02/17/2020 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB145 | |
| SB70 | |
| Presentation: Spill Prevention and Response (spar) Program by the Department of Environmental Conservation | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 145 | TELECONFERENCED | |
| += | SB 70 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 17, 2020
3:30 p.m.
MEMBERS PRESENT
Senator Peter Micciche, Chair
Senator John Coghill, Vice Chair
Senator Click Bishop
Senator Cathy Giessel
Senator Joshua Revak
Senator Scott Kawasaki
Senator Jesse Kiehl
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 145
"An Act relating to the registration of commercial fishing
vessels; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 70
"An Act repealing the ocean rangers program; and providing for
an effective date."
- HEARD & HELD
PRESENTATION: SPILL PREVENTION AND RESPONSE (SPAR) PROGRAM BY
THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 145
SHORT TITLE: REGISTRATION OF BOATS: EXEMPTION
SPONSOR(s): SENATOR(s) MICCICHE
01/21/20 (S) PREFILE RELEASED 1/17/20
01/21/20 (S) READ THE FIRST TIME - REFERRALS
01/21/20 (S) RES, FIN
02/14/20 (S) RES AT 3:30 PM BUTROVICH 205
02/14/20 (S) Heard & Held
02/14/20 (S) MINUTE(RES)
02/17/20 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 70
SHORT TITLE: REPEAL OCEAN POLLUTION MONITORS/FEE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/22/19 (S) READ THE FIRST TIME - REFERRALS
02/22/19 (S) RES, FIN
03/13/19 (S) RES AT 3:30 PM BUTROVICH 205
03/13/19 (S) Heard & Held
03/13/19 (S) MINUTE(RES)
03/18/19 (S) RES AT 3:30 PM BUTROVICH 205
03/18/19 (S) -- MEETING CANCELED --
02/17/20 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JASON BRUNE, Commissioner
Alaska Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint on SB 70 relating to
Cruise Ship Environmental Monitoring.
EMMA POKON, Deputy Commissioner
Department of Environmental Conservation (DEC)
Juneau, Alaska
POSITION STATEMENT: Answered questions and reviewed the
sectional analysis for the proposed committee substitute (CS)
for SB 70, version U.
DENISE KOCH, Director
Spill Prevention and Response
Department of Environmental Conservation
Juneau, Alaska
POSITION STATEMENT: Delivered a PowerPoint on the Spill
Prevention and Response (SPAR) program.
ACTION NARRATIVE
3:30:23 PM
CHAIR PETER MICCICHE called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Revak, Bishop, Kawasaki, Kiehl, Coghill,
Giessel and Chair Micciche.
SB 145-REGISTRATION OF BOATS: EXEMPTION
3:30:54 PM
CHAIR MICCICHE announced that the first order of business would
be SENATE BILL NO. 145, "An Act relating to the registration of
commercial fishing vessels; and providing for an effective
date."
CHAIR MICCICHE said the committee previously heard a
presentation on SB 145 and took public testimony. He advised
that a committee substitute was prepared but it contains several
errors, so the committee will not take it up today. After
determining no one wished to testify, he informed members that
he will keep public testimony open on SB 145.
[SB 145 was held in committee.]
SB 70-REPEAL OCEAN POLLUTION MONITORS/FEE
3:32:58 PM
CHAIR MICCICHE announced the next order of business would be
SENATE BILL NO. 70, "An Act repealing the ocean rangers program;
and providing for an effective date."
CHAIR MICCICHE said the Department of Environmental Conservation
(DEC) has asked for a change to SB 70 and a committee substitute
was drafted. He solicited a motion.
3:33:30 PM
SENATOR COGHILL moved to adopt the committee substitute (CS) for
SB 70, work order 31-GS1117\U, as the working document.
CHAIR MICCICHE objected for discussion purposes.
3:34:01 PM
JASON BRUNE, Commissioner, Alaska Department of Environmental
Conservation (DEC), Juneau, Alaska, stated that the initial
draft of SB 70 eliminated the Ocean Ranger Program, whereas the
proposed committee substitute would reinvent it. He began a
PowerPoint on the cruise ship environmental monitoring program
that is proposed in the committee substitute.
