans.    The same  authorities  were                                                              
listed under the  loan statutes to provide for  appeals or dispute                                                              
mediation with  the Board of Storage  Tank Assistance.   Being the                                                              
first year  of the loan program,  tank owners have  requested that                                                              
the Board  be in place to  mediate eligible cost  disputes related                                                              
to  loans.   A number  of tank  owners have  received "no  further                                                              
action"  letters from  DEC and  they have  asked for  a forum  for                                                              
dispute resolution.  The tank owners  agreed to pay a registration                                                              
fee that should provide for the Board.                                                                                          
                                                                                                                                
SENATOR  TAYLOR  noted  the  amendment  made  on  the  House  side                                                              
provides for a grant, not a loan.                                                                                               
                                                                                                                                
MR. BARNETT explained that a few  non-profits were on the original                                                              
grant  list.   Under  the  revised eligibility  requirements  that                                                              
evolved out of SB 128, most organizations  became ineligible.  The                                                              
amendment allows  one non-profit to  remain in the  grant program.                                                              
A grant program  still exists but  it is limited to  entities with                                                              
assets  of under  $1 million.   Originally  there  were about  300                                                              
applicants on the grant list; now there are about 60.                                                                           
                                                                                                                                
CHAIRMAN HALFORD  asked at  what point in  time this  program will                                                              
cease.                                                                                                                          
                                                                                                                                
MR. BARNETT said  the total demand went from about  $50 million to                                                              
under $10 million.   The program received about $5  million in the                                                              
capital budget last  year so the list is short and  the program is                                                              
close to  finishing.   The upgrade  and closure  program has  been                                                              
completed at this time.  The only  projects underway are clean-ups                                                              
and they take some time.                                                                                                        
                                                                                                                                
CHAIRMAN  HALFORD asked  if  any  one is  getting  State money  to                                                              
upgrade private tanks.                                                                                                          
                                                                                                                                
Number 696                                                                                                                      
                                                                                                                                
MR. BARNETT said  two names remain on the list and  will be funded                                                              
this  year.   They  were eligible  under  the revised  eligibility                                                              
requirements.                                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD asked for a copy of the list.                                                                                  
                                                                                                                                
MR. BARNETT replied that since the  regulations were signed only a                                                              
few days  ago, he  does not  have a  finite list  of all  entities                                                              
still applying  for loans.   He said  two facilities on  the Kenai                                                              
Peninsula owned by the same entity  are awaiting final upgrade and                                                              
closure grants.   He  noted that those  facilities have  been shut                                                              
down because of contamination so the owner has no cash flow.                                                                    
                                                                                                                                
CHAIRMAN  HALFORD remarked  their  total net  worth  is less  than                                                              
$250,000 and that is the last of the grants.                                                                                    
                                                                                                                                
MR. BARNETT said that is correct.                                                                                               
                                                                                                                                
CHAIRMAN  HALFORD asked  if the  next set  of grants  will be  for                                                              
clean-up.                                                                                                                       
                                                                                                                                
MR. BARNETT said that is correct.                                                                                               
                                                                                                                                
CHAIRMAN  HALFORD asked  if DEC  also  has a  tank clean-up  grant                                                              
program.                                                                                                                        
                                                                                                                                
MR. JIM HAYDEN, DEC, provided Chairman  Halford with a list of the                                                              
names of the grantees.                                                                                                          
                                                                                                                                
CHAIRMAN  HALFORD  asked if  the  House  amendment adds  only  one                                                              
applicant.                                                                                                                      
                                                                                                                                
MR. BARNETT said yes and that applicant  was on the list for years                                                              
but  would  have  been removed  because  of  the  new  eligibility                                                              
requirements.                                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD asked what amount the grant will be for.                                                                       
                                                                                                                                
MR. BARNETT answered the amount will be $7,000.                                                                                 
                                                                                                                                
There  being  no  further testimony,  SENATOR  MACKIE  moved  CSHB
432(FIN) from committee with individual recommendations.                                                                        
                                                                                                                                
