Legislature(2001 - 2002)
01/25/2001 01:12 PM House TRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 55-OIL DISCH PREVENTION: NONTANK VESSELS/RR Number 2182 CHAIR KOHRING announced that the next item before the House Transportation Committee would be HOUSE BILL NO. 55, "An Act regarding oil discharge prevention and cleanup involving self- propelled nontank vessels exceeding 400 gross registered tonnage and railroad tank cars and related facilities and operations and requiring preparation and implementation of oil discharge contingency plans for those nontank vessels and railroad tank cars; amending the definition of 'response action' that relates to releases or threatened releases of oil and thereby amending the duties and liabilities of response action contractors; authorizing compliance verification for nontank vessels and for trains and related facilities and operations; and providing for an effective date." Number 2108 TOM RUETER, Northstar Maritime Agencies, came forward to testify. He said Northstar Maritime Agencies represents various foreign-flagged vessels operating in the state. He noted that SB 273, passed last session, had established a task force that worked over the summer. The shipping industry is diverse; with each of its different components having its own concerns, and the task force gave them a venue to air those concerns. "Hopefully," he said, "the final report that you see there is a consensus of that process." Some of the main concerns reflected [in the report] and voiced during the process were the need for simplicity, cost awareness, and expediency of plan review when HB 55 is finally adopted and the regulations following that are also adopted. He said the task force report is a consensus document, and he recommended, that "the intent of it be adopted in whole as legislative intent as this bill goes forward." Number 2060 CHAIR KOHRING said, "I keep hearing ... that the private sector supports this bill and that you guys came to the table and actually asked for this bill." He asked Mr. Rueter if that is truly how he feels, and if there is any pressure or duress involved. As a small businessman himself, he finds it hard to understand why a group would ask for more regulation, he said. MR. RUETER replied that SB 273 provided the requirement that a planning standard be established and adopted into statute. "This bill that's presented at this time is how that statute that's in force will be implemented," he said. He noted, "Through the task force process, many of the concerns of industry were aired, and, hopefully, addressed, and consensus reached, and that's reflected within the task force report." Number 1939 STEPHANIE MADSEN, Vice President, Pacific Seafood Processors Association, came forward to testify. She said she had been a member of the task force and co-chair of the Contingency Plan Subcommittee. She explained that the Pacific Seafood Processors Association is a membership organization of shore-side processors, and its involvement in this bill involves some of the larger catcher vessels that operate primarily in the Bering Sea as well as some "floater" operations that travel around the state, usually anchor within state waters, and process a series of different seafoods. In addition, the organization represents three mother-ship operations, processors with a fleet of catcher vessels that are all in excess of 400 gross tons. She said in total, she represents about seven vessels that will be regulated under HB 55. MS. MADSEN assured the committee that "industry, from our perspective, is supportive of the final result of the marine task force's recommendations." She said there had been concerns about the speed at which last year's legislation was moving, and about Pacific Seafood Processors being a round peg that might be forced to fit into a square hole. She said she thinks "we have now kind of softened those corners of the hole, and we can fit into the safety net." Number 1862 MS. MADSEN explained that the vessels she represents also enter Washington's waters, and there are similar regulations in that state. "As seafood processors, we rely on clean water and a healthy resource, so it is important to us to make sure that we don't have a Galapagos [oil spill] in the Aleutians," she testified. She indicated that she supports all of the prior testimony as well as Brian Rogers' recommendation "that the task force report is the package in total, and that it is very critical to us to have that intent letter attached to legislation, which gives us the comfort level that was necessary for us to support the moving of this legislation; because we understand what the details are, we understand what the rules are, and we were involved in helping formulate some of those to fit our unique operations." Number 1820 CHAIR KOHRING said he couldn't help but wonder if "the effort and the intent ... is to minimize competition from the smaller operators out there, ... if it's easier for the larger organizations to be involved and to be able to afford dealing with this kind of legislation." Number 1790 MS. MADSEN said her concern, as a task force member, was to make as many options as possible open to her members. She said there are primarily three ways in which one can comply with the regulations: join a co-op, join an umbrella organization called the Marine Exchange that would provide services, or do it oneself, an option that may be attractive to those who have a fleet. She did not recall competition coming into the discussion because the description indicates a certain size of vessel, which may lead to a certain size of operation. She said she thinks the task force was looking at making sure that there was not just one method of compliance, that there was an appropriate time schedule for compliance, and that there were reasonable expectations. She said she believes that the task force accomplished all those goals. Number 1693 REPRESENTATIVE