COMMISIONER BRUNE said the goal is to modernize DEC's approach
to monitor cruise ship emissions and discharges, which was
modified by an initiative process 12 years ago. The program put
in statute significant specificity that normally is set by
regulation. The changes will incorporate a number of
recommendations the department received from legislators and the
public. It will incorporate new technology and upgrade some
community wastewater discharge systems in communities visited by
the cruise industry.
COMMISIONER BRUNE reviewed slide 2, A Modernized Approach:
bright This bill clarifies that the cruise industry will
be regulated in a similar manner to other industries
bright Existing statutes limit DEC's ability to
effectively monitor cruise ship emissions and
discharges
bright This CS maintains DEC's current authority and
adds flexibility for how it is used.
COMMISIONER BRUNE reviewed slide 3, Current Program Challenges
and Inefficiencies:
bright There were typically 22 ocean rangers on vessels
throughout a summer season
bright Ocean rangers performed in-port and underway
observations
bright DEC staff spent majority of time going through
ocean ranger reports
bright Ocean rangers looked for potential non-compliance
with marine discharge and pollution requirements and
to ensure proper sanitation, health, and safety
practices for passengers and crew
bright Ocean rangers were observers, not inspectors, and
passed concerns to DEC for further investigation
He explained that between 3 and 5 of the 22 ocean rangers
employed throughout a summer season were Alaskans. One
requirement was that ocean rangers must be marine engineers, but
there were insufficient numbers of residents who were qualified,
so DEC hired retired marine engineers from the Lower 48.
COMMISIONER BRUNE noted that the ocean rangers also looked at
sanitation and health practices, such as pools, sneeze guards,
and nail salons.
COMMISIONER BRUNE reviewed slide 4, Current Program Challenges
and Inefficiencies:
bright Over 12 years, DEC has spent roughly $40 million
on the ocean ranger contract. During that time, six of
the DEC issued Notices of Violation (NOVs) were
attributable to ocean ranger observations.
He reported that $1 million of the roughly $3.5 million per year
was paid to cruise ships for ocean ranger berths. Only six of
264 NOVs [notice of violations] were attributable to ocean
ranger observations, whereas a number of violations were self-
reported by the industry He suggested that if this were a
general fund program, the state would have eliminated it a long
time ago. He said DEC hopes to make it a much better program.
In response to Senator Coghill, he explained that NOVs are
notice of violations that are typically exceedances in air or
water emissions or discharges. Most of the NOVs were not formal
because the proposed violations either lacked sufficient
information to make a determination or the issues are covered
under federal or other jurisdictions.
3:39:26 PM
COMMISSIONER BRUNE reviewed slide 5, CS Bill Overview:
bright Simplified fee structure
bright Moving detailed statutes to regulation multiply
Incorporating technology
bright Updating wastewater systems in port communities
through a grant or loan program
He reiterated that the department will be using current
technology in its program and will update some wastewater
systems in port communities through grant or loan programs
similar to the Village Safe Water (VSW) program.
COMMISSIONER BRUNE turned to slide 6, Current Fee Structure
[This slide also contained a table that illustrated the current
fee structure]:
:
bright Commercial Passenger Vessel Environmental Compliance
Fee (CPVEC) funds DEC's work overseeing cruise ships
bright Ocean ranger fee funds management and operation of
the ocean ranger program
3:40:25 PM
COMMISSIONER BRUNE turned to slide 7, which listed the current
passenger vessel fee structure in [AS 46.03.480(b)(1)-(10)]. He
said the fee schedule was confusing and tedious. For example,
the per berth fee is $750 for vessels with a capacity of 500 but
not more than 999 passengers. The fee schedule in this statute
sets fees depending on vessel berths that range up to 3,500
passengers.
He read the current fee structure in the table on slide 6 that
showed that the fees for the CPVEC program are scaled per lower
berth fee based on range of berths at $.070 to $1.75.
3:41:30 PM
COMMISSIONER BRUNE reviewed slide 8, Proposed Fee Structure:
bright New fee would take effect in 2021 cruise season
bright All vessels over 50 berths pay $5 per berth Large
vessels pay roughly the same, small vessels will see
an increase in fees and an increase in oversight
bright The fee would be reduced by $1 per berth for any
ship that maintains a DEC-approved electronic
wastewater monitoring system
COMMISSIONER BRUNE said the new, simpler fee structure would
become effective for the 2021 cruise season. All vessels would
pay the same fee per berth to fund the Commercial Passenger
Vessel Environmental Compliance (CPVEC) program. The department
performed an analysis of the cost, and the large vessels would
pay about the same and the smaller ones will see an increase in
fees and oversight. He said DEC will reduce fees by $1 per berth
as an incentive for any ship that maintains a DEC-approved
electronic wastewater monitoring. DEC considered requiring
electronic wastewater monitoring, but the federal government
informed the department that it could only incentivize it.