SENATOR TAYLOR said,  "My only concern is that we  may be entering                                                              
into  something that  looks like  it's  just special  legislation,                                                              
something  that we  may  be criticized  for,  and I  want to  make                                                              
certain that we're not being - moving  half the bill at this point                                                              
when it's  just to provide  a $7,000 grant  to one individual.   I                                                              
realize it's a diminimus amount but  I'm not concerned about that.                                                              
I'm just concerned about the legal aspects of it."                                                                              
                                                                                                                                
CHAIRMAN  HALFORD stated  he  would hold  the  bill while  Senator                                                              
Taylor looks into that matter.                                                                                                  
                                                                                                                                
                 SB 308-MARINE PASSENGER VESSELS                                                                            
                                                                                                                                
CHAIRMAN HALFORD  informed committee members  that SB 308  is very                                                              
similar  to,   if  not  identical   to,  HB  371,   introduced  by                                                              
Representative  Kerttula.   He asked  Representative Kerttula  and                                                              
Ms. Lucky present the bill.                                                                                                     
                                                                                                                                
REPRESENTATIVE BETH KERTTULA, District  3, said as a resident of a                                                              
community that is affected by the  cruise ship industry she thanks                                                              
the committee for introducing the  legislation. She sees SB 308 as                                                              
a  small but  very important  step for  the State.   SB  308 is  a                                                              
right- to-know bill.                                                                                                            
                                                                                                                                
REPRESENTATIVE KERTTULA said she  introduced the House legislation                                                              
because last December she attended  a meeting with the cruise ship                                                              
industry,  community   representatives,  and  DEC   officials  and                                                              
learned  that  there   are  very  large  gaps   in  the  reporting                                                              
requirements  on this  industry.   SB  308 does  three things:  it                                                              
requires  companies to  register in  Alaska; it  requires them  to                                                              
gather information about air and  water emissions; and it requires                                                              
them  to report  that  information  to the  State.    It does  not                                                              
require  any additional  permitting.  Penalties  would be  imposed                                                              
only if  reports are  lacking or  false.  Representative  Kerttula                                                              
remarked  that she cannot  think  of any other  industry that  has                                                              
such an  impact on communities  in the  State and profits  heavily                                                              
that is not  required to provide  information of this type.   This                                                              
industry operates  under foreign  flags which  causes some  of the                                                              
problems that  she tried  to address  in the registration  system.                                                              
Industry   members   have   been  meeting   with   Department   of                                                              
Environmental Conservation  (DEC) officials  in an effort  to come                                                              
up with  ways to  go forward  with reporting  compliance and  have                                                              
made headway, but the astonishing  fact is that large gaps  remain                                                              
in which  DEC simply does not  know what the cruise  ship industry                                                              
is doing.   SB 308  will fill that  hole and provide  information.                                                              
If the  State finds from the  information that no  problems exist,                                                              
both parties will be on a level playing field.                                                                                  
                                                                                                                                
REPRESENTATIVE  KERTTULA pointed out  that the General  Accounting                                                              
Office  (GAO)  recently  issued a  report  and  the  Environmental                                                              
Protection  Agency (EPA) has  announced that  it is taking  cruise                                                              
ship emission problems  very seriously.  Although  it appears that                                                              
all agencies  are moving in  the same direction,  this legislation                                                              
provides an  Alaskan solution  and can  be enacted before  federal                                                              
statutes  are put in  place that  may preempt  Alaska.   She asked                                                              
committee members  to consider  a change to  the legislation.   SB
308 asks the  industry to report  a type of emission; it  has been                                                              
suggested  to  her  that  the bill  ask  for  information  on  the                                                              
composition of the waste stream instead.                                                                                        
                                                                                                                                
Number 1197                                                                                                                     
                                                                                                                                
SENATOR TAYLOR asked if any of the  ports in Southeast Alaska have                                                              
pumping stations for the cruise ships.                                                                                          
                                                                                                                                
REPRESENTATIVE  KERTTULA said  she does  not believe  so but  that                                                              
possibility  is  being discussed.    She  added the  bill  exempts                                                              
vessels from the  reporting requirements that are  not off-loading                                                              
or emitting.                                                                                                                    
                                                                                                                                
MR.  MIKE CONWAY,  DEC,  verified  that  no pumping  stations  for                                                              
cruise ships  exist in Southeast  Alaska as most  treatment plants                                                              
in Southeast are not designed for those volumes.                                                                                
                                                                                                                                