WILSON asked if there is an existing umbrella entity or if one would have to be developed. MS. MADSEN informed the committee that one is being developed in the private sector right now. It is called the Marine Exchange, and several of the task force members (herself included) are currently on the board of directors of the new organization. She expressed her desire to ensure that it is an option for those vessels that would like to comply. She predicted that vessels that do not operate in the state of Alaska on a regular basis will need someone to call to have "some of this paperwork done" prior to their entering Alaska's waters; this umbrella organization would do that. "I also think that the current co- ops will provide spill response, but they don't provide your incident command services, so you would either need to provide those or contract out," she remarked. "I think this umbrella organization that's being developed would have a list of menu items that you could sign up for, depending on your specific circumstances, and the goal would be ... [to] keep those costs low for the members." Number 1626 REPRESENTATIVE WILSON asked about the cost of the services. MS. MADSEN replied, "That's the chicken and the egg." She recalled that last year, costs had been a big concern, and that she has been asked why she is not concerned about costs this year. It is becoming apparent that there will be enough vessels involved to bring down the costs. She said she could not quote an exact cost, but it probably would be less than the current co-ops are now charging associate members. Number 1565 JEFF THOMPSON, Alaska Maritime Agencies, said he also is a member of the Board of the Marine Exchange and was co-chair with Ms. Madsen of the task force's Contingency Plan Subcommittee. Although an industry is never enthusiastic about increased costs of operation, it was obvious to the industry that extension of oil-spill contingency planning to the nontank vessel community was inevitable. He echoed Ms. Madsen's recommendation that the task force report "be kept whole and intact as it wends its way through this legislative process." He emphasized that the report should not be excerpted or diluted, and said he thought any attempt at that "would go against the intent and the consensual spirit in which that document was produced." Number 1468 CHAIR KOHRING expressed appreciation for the effort that went into the document and said the legislature wants to achieve the same goal, which is to assure safe operation. He asked if there was an alternative to setting up 37 pages of regulations or if it would be possible to put together something simpler, such as increasing fines so that operators have an incentive not to spill [oil]. Number 1327 MR. THOMPSON referred to the task force process and said: A lot of us were educated as to the intricacies of international law when it comes to marine insurance and how that plays out when there is an oil spill. Along with the commercial and business implications, there is federal law with which the industry must remain consistent. At this point, I don't see how increasing fines or other possible punitive efforts might address that, because it stems from the liability of the responsible party, the owner of the vessel. CHAIR KOHRING noted the presence of Senator Pearce, sponsor of SB 273 in the previous legislative session. Number 1202 JOE LEBEAU, Alaska Center for the Environment, testified by teleconference. He thanked the members of the task force, saying that industry spent a tremendous amount of money coming together for the meetings and worked very hard to improve the capacity for spill response in Western Alaska. He noted that although he would like to see more regulation of the Alaska Railroad pertaining to hazardous substances, he is more than happy the railroad is going to be regulated for oil spill prevention and contingency planning. Number 1115 REPRESENTATIVE OGAN asked if there was any force of law behind the legislature's letter of intent that would affect the administration's implementation of regulations. BRECK TOSTEVIN, Assistant Attorney General, Environmental Section, Civil Division (Anchorage), Department of Law, testified by teleconference. He explained that a letter of intent expresses the intention of the legislature in adopting a statute. When an administrative agency adopts regulations, it must do so in keeping with the intent of the legislature and the wording of the statute. Yes, a letter of intent is an important consideration in determining whether a regulation is consistent with statute. Number 1020 REPRESENTATIVE OGAN said his perspective, as a legislator, is that the administration often exceeds the legislative intent with regulations. He asked if there would be a way to put the letter of intent in the statute or say that the department may only write regulations based upon the recommendations of the task force. Would that have a greater force of law? MR. TOSTEVIN answered that he didn't know if it would have any greater force of law. When the Department of Law reviews an agency's regulations, one of the things the regulations attorney does is determine whether the regulations are consistent with the statutes as adopted by the legislature. Once the regulations are in place, there are provisions for people to challenge regulations as being inconsistent with statute. CHAIR KOHRING informed the committee that the legislative intent to which Representative Ogan was referring was on page 38 of the Task Force on Motorized Oil Transport Final Report distributed at the past Tuesday's meeting. Number 0843 REPRESENTATIVE OGAN respectfully disagreed with Mr. Tostevin in that letters of intent often aren't worth the paper they are written on. Acknowledging that there are conscientious people in the administration who do their best, he said he thinks they have a different philosophy than the legislature. Those who work for the administration