3:43:02 PM
SENATOR KAWASAKI asked how many vessels would currently qualify
as over 50 berths.
COMMISSIONER BRUNE responded that he would follow up with that
information but the newer systems are incorporating this
technology. He remarked that if it's possible to tell from
Houston, Texas whether valve 485 of the Trans-Alaska Pipeline
System (TAPS) is open or not, the DEC should be able to use
technology to know whether a valve is open on a cruise ship from
Miami or somewhere else. He reported that some of the older
ships do not have that technology built in and have manual
systems. He offered to report back to the committee.
SENATOR KAWASAKI asked if the DEC approved electronic wastewater
monitoring system would be in regulation.
COMMISIONER BRUNE answered yes. Incorporating it in regulation
would give the department more flexibility as technology evolves
than having to come back to the legislature for statutory
changes.
3:44:28 PM
CHAIR MICCICHE asked if vessels with less than 50 berths were
previously exempt.
3:44:39 PM
EMMA POKON, Deputy Commissioner, Department of Environmental
Conservation (DEC), Juneau, Alaska, answered yes. She said there
is a definition for commercial passenger vessel that makes that
clear.
CHAIR MICCICHE said it was interesting to see that the changes
resulted in one lost berth. This language relates to all vessels
over 50 berths whereas the previous language applied to all
vessels under 50 berths. He asked the DEC to review this.
3:45:21 PM
SENATOR KIEHL calculated that the incentive for a 2,400
passenger vessel operating 15 trips would yield $35,000 to
$38,000 per year at $1 per berth. He said he had no sense for
what it would cost to outfit a ship like that or how long it
would take to recover those costs, but he questioned whether the
incentive was adequate.
COMMISSIONER BRUNE answered that he posed that question to Mike
Tibbles, Alaska representative from Cruise Lines International
Association (CLIA), who will report the answers from its
members.
3:46:53 PM
COMMISSIONER BRUNE reviewed slide 9, Staying Current with
Technology and Environmental Standards:
bright This CS removes sections of statute that are overly
detailed and do not allow for changing technology
and environmental standards
bright Requires DEC write regulations that address the
items removed from statute
bright Putting requirements in regulation allows DEC to
respond to future improvements in waste treatment
and monitoring technologies
bright New technology could provide for 24/7 electronic
monitoring of ships' discharge ports
He said the deputy commissioner will cover this in more detail.
He stated that when the initiative passed, it contained
specifics not normally contained in regulation. As the
technology evolves, the department will potentially be able to
monitor 24/7 without people on board the vessels.
3:48:16 PM
COMMISSIONER BRUNE reviewed slide 10, Local Water Quality
Disparity:
bright Large cruise ship permit allows up to 40 fecal
colony forming units per 100 ml.
bright Local wastewater treatment facility permit allows up
to 1.5 million fecal colony forming units per 100
ml.
bright Many of the over one million yearly cruise ship
passengers will use onshore restrooms when visiting
Alaska ports
He said he believes in consistency and if the state has a high
standard for industry, it should also have a high standard for
itself. Currently the allowances for cruise ships is 40 fecal
colony forming units (cfu) per 100 ml, but some coastal
communities can discharge 1.5 million cfu/100 ml. Even though he
does not propose increasing the cruise ship allowances, the
state must address the disparity in local communities. Many of
the systems were built long before the tourism industry grew.
The cruise industry had 1.2 million passengers in 2019, and this
year projects that figure to grow to 1.5 million. These visitors
must either use boat or shoreside facilities, so communities
need to upgrade their shoreside systems.
COMMISIONER BRUNE reviewed a table on slide 11. He said the bill
would create a program similar to other systems, such as Village
Safe Water (VSW). Communities will submit a proposal and show it
has "skin in the game" by raising resident utility rates or by
showing contributions made by their local assemblies. DEC will
rank the proposals by their impact on the environment, so an
older system will score higher.