CHAIRMAN  HALFORD commented  that he  has heard  that most  cruise                                                              
ships have better  treatment systems than some  of the communities                                                              
they would off-load to.                                                                                                         
                                                                                                                                
SENATOR TAYLOR  asked, if that is  so, how the cruise  ships would                                                              
be violating  the Clean  Water Act  by discharging emissions  that                                                              
are cleaner.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KERTTULA  said  the   lack  of  information  about                                                              
exactly what is being discharged  is part of the problem.  She was                                                              
told  that  some  of  the  ships'  systems  are  better  than  the                                                              
communities' but the State does not  have the baseline information                                                              
to determine whether that is true.   She said once the information                                                              
is  received, many  arguments may  simply  come off  of the  table                                                              
because the communities will know the facts.                                                                                    
                                                                                                                                
Number 1303                                                                                                                     
                                                                                                                                
CHAIRMAN HALFORD asked  if a large passenger vessel  is defined as                                                              
over 300 tons.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  KERTTULA indicated  the definition  is on  page 6,                                                              
line  20.   She noted  the definition  was recrafted  a couple  of                                                              
times.  A  large passenger vessel  is defined as one of  300 gross                                                              
registered  tons or greater,  engaged in  carrying passengers  for                                                              
hire,   excluding    vessels   without    berths   or    overnight                                                              
accommodations  and non-commercial  vessels, warships,  or vessels                                                              
operated by  the State.  This  definition was tailored  to include                                                              
truly large  ships involved  in passenger trade.    She  has since                                                              
received  correspondence  from some  vessel  owners who  suggested                                                              
focussing  on passengers  rather than  weight, but  she based  the                                                              
definition  on Coast Guard  regulations.   State vessels,  foreign                                                              
government vessels and warships are excluded.                                                                                   
                                                                                                                                
CHAIRMAN  HALFORD said  he  knows the  intent  of the  bill is  to                                                              
target the cruise ships, but he questioned  why a lower weight was                                                              
not used so that 100 percent of the cruise ships are included.                                                                  
                                                                                                                                
Number 1416                                                                                                                     
                                                                                                                                
MR.  CONWAY  responded that  the  working  group's intent  was  to                                                              
exclude the day boats because they generate much less waste.                                                                    
                                                                                                                                
CHAIRMAN  HALFORD said  he was  just wondering  what the  standard                                                              
below  the  Coast  Guard's  is  because  the  Committee  discussed                                                              
another bill and  learned that 300 tons depends  on design factors                                                              
such as accommodations, how decks are set up and other things.                                                                  
                                                                                                                                
MR. CONWAY said,  as a retired Coast Guard Marine  Safety Officer,                                                              
he  is  familiar with  that  issue  but  regarding this  bill  the                                                              
working group was concerned with passengers and their routines.                                                                 
                                                                                                                                
CHAIRMAN  HALFORD  remarked that  the  300  ton weight  limit  was                                                              
increased to 400 tons in another  bill but, in this case, there is                                                              
nothing in  the cruise traffic that  low because a 1,000  ton ship                                                              
is still a fairly small cruise ship.                                                                                            
                                                                                                                                
REPRESENTATIVE KERTTULA agreed and  pointed out the tonnage of the                                                              
big cruise ships is in the range of 30,000 tons.                                                                                
                                                                                                                                
Number 1527                                                                                                                     
                                                                                                                                
SENATOR TAYLOR asked  whether a pump station is used  by the State                                                              
ferries.                                                                                                                        
                                                                                                                                
CAPTAIN  GEORGE  CAPACCI, General  Manager  of the  Alaska  Marine                                                              
Highway  System, informed  committee members  that the vessels  of                                                              
the Alaska Marine Highway System  have treatment systems on board,                                                              
therefore  the ferries  do not  pump offshore.  Those systems  are                                                              
inspected regularly.                                                                                                            
                                                                                                                                
CHAIRMAN HALFORD noted that because  the Marine Highway is a State                                                              
entity, the information is readily available.                                                                                   
                                                                                                                                
SENATOR   MACKIE  asked   how  the   emission   standards  for   a                                                              
municipality compare to those of a cruise ship.                                                                                 
                                                                                                                                