are not held accountable by voters for their actions. He thinks those who work for the administrative agencies generally write regulations that are too extensive. CHAIR KOHRING echoed Representative Ogan's concerns, saying it had been his experience on the House Finance Committee that letters of intent were often disregarded. He thought it might be better to put the intent in the legislation. He then noted that he had spoken in error earlier about the length of the bill. The task force report is 30-plus pages long; the legislation itself is just six pages. Number 0715 BRIAN ROGERS, Information Insights, Inc., testifying by teleconference, identified himself as facilitator for the task force report. He explained some of the reasons the industry would seek this type of regulation. Sections 1 and 2 of the bill deal with liability limits and ensure that the same kind of references apply to both the tank and nontank vessels. The most important provision from a private-sector standpoint is probably Section 4, which limits the liability of any organization providing incident management team services or response plan facilitator services. That is important to industry because last year's law already subjects industry to financial responsibility, and prior law provides for fines for spillers. It is to the industry's economic advantage to try to avoid those fines by not spilling oil. Limiting the liability [creates an incentive] for the industry to keep a spill from becoming worse. MR. ROGERS continued, explaining that Section 5 of the bill means that the nontank community can rely on precedents that have already been set with the tank community. He also said that Section 6 makes it clear that vessels engaged in innocent passage through Alaska waters are not required to comply with the nontank legislation (because requiring that is prohibited under federal treaty). So, he concluded, there are some provisions that work to the advantage of the community that is subject to fines and financial responsibility. Number 0462 LARRY DIETRICH, Director, Division of Spill Prevention and Response, Department of Environmental Conservation (DEC), came forward to testify. He said DEC can be put in a difficult position when laws are passed without the necessary research and analysis, resulting in language that is not precise and speaks in very broad terms that are hard to quantify in the rule making. How standards, levels, and thresholds are set is incredibly important. MR. DIETRICH said he was skeptical last year when the legislature referred this subject to a task force, but it had proven to be very beneficial. He said he had not previously worked with such a diverse group and gotten to such a level of detail. "It takes the mystery out of the regulation promulgation when you can work with a group of people who have been given a clear mandate by the legislature and sit down and work out those details ahead of time," he said. The [task force] report is [DEC's] template, and what it says is what he intends to put into regulatory format. The department [DEC] participated in the [task force] process, which was a consensus process through which participants agreed how to define the implementation. He said this is precisely the kind of direction the agencies need in order to do the rule making. He expressed appreciation to the legislature for creating the task force and to the task force for providing the detail the agency needs. MR. DIETRICH added that it could be helpful to have a "shepherd" through the rule-making process. He suggested that a subgroup of the task force oversee the rule making, which could reassure those who are concerned. CHAIR KOHRING welcomed the suggestion. He also told Mr. Dietrich that DEC is the agency that those in the legislature "love to hate the most." TAPE 01-6, SIDE A Number 0029 REPRESENTATIVE OGAN said Mr. Dietrich had made a good point in that legislators must be careful that the language they put in a bill gives clear direction to the executive branch concerning legislative intent. Too often, especially late in the session when legislation is moving quickly, the language may not be as clear [as it should be], he acknowledged. "It's easy for us to beat up the executive branch when we may not be doing a good job of drafting," he added. Number 0093 MR. DIETRICH acknowledged that there have been struggles over the years over the whole regulation process and the oversight. Bringing industry to the table prior to the drafting [of HB 55] has been very successful. Therefore, he related his belief that it is a good model for people to refer to in the future. CHAIR KOHRING asked what is being done by other agencies and the federal government. He wondered if the Coast Guard has jurisdiction over ships transporting fuel products and requirements concerning spills. Chair Kohring explained that his question was drawn from his concern "that we're not doing something with this task force that is duplicating any other effort, or doing something that we shouldn't be doing." MR. DIETRICH assured him that the task force had looked into that. The class of vessels affected is not currently regulated under the [federal] Oil Pollution Act contingency plan's cleanup and response-planning provisions. Although a bill was introduced at the last session of Congress to regulate nontank vessels, it has not yet been enacted. He said there is a dramatic difference between the proposed federal requirements and the package the task force has tried to tailor to Alaska's unique needs. Number 0313 CHAIR KOHRING noted that there was a third-of-a-million-dollar annual expenditure involved, and he was glad it was not going to come from the general fund. This expenditure will be paid from the Oil Spill Contingency Fund, which is derived from a three- cent-per-barrel tax on oil that flows through the Trans-Alaska Pipeline. The money is used in a variety of programs dealing with oil spills and