He explained that DEC estimates it has $10 million in funds and
will use roughly half the annual receipts of $12-13 million to
assist communities. It does not sound like a lot since many
Southeast Alaska communities' systems will cost $40 to $50
million. This would not pay for the systems, but it could
provide an incentive for system upgrades through low interest
loans or grants, he said.
3:51:47 PM
CHAIR MICCICHE recalled a few years ago the state repealed the
zero discharge rule for vessels. At the time, the state
struggled when it realized how many 301(h) waivers were in
Alaska. He asked if the department has long-term goals to move
beyond waivers in Alaska.
COMMISSIONER BRUNE responded that slide 11 provides a cross
section of some communities with waivers. He noted Juneau does
not have a waiver. He explained that the Clean Water Act 301(h)
waivers allow communities, including Anchorage, to only treat
their sewage at the primary level. A number of communities in
the U.S. with 301(h) waivers, such as Honolulu, San Diego, and
San Francisco have all upgraded their systems to secondary or
tertiary treatment. Ideally, the state should treat its water at
a tertiary level. However, the estimated cost for Anchorage to
upgrade its system is $1.5 to $ 2 billion. He related that the
science shows that there is a very large natural mixing zone
with the huge tides in Anchorage. He did not anticipate
Anchorage would use these funds to upgrade its treatment plan.
For now, DEC will focus on Southeast Alaska communities, he
said.
3:54:00 PM
CHAIR MICCICHE agreed that it was time for the state to begin to
hold discussions with communities. He expressed interest in
emphasizing the consistency discussion rather than in having
Anchorage convert.
COMMISSIONER BRUNE remarked he often has heard that DEC closes
beaches due to fecal coliform issues. People mistakenly think
the problem is coming from the cruise ships when DEC scientists
identify the sources are from the local wastewater treatment
plants in those communities.
3:55:24 PM
SENATOR GIESSEL recalled that five years ago, the Environmental
Protection Agency (EPA) required Unalaska to upgrade its
facility. She asked why these other communities did not need to
do so.
COMMISSIONER BRUNE said the EPA has an interest in upgrading the
301(h) waivers throughout the U.S. He was unsure why Unalaska
was targeted, but the organization is working its way through
its list. Anchorage is one of the larger communities remaining.
He suggested that the EPA is ticking off communities that have
the largest risk to human health. He offered to research this
and follow up with more information.
CHAIR MICCICHE asked him to send the information to the
committee.
3:57:05 PM
SENATOR KAWASAKI expressed interest in the volumes coming out of
local communities and the cruise ship industry.
COMMISSIONER BRUNE agreed to provide the information. He
acknowledged that the overall impact of discharge in water
matters.
3:57:49 PM
COMMISSIONER BRUNE reviewed slide 12, Shoreside Facility
Upgrades:
bright A portion of the collected fees will be used to
support improvements to shore-based wastewater
treatment facilities in port communities
bright DEC will establish a grant/loan program to provide
financial assistance (i.e., maybe in the form of a
revolving loan fund)
3:58:16 PM
COMMISSIONER BRUNE reviewed slide 13, 2020 Cruise Ship Season
and Beyond:
bright Marine engineers (DEC staff and contractors) will
perform initial and annual inspections on ships
operating in Alaska as early in the season as
possible
bright Marine engineers and/or DEC inspectors will perform
both random and targeted inspections in-port and
underway
He reported that the department's $900,000 fiscal note would
allow it to provide marine engineers to perform initial and
annual inspections. He compared it to an as-built survey for a
house, such that the inspectors would assess the ship to verify
systems and identify any "magic pipes" the ships may have. He
said early season inspections will provide consistency.
COMMISIONER BRUNE said the deterrent factor of having someone on
the ship does not play out since a company that wants to do
something nefarious will do so while the ocean ranger is
sleeping or inspecting the galley. He envisioned the department
would conduct its inspections the same way as it does for other
state regulated industries such as mining, oil and gas,
community wastewater treatment facilities, and fish processing
facilities.
4:00:18 PM
SENATOR KIEHL recalled that Commissioner Brune previously stated
one of the weaknesses of the ocean ranger program is that the
rangers were observers and not inspectors, in part, because they
were contractors. He asked if the contractors performing initial
inspections will be inspectors or if DEC staff will need to
follow up.