CAPTAIN CAPACCI  said from what  he understands the  effluent that                                                              
is pumped  out around  the neighborhoods  is not  treated at  all.                                                              
The effluent from  the Marine Highway system is  treated and meets                                                              
all federal standards.                                                                                                          
                                                                                                                                
SENATOR LINCOLN noted  the penalty in the bill is  $50 per day for                                                              
each day  of non-compliance, which  does not provide  an incentive                                                              
to comply.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  KERTTULA agreed  the penalty  is minimal  but said                                                              
because  it is  an administrative  one,  it  can be  put in  place                                                              
easily.  Another section of the bill  places in the DEC statutes a                                                              
provision  regarding civil  liability.   Those penalties  could be                                                              
much  higher and  include compensation  for environmental  damage.                                                              
The fine could be $10,000 per day  with a civil penalty of $500 to                                                              
$100,000.                                                                                                                       
                                                                                                                                
SENATOR  LINCOLN  asked if  $50  is  the  standard amount  for  an                                                              
administrative  penalty  and whether  the  other  penalties are  a                                                              
significant amount.                                                                                                             
                                                                                                                                
REPRESENTATIVE  KERTTULA replied  it is  more than  the State  has                                                              
now.  The  companies have been  fined amounts in the  millions; in                                                              
1994, the  total amount  in Alaska  was $6.5  million.   She noted                                                              
that although the  penalty is not huge it is better  than what the                                                              
State has now.                                                                                                                  
                                                                                                                                
Number 1718                                                                                                                     
                                                                                                                                
SENATOR  LINCOLN asked  if  the main  purpose  of the  bill is  to                                                              
provide baseline  information from  which the State  can determine                                                              
whether to assess penalties.                                                                                                    
                                                                                                                                
REPRESENTATIVE KERTTULA  said that is  correct but added  she does                                                              
not believe the penalties are the  most important part of the bill                                                              
to  her or  the communities.   They  are more  concerned that  the                                                              
cruise industry is  paying attention and the bill  is an effort to                                                              
continue  the industry's  cooperation with  DEC and  to point  out                                                              
that the  Legislature takes this  seriously.  When  necessary, the                                                              
State would seek penalties but that  is not the focus of the bill.                                                              
                                                                                                                                
MR. CONWAY asked to qualify a statement  made earlier.  He pointed                                                              
out  that  communities  in  Southeast  Alaska  must  have  primary                                                              
treatment so  they are not  discharging directly.   The facilities                                                              
are  permitted, so  DEC has  data on  the quality  of the  primary                                                              
treatment.  He stated that some Southeast  Alaska communities have                                                              
waivers  for secondary  treatment  because of  the  expense.   DEC                                                              
knows the  quality of the discharge  in those communities.   Black                                                              
water,  or  sewage,  is treated  with  marine  sanitation  devices                                                              
(MSD).  MSDs  use  1970's  technology  so  when  the  Coast  Guard                                                              
inspects  them, it is  not looking  at the  quality.  The  working                                                              
group is  seeking information to  determine the quality  from MSDs                                                              
and whether a problem exists.  Through  the working group process,                                                              
the industry has begun to cooperate.                                                                                            
                                                                                                                                
SENATOR MACKIE  asked if industry  officials have provided  all of                                                              
the requested information.                                                                                                      
                                                                                                                                
MR. CONWAY  said the group  is working on  that and by  mid-May it                                                              
should have agreements  made on what information  will be gathered                                                              
and provided.   This will be  a cooperative effort with  the Coast                                                              
Guard so, being  the lead agency  for the ships, it has  taken the                                                              
lead on water  discharge.  The  cruise ship industry claims  it is                                                              
in compliance  with  all requirements  and that  it is willing  to                                                              
provide  information so  the Coast  Guard should  have its  report                                                              
completed in the next month.                                                                                                    
                                                                                                                                
CHAIRMAN HALFORD  commented that  the number of  people on  any of                                                              
the bigger  ships equals  the size of  the fifth or  sixth largest                                                              
community in Southeast.                                                                                                         
                                                                                                                                