cleanup, including underground storage tank remediation. He wondered if passage of HB 55 might significantly hamper the funding of the other programs. MR. DIETRICH called attention to information in the committee packets that included the official Department of Revenue forecasts for revenue production from that pipeline tax through the year 2010. He noted that a general decline in revenue is expected due to the continuing depletion of major oil deposits. Number 0516 CHAIR KOHRING voiced concern that taking out a third of a million dollars a year would make it hard to engage in other cleanup activities in the state. MR. DIETRICH said that had been taken into consideration in the fiscal note by keeping the cost pared down to $141,000 per year. Number 0565 CHAIR KOHRING asked the committee to keep in mind that if they pass this bill, the Oil Spill Contingency Fund is going to "take a hit" and result in monies being taken out of the other areas, not that it couldn't be made up, and perhaps that's an issue the House Finance Committee could address. He informed the committee that he has drafted a memo to the House Finance Committee to alert them that if HB 55 is passed from this committee, they will need to address that issue. Number 0565 CHAIR KOHRING recalled reading that there will be approximately 700 ships affected by this program, and asked if that number is correct. MR. DIETRICH said the best estimate is based on the number of applications received to meet the financial responsibility portion of SB 273, which took effect in September. About 500 applications, which together account for about 900 vessels, have been received. Number 0716 CHAIR KOHRING asked what HB 55 means in terms of giving DEC authority to promulgate regulations. He also asked how the legislature could be assured that [the resulting regulations] are not going to end up "spinning a bit out of control" and resulting in something more than the legislature thought it was bargaining for. He noted that Representative Ogan is working on an amendment to address that issue, and said [the draft amendment] will be shared with Mr. Dietrich and the committee before the next meeting. The amendment includes the intent in the legislation itself, rather than in a separate letter of intent. Number 0777 REPRESENTATIVE KOOKESH expressed concern about the amount of time the chair is taking with HB 55, and said he would like to see any amendments shared with the task force in time for them to have input. CHAIR KOHRING assured Representative Kookesh that the task force would receive any amendments and have a chance to review them. He explained that he had received the draft amendment just before the meeting and only glanced at it. He said his support is in concept only, and thus he expressed the need to read the amendment's wording and think it through. CHAIR KOHRING noted that the committee is discussing a substantial piece of legislation that has been in preparation for a couple of years. "I don't think there's any need to rush this process," he said, noting that the committee first heard HB 55 two days ago. He pointed out that he did not want to impose something that is a detriment to the shipping industry, despite the fact that there seems to be consensus. "I have to ask myself, 'Why are we being pressured to move this thing so quick?' That in itself has raised a bit of a red flag in my mind," he remarked. He said as chair, he would prefer to take a rather slow approach and make certain that all are comfortable before passing HB 55 out of committee. REPRESENTATIVE KOOKESH reminded him, "We are here because of legislation that was passed last session [SB 273]. ... It was 39 votes in favor of it in the House, and the Senate passed it overwhelmingly, and that's why we're here. We're following up on that legislation." He said he doesn't have "any dog in the fight," but just wants to see something [enacted] that the greater minds of Alaska sat down and put together. The time and effort they put into it is worth something, he emphasized. CHAIR KOHRING said as a matter of respect to those who put so much into [the task force report], the committee should take time to look at HB 55 carefully and understand it fully before taking final action. Number 0985 PAUL FUHS, Marine Technical Consultant to the task force, noted that discussion keeps returning to the issue of why industry is interested in expediting the passage of HB 55. He testified: If your concern is about the heavy hand of regulation of government on business, you already did that last year, and you all voted for it [SB 273], every single one. So now ... the industry has come back and said, 'We need these tools, we need these limits on liability.... ' It is a cost factor. Without these [limits], the co-ops couldn't form to provide these services in a cost-effective way. But beyond that, especially for the tramper vessels, the spot-charter vessels that come on a one-time basis to pick up iron ore, timber, or fish, they just physically couldn't operate with the bill you passed last year without these ... response plan facilitator services, incident management team services, ... unless a vessel agency or the Marine Exchange was holding a generic contingency plan that they could sign on to. They are not going to do that if some third party can come in and sue them for acting in good faith to react to an oil spill without these limitations of liability, and that's what this six- page bill is. It's not the requirements of heavy regulation of industry. You already passed [that]. This is the way industry can do it cost-effectively. That's why you're seeing all the letters of support and all the testimony. So I hope that helps explain some of the urgency of the industry ... for the protections [provided by HB 55].... CHAIR KOHRING announced that the next meeting would be a joint one with the Senate. [HB 55 was held over.]
| Document Name | Date/Time | Subjects |
|---|