COMMISSIONER BRUNE responded that the department currently has
one marine engineer on staff and hopes to add one more. DEC
staff inspectors will conduct initial inspections and they will
have the ability to issue Notice of Violations (NOVs). Also, DEC
will have staff in close proximity to immediately address any
issues that arise for inspections not done by staff.
SENATOR KIEHL asked what he meant by close proximity.
COMMISSIONER BRUNE said he envisioned that the inspectors would
be in Juneau to inspect the three to five ships per day. The
marine engineer on staff in Juneau would oversee the inspection.
However, DEC staff will conduct inspections throughout the year.
COMMISSIONER BRUNE reviewed slide 14, 2020 Cruise Ship Season
and Beyond:
bright DEC Inspection, Monitoring, and Compliance
bright 4 new DEC positions
bright 10 DEC staff available for the cruise ship season to
review reports and conduct in-port and underway
inspections, compliance and enforcement actions
bright Inspections will be random and targeted
He explained that the department would replace the 22 ocean
ranger positions with four new positions or the equivalent of 10
fulltime positions. This staff would conduct inspections under
the marine engineer's supervision. He offered to flesh this out
a little more and provide the information to the committee.
COMMISIONER BRUNE said he anticipated that ships with newer
technology would not need inspections as often since the
department will have more information from them. However, the
new technology will not happen in the first year or two. He said
DEC inspects good actors less, and bad actors more frequently.
4:04:09 PM
CHAIR MICCICHE asked what kinds of responsibilities the four
positions would have in the off season.
COMMISIONER BRUNE replied the inspectors would inspect oil and
gas, fish processing, and wastewater facilities in the state and
he hoped these employees would be cross trained to do so.
Similarly, since the department will only hire four new
positions, the other six employees would be cross trained to
conduct inspections on cruise ships.
4:05:03 PM
COMMISSIONER BRUNE reviewed slide 15, Additional Changes:
bright Repeals and re-enacts 46.03.480(c) addressing fee
schedule for State of Alaska vessels
bright Repeals citizens' suits
bright Conforming changes
COMMISSIONDER BRUNE said AS 46.03.480(c) gives the commissioners
of the Department of Environmental Conservation (DEC) and the
Department of Transportation and Public Facilities (DOTPF) the
authority to negotiate fees to charge ferries for their berths.
To date, that amount has been zero and he proposes to keep it
the same, but Legislative Legal Services attorneys wanted to
repeal and reenact the provisions as part of this bill.
COMMISIONER BRUNE said the citizens' suit provision was never
used.
4:06:28 PM
COMMISSIONER BRUNE reviewed slide 16, Effective Dates. He said
the bill has staggered effective dates. There is an immediate
effective date or retroactive to April 1, 2020 for the repeal of
the ocean ranger statute and fees for DEC's activities. DEC will
transfer those fees to its activities immediately. The single $5
fee and new regulations would be in place by January 1, 2021.
bright Staggered effective dates will allow for continuity
over the summer of 2020, and give DEC time to draft
necessary regulations.
He explained that DEC considered both this season and next
season when it set the effective dates to provide consistency.
CHAIR MICCICHE restated that DEC will keep its current fees in
place this summer and implement new fees on January 1, 2021.
COMMISSIONER BRUNE clarified that the current fees are roughly
$5 and next year's fee switches to the flat $5 fee.
4:07:39 PM
COMMISSIONER BRUNE recapped fees in slide 17, Fiscal Impacts:
bright Revenue: Large ships see little change, fees go up
for small vessels in 2021
bright Contract for marine engineer inspections will be
considerably lower than for ocean rangers
bright Attached fiscal note includes expenditure authority
for the 2020 cruise season
bright Personal services and other support costs for four
new positions add to DEC's baseline budget
bright Expect future capital appropriation in grant
authority to improve water quality near communities
COMMISSIONER BRUNE recalled that the fees for smaller vessels
was $60,000. The fiscal note for DEC requests $900,000
supplemental authority for the 2020 cruise season. He
anticipated that DEC would submit future capital appropriation
requests for the low-interest loans created in the program.
4:09:13 PM
SENATOR BISHOP asked if the four new positions were lateral
transfers or if the plan was to hire new staff. He further asked
if DEC has started recruiting.
COMMISSIONER BRUNE answered that he does not yet have the
authority to recruit. Once the bill passes the department will
hire from within or hire new staff.