MR.  ROBERT  REGES,   an  environmental  attorney,   said  he  was                                                              
testifying  in favor of  SB 308 on  his own  behalf.  He  informed                                                              
committee members  he is a member  of a non-profit  corporation of                                                              
citizens named Cruise Control that  advocates responsible tourism.                                                              
SB 308 does  two things: it  levels the playing field  with Alaska                                                              
based businesses and other foreign  businesses that come to Alaska                                                              
to do work and it contains "show me" provisions.                                                                                
                                                                                                                                
Regarding  the registration  requirement of  the first section  of                                                              
the bill,  MR. REGES  said it is  balanced by  the penalty  of not                                                              
being able to use Alaska's courts.   The Legislature has similarly                                                              
required other businesses, such as  banks, insurance companies and                                                              
other companies  that come  to Alaska to  do business  to register                                                              
and  get bonded  and  insured.   If a  company  is not  registered                                                              
first, it  cannot avail  itself of Alaska's  courts.  As  a former                                                              
employee of  the Department  of Law, he  recounted one  of several                                                              
bad experiences with  cruise vessels.  DEC's one  standard for air                                                              
emissions from cruise vessels was  regularly violated.  One of the                                                              
violators owed  the State  a substantial  amount in penalties  and                                                              
did not comply  with provisions in a memorandum  of agreement that                                                              
it signed.  When the Department of  Law tried to bring the company                                                              
to court, it  could not get a  hold of them.  The  company's Miami                                                              
office  had closed  and  it had  no other  American-based  office.                                                              
Essentially,  the  Department  of   Law  was  trying  to  bring  a                                                              
Panamanian corporation  with a Monrovian flag to  Alaska's courts.                                                              
The Department  of Law  would not  have succeeded  except for  the                                                              
fact that the  company filed for bankruptcy so  the Department was                                                              
able to serve its bankruptcy lawyer  in New York.  Similarly, when                                                              
the State went  to sue Royal Caribbean,  it had to go  to Florida.                                                              
The leveling of the playing field  provision simply asks that if a                                                              
company is  coming to Alaska  to do business,  it give  Alaska the                                                              
name  of an  agent  for  service of  process.   That  practice  is                                                              
required of many other businesses.                                                                                              
                                                                                                                                
MR. REGES  explained that  the "show  me" provisions will  require                                                              
the cruise  ship companies  to show  compliance.  Those  companies                                                              
have been saying  for the past six months that  they are complying                                                              
but they have not brought forth anything  to the DEC working group                                                              
that  shows compliance.   The  Alaska-based entities  must file  a                                                              
monthly report.   SB  308 asks the  cruise ships  to do  the same.                                                              
The "show  me" provisions  are broken down  into two parts:   off-                                                              
loading and  releases.  When  waste is taken  off of a  vessel and                                                              
put into a  controlled treatment storage or disposal  facility, it                                                              
has  been off-loaded.   Vessels  do not  typically off-load  their                                                              
aqueous wastes  but they  do off-load their  food waste.   Much of                                                              
the food waste is incinerated in  Juneau.  Coast Guard regulations                                                              
prohibit food  waste from  boats that  have been in  international                                                              
waters  from being  land filled.   The  section of  the bill  that                                                              
pertains  to off-loading  requires companies  to report where  and                                                              
when  waste  was off-loaded  so  that  it  can  be tracked.    The                                                              
released wastes  do not go into  a controlled facility.   They get                                                              
discharged into the air or on to the shore.                                                                                     
                                                                                                                                
In response  to an earlier question  by Senator Mackie,  MR. REGES                                                              
said the  industry has  not given  DEC all  of the information  it                                                              
requested.    The  industry  would   like  to  come  forward  with                                                              
information  but  government  agencies  can penalize  them.    For                                                              
instance,  a vessel cannot  go into  Glacier Bay  unless it  has a                                                              
device called a  continuous opacity monitor which  reads the smoke                                                              
that goes  up the stack.   From that record, a  trained technician                                                              
can tell  whether the ship is  in compliance with the  State's air                                                              
quality standards.   DEC and the working group want  that data for                                                              
the  past  few  years,  not for  the  purpose  of  penalizing  any                                                              
company, but  to help develop  best available control  technology.                                                              
Those records  may show  what type of  fuel burns the  cleanest or                                                              
what nozzles  work best.   The companies  said they would  provide                                                              
that  information if  they are  not  penalized but  EPA would  not                                                              
agree  to the  enforcement  shield,  so  no information  has  been                                                              
provided.                                                                                                                       
                                                                                                                                