SENATOR BISHOP asked for his projection on how long it will take
to fill the new positions.
COMMISSIONER BRUNE said current staff has significant expertise,
but will need some training. He offered to follow up with more
information.
4:10:50 PM
COMMISSIONER BRUNE reviewed slide 18, What will Not Change:
bright DEC's authority to conduct inspections at reasonable
times and ability to get a warrant if necessary
bright DEC's vessel registration system, which is required
for all passenger vessels with over 50 overnight
berths
bright Air emission monitoring program
bright The large cruise ship wastewater discharge general
permit
bright The small cruise ship and ferry best management
plan requirements
bright Sampling or reporting requirements
bright What may not be discharged to Alaska's environment
COMMISSIONER BRUNE said the agency has the authority to conduct
inspections and it uses a system, method 9, to take shore based
records for the air emission monitoring program. They plan to
move this component to the air division where it is better
placed.
4:12:37 PM
EMMA POKON, Deputy Commissioner, Department of Environmental
Conservation (DEC), Juneau, Alaska, paraphrased the sectional
analysis for the proposed committee substitute (CS) for SB 70,
version U:
Section 1 Amends AS 46.03.460 to clarify that DEC
has organizational flexibility to regulate cruise
ships with personnel from different DEC divisions
(air, water, etc.) and directing DEC to adopt
regulations implementing the simplified environmental
compliance statutes.
Section 2 Repeals and reenacts AS 46.03.463 to
simplify and broadly consolidate existing subsections
(a) (c), (e), and (f) and (h) into a single
subsection, enabling DEC to set specific discharge
limits and requirements in regulation.
She said Section 2 broadly consolidates a lot of the specificity
currently in AS 46.03.462 and 46.03.463. She continued:
Section 3 Amends AS 46.03.465(a) to provide DEC with
flexibility to establish the form and timing for
cruise ships to report to DEC.
Section 4 Amends AS 46.03.465(c) to clarify DEC's
authority to inspect vessel wastewater and air
emissions systems.
MS. POKON said that to the extent there is any question about
the authority, this provision will add clarity.
Section 5 Conforming amendments to AS 46.03.465(d).
Section 6 Amends AS 46.03.465(d) to authorize DEC to
require certain reports in a particular form (e.g.,
electronic).
Section 7 Conforming amendment to AS 46.03.465(h).
Section 8 Conforming amendment to AS 46.03.465(i).
4:14:52 PM
MS. POKON reviewed Section 9, that establishes the simplified
fee structure, setting up a $5 per berth fee, with a $1
reduction for vessels with an electronic monitoring system.
Section 9 Amends AS 46.03.480(a) to establish a
simplified environmental compliance fee of $5 per
berth per voyage on all commercial passenger vessels
operating in state waters. This replaces both the $4
fee for the ocean rangers and the matrix of general
environmental compliance fees. This amendment also
reduces the $5 fee by $1 for vessels that use
electronic monitoring systems that will improve DEC's
ability to efficiently oversee environmental
compliance. As noted in Section 19, this amendment to
the fee structure would become effective January 1,
2021.
Section 10 Repeals and re-enacts 46.03.480(c) to
conform to changes created by deleting clarifying
language included with the fee structure in the
repealed version of 46.03.480(b). This does not change
the effect of (c) as it currently exists in statute.
She said this gives DEC some discretion when working with the
Alaska Marine Highway System.
4:15:22 PM
Section 11 Amends AS 46.03.482(c) to remove obsolete
language and to broaden the stated purposes for which
the legislature might appropriate the collected fees
to include a grant or loan program created by Section
12.
Section 12 Adds a new section, AS 46.03.483,
authorizing DEC to create a grant or loan program to
support improvements to shore-based wastewater
treatment facilities necessary to serve visiting
cruise ships and cruise ship passengers.
Section 13 Repeals a number of detailed statutes
governing commercial passenger vessels.
Section 14 Repeals the ocean ranger statute, AS
46.03.476, separately so that it may have a different
effective date. This repeal will be retroactive to
April 2020 (see Section 17) so that DEC can transition
to staff inspections this season.
Section 15 Transition language added to the
uncodified law to authorize DEC to work on regulations
before the majority of the bill becomes effective in
January 2021.
4:16:17 PM
Section 16 Includes language that clarifies that the
$4 fee collected under AS 46.03.480(d) may be used for
funding services to passenger vessels, including
regulatory services. This ensures DEC can collect the
established fee this year to support the agency's
cruise ship environmental compliance work
notwithstanding the repeal of the ocean rangers
statute.
MS. POKON reviewed Section 16, which includes language to
clarify that fees collected under AS 46.03.480(d) can be used
more broadly for the cruise ship compliance records rather than
for ocean rangers.
Section 17 Section 14 (repeal of ocean rangers
requirement) is retroactive to April 2020.
Section 18 Provides an immediate effective date for
Sections 14 17 including intent language
specifically for the summer 2020 cruise season
(Section 16) and transition language providing
authority to work on regulations (Section 15).
Section 19 Provides a special effective date of
January 1, 2021 for the majority of the bill; this
ensures that DEC has time to adopt regulations before
the repeals in Section 13 and other amendments become
effective
4:17:13 PM
SENATOR GIESSEL referred to Section 13 and asked for a list of
repealed statutes and what they repeal.
MS. POKON said AS 46.03.460(b) is repealed and it provided the
DEC authority to adopt regulations with specific language about
negotiated rulemaking. The revisions in AS 46.40.460(a) require
DEC to put regulations in place. In terms of negotiated
rulemaking, this is already available under the Administrative
Procedures Act (APA).
She explained that AS 46.03.461 provides detailed requirements
for vessel registration, but these requirements are located in
the bill under 46.03.460(a)(3). DEC plans to put the details for
vessel registration in regulation.
MS. POKON continued with AS 46.03.462, which relates to terms
and conditions of discharge permits now found in the revised
language in AS 46.03.463. DEC will require the vessel permit for
larger vessels or best management practices for smaller vessels
consistent with current practice.
4:19:04 PM
MS. POKON said AS 46.03.480(b) repeals the matrix the
commissioner referred to in his presentation. She said
46.03.480(d) refers to the $4 fee for large vessels that
currently goes for the ocean ranger program. DEC combined those
two sections into a flat $5 fee.
The next repealed section is AS 46.03.480(e), which places the
liability for the fee on the cruise ship. The bill places the
responsibility on DEC to adopt regulations.
MS. POKON said AS 46.03.481 refers to the citizens' lawsuit
section that the commissioner referred to earlier. She said AS
46.03.482(e) states that the commercial passenger vessel
environmental compliance fund is not a dedicated fund. She
explained that there are limitations on how that fund can be
used under federal law. DEC repealed this statute to reflect the
department's understanding of those limitations.
She said AS 46.03.485 relates to a recognition program that
authorizes DEC's permissive language. The department has not in
recent history had an explicit effort towards that, but nothing
prevents it from recognizing environmental compliance.
MS. POKON said DEC repealed definitions in AS 46.03.490(1) and
AS 46.03.490(15) for agents for service of process and untreated
sewage. These terms are no longer in the bill.
4:21:15 PM
CHAIR MICCICHE requested she provide the detailed list and an
explanation of the repealed statutes to the committee.
4:21:31 PM
CHAIR MICCICHE said that the program primarily addresses
effluent discharge. He related his understanding that DEC
monitors air quality electronically more commonly than effluent
discharge.
COMMISSIONER BRUNE answered that the monitoring of air emissions
is via Method 9, which he did not think happens electronically.
He noted people in Juneau install certain systems that provide
data, but it is neither quality data nor the methodology used
for the big cruise ships. He said it is more likely that very
little electronic monitoring currently happens on air emissions.
CHAIR MICCICHE, noting that he said the EPA was interested in
fewer EPA 301(h) waivers, asked whether he has heard of any
programs that would stretch state dollars, such as obtaining
significant federal match to move in that direction.
COMMISSIONER BRUNE indicated his intention to look for federal
funding opportunities.
CHAIR MICCICHE asked whether DEC has tried to reward offshore
operators in the electronic monitoring program since it could
have a positive impact on water quality in state waters.
COMMISSIONER BRUNE replied he has not thought about that. He
agreed that the standards should be the same in federal and
state waters. He was unsure of what jurisdiction the state would
have in outside state waters.
MS. POKON advised that it would difficult to enforce water
quality outside state waters.
4:24:20 PM
CHAIR MICCICHE pointed out that jurisdiction only matters if the
department regulates the activity, but not if DEC incentivizes
it. He suggested that may be something to further evaluate.