MR. REGES said the key point of SB  308 is that it does not impose                                                              
any  performance   standards,  it  simply  requires   cruise  ship                                                              
companies to tell the State what it is doing.                                                                                   
                                                                                                                                
CHAIRMAN HALFORD took teleconference testimony.                                                                                 
                                                                                                                                
MR.  JOHN   HANSEN,  President  of   the  Northwest   Cruise  Ship                                                              
Association (NCA),  an association of nine cruise  ship lines that                                                              
operate  in the Pacific  Northwest, made  the following  comments.                                                              
SB 308 contains a lengthy list of  records and reports to be filed                                                              
by cruise ships.   The bill does  not state why the  collection of                                                              
certain data is  necessary and how it will be  analyzed.  Although                                                              
it is not stated  in the bill, the real objective of  SB 308 is to                                                              
protect Alaska's environment.  NCA  agrees with that objective and                                                              
is committed to protecting the high  quality of the environment in                                                              
Alaska.    In  most cases,  this  means  that  current  management                                                              
practices  aboard  ships  will  exceed  United  States  regulatory                                                              
requirements.    The  cruise  lines,   through  the  International                                                              
Council of Cruise Lines (ICCL), have  agreed to a voluntary set of                                                              
guidelines published  last December.  In addition,  the lines also                                                              
agreed to additional practices and  investments specific to Alaska                                                              
operations.  NCA members spent $1.3  million this year to purchase                                                              
18 oil  spill response barges to  be located in  Southeast Alaska.                                                              
NCA  members are  within days  of  signing an  agreement with  the                                                              
existing  oil  spill  response  organization  to  pool  resources,                                                              
including the barges.                                                                                                           
                                                                                                                                
MR.  HANSEN  clarified  that  NCA is  interested  in  a  voluntary                                                              
compliance  program  which would  be  highly consistent  with  the                                                              
sphere of Senator Pearce's bill,  SB 273.  He noted that the fleet                                                              
of cruise ships  operating in Alaska  is young.  Twelve  of the 22                                                              
ships are  less than five  years old and  four are brand  new this                                                              
year.   The  ships  contain MSDs  for  secondary  treatment.   NCA                                                              
understands the public's need to  be assured that the cruise ships                                                              
are exercising  responsible environmental  management and  it also                                                              
understands that  enforcement agencies  have the power  to enforce                                                              
under current law.                                                                                                              
                                                                                                                                
TAPE 00-27, SIDE B                                                                                                              
                                                                                                                                
MR.  HANSEN  said  with  that  in   mind,  NCA  entered  into  the                                                              
environmental  initiative  under  the leadership  of  Commissioner                                                              
Michelle Brown of  DEC.  The purpose of the initiative  is to gain                                                              
an understanding of  the waste management practices  used by ships                                                              
in Alaska  waters and to  address any environmental  problems that                                                              
may be identified.   Working groups have been  established to work                                                              
on  waste water  and  solid  waste, air  emissions,  environmental                                                              
leadership  and  oil  spill  response.     A  progress  report  is                                                              
scheduled  to  be completed  in  early  May.   NCA  supports  this                                                              
program  as  it provides  a  foundation  for problem  solving  and                                                              
policy  making.   It  sees this  process as  an  effective way  to                                                              
address  the  public  question  about  environmental  stewardship.                                                              
This  program  is  designed  to   be  cooperative  with  a  common                                                              
objective of  continuously implementing operational  improvements.                                                              
NCA believes that  neither SB 308 nor HB 371 are  entirely in step                                                              
with the initiative process underway.   DEC will determine whether                                                              
substantial  problems  exist and  find  possible  solutions.   The                                                              
current process  is working and should  be allowed to  continue to                                                              
its conclusion.  At that point it  will be possible to assess what                                                              
ongoing data and reporting requirements are needed.                                                                             
                                                                                                                                
Number 2279                                                                                                                     
                                                                                                                                
MR. GERSHON COHEN, a 20 year resident  of Southeast Alaska and the                                                              
National  Project  Director on  water  pollution  issues with  the                                                              
Earth Island Institute,  gave the following testimony.   SB 308 is                                                              
one of  several bills sponsored  in response  to the wake  up call                                                              
Southeast  residents received  last  summer when  they heard  that                                                              
cruise ships  were dumping toxic  waste into Alaskan waters.   For                                                              
the past nine months, cruise ship  representatives have proclaimed                                                              
their  intention  to  adhere to  all  applicable  pollution  laws,                                                              
however the  key word is "applicable."   The cruise  ship industry                                                              
is  well aware  that  it remains  exempt from  key  U.S. laws  and                                                              
regulations  that otherwise  govern the  discharge of human  waste                                                              
streams.   Because of  these exemptions,  the coastal states  must                                                              
take on the responsibility of monitoring  illegal ship wastes into                                                              
public  waters.   Similar  measures are  being  considered by  the                                                              
California  Legislature.     Despite  the  industry's   record  of                                                              
violations,  huge  gaps  in the  regulatory  process  will  permit                                                              
discharges to go unmonitored again  this season.  SB 308 will play                                                              
a critical role in closing the information gap.                                                                                 
                                                                                                                                
MR. COHEN  stated the average  cruise ship  in today's fleet  is a                                                              
floating city,  transporting more than 5,000 passengers  and crew.                                                              
A typical ship  generates approximately 1 million  gallons of gray                                                              
water  during  each  voyage, 210,000  gallons  of  raw,  untreated                                                              
sewage,  25,000  gallons  of  oily bilge  water,  110  gallons  of                                                              
photochemicals,  5 gallons of  dry cleaning  waste, 10  gallons of                                                              
paint, and  5 gallons of  expired chemicals.  Under  international                                                              
law, cruise  ships can  discharge gray  water tanks and  untreated                                                              
sewage  anywhere as long  as they  are not  tied to  a dock.   The                                                              
State  needs  to  identify  what is  being  discharged  and  which                                                              
systems  in  ships are  better  at  controlling pollution.    This                                                              
information  will help  establish a baseline  for future  planning                                                              
decisions.                                                                                                                      
                                                                                                                                
MR.  COHEN  maintained  that  one   of  the  industry's  goals  in                                                              
continuing the initiative process  is to develop a self monitoring                                                              
plan  that  it hopes  will  preempt  a  change  in Alaska  law  or                                                              
regulation.    Last  week  the  industry   finally  submitted  its                                                              
proposal.  Despite repeated, clear  and specific requests from the                                                              
working  group,  the industry's  proposal  missed  the  boat.   It                                                              
offered to  evaluate the waste streams  twice per ship  during the                                                              
entire  summer  for  only  sewage  parameters,  ignoring  concerns                                                              
expressed about the toxics pumped  into the gray water. At the end                                                              
of  the  last  meeting,  the  industry's  representative  verbally                                                              
agreed to a limited  amount of gray water testing  for toxics.  At                                                              
this rate, the  State will be lucky to have  a monitoring protocol                                                              
in place for the 2001 season.                                                                                                   
                                                                                                                                
MR. COHEN thought SB 308 and HB 371  clearly and fairly initiate a                                                              
process to get the cruise ship industry  to play by the same rules                                                              
as everyone  else who does business  in Alaska.  The  oil, mining,                                                              
seafood  processing  and timber  industries  are  all required  to                                                              
monitor  and  report   the  quantity  and  composition   of  their                                                              
wastewater  discharges  to either  a  state or  federal  oversight                                                              
agency every month.  These bills  simply demonstrate that both the                                                              
industry and the public have needs.   The industry needs Alaska as                                                              
a destination.  We hope they recognize  that without clean air and                                                              
water, Alaska  will no longer  be the  place it sells  to clients.                                                              
Alaskans need clean air and clean  water too, as well as an active                                                              
economy.   Fortunately,  these  needs are  not  incompatible.   No                                                              
legitimate  reason remains to  allow the  industry to continue  to                                                              
circumvent the monitoring and reporting  requirements performed by                                                              
all other  industries in  Alaska.  He  urged committee  members to                                                              
pass the bill out of committee today.                                                                                           
                                                                                                                                
CHAIRMAN  HALFORD thanked  all participants  for their  testimony.                                                              
He noted the  committee will revisit the legislation,  possibly at                                                              
the next meeting.  He then adjourned the meeting.                                                                               

Document Name Date/Time Subjects