COMMISSIONER BRUNE offered to think about that issue. He
reported that in 2019, 14 of the 20 notices of violation that
DEC staff or contractors issued were for wastewater discharges,
six were exceedances and six were air NOVs.
4:25:00 PM
CHAIR MICCICHE asked for the nature of the six ocean ranger
NOVs.
MS. POKON said she thought she might have that information in
her e-mail.
CHAIR MICCICHE responded that she could provide it at the next
meeting.
4:25:25 PM
SENATOR KAWASAKI asked for a breakdown of how many times someone
made a complaint or observation to alert DEC, and not solely the
number of official NOVs.
COMMISSIONER BRUNE said that if an exceedance occurs that
requires a Notice of Violation (NOV), one is issued. It would
not matter who made the observation.
SENATOR KAWASAKI clarified his interest is in knowing how many
times someone observed something, but a formal NOV was not
issued, such that perhaps it was unfounded.
COMMISSIONER BRUNE answered that the ocean ranger annual report
should have that information and he would provide the
information to the committee.
4:27:05 PM
SENATOR BISHOP asked if the department could complete the
regulations in time to meet the current effective date.
COMMISSIONER BRUNE answered yes.
SENATOR BISHOP recalled that DEC has the authority to do
unannounced inspections while the vessels are underway. He asked
whether this would be by boat or helicopter.
COMMISSIONER BRUNE answered that DEC has several opportunities
to conduct unannounced inspections. For example, they could
board at Glacier Bay with National Park Service staff who give
tours, or with marine pilots when they board the ships. He said
DEC might show up and announce that the inspectors will be on
board to Skagway.
4:30:05 PM
SENATOR KIEHL acknowledged that some inspections performed while
underway are good. He asked if DEC will be able to obtain
maritime credentials for all inspection staff, or if it would
always mean tying up vessel staff for the duration of time on
board.
COMMISSIONER BRUNE related his understanding that companies want
DEC staff escorted while on board their vessels. He said he
needs to work these details out with the companies.
SENATOR KIEHL said the commissioner described a good program but
these details are not in the bill. The bill would authorize DEC
to carry out its program and it provides the funding. He asked
how the legislature can provide that much latitude.
MS. POKON replied this approach is consistent with how the
department conducts its business for other regulated and
permitted industries, including mining and shore-based
wastewater facilities. She explained that there is a directive
for DEC to protect water quality. She advised that DEC performs
much of this work through a permitting system. Thus, the
inspection schedule or exact standards are not set out in
statute. DEC's enforcement staff schedules inspections and
reviews the facilities self-reporting and follows up with
enforcement when necessary. She agreed that the statutes lack
specificity but are consistent with DEC's authority.
4:33:09 PM
COMMISSIONER BRUNE added that the department could provide a
report if the legislature would like to review how the new
approach and program has worked for the first year. He did not
recommend requiring DEC to inspect a certain percentage of
vessels. He said there is not any precedent for it in other
industries. Further, having 10 DEC staff dedicated to early
season and random inspections should give the legislature
confidence in this group.
4:34:30 PM
SENATOR KIEHL said it's a bit of a checks and balances notion,
but some of the things the legislature has previously written
have cut the other way, so he was concerned about removing
sideboards. For example, with the plans for small ships, DEC
currently cannot require anything that would impose relicensing
of a vessel or a new stability test. This bill would repeal that
provision.
4:35:04 PM
SENATOR KAWASAKI said one of the repealed statutes relates to
citizen lawsuits. He read a portion of the ballot initiative
language, "It would authorize citizen lawsuits against an owner
or operator of a large cruise ship, or against the Department of
Environmental Conservation, for an alleged violation of any
permit condition, provision of environmental statutes or
performance of duties." He asked if anyone has used the
provision since 2006.
MS. POKON answered no; DEC is not aware of any instance where
someone used that provision.
4:35:40 PM
CHAIR MICCICHE removed his objection. There being no further
objection, version U was adopted.
CHAIR MICCICHE encouraged members to consider their concerns.
He said the original repeal did not contain a lot of solutions.
He said he likes DEC's approach and believes it will improve
water quality.
[SB 70 was held in committee.]
^Presentation: Spill Prevention and Response (SPAR) program by
the Department of Environmental Conservation
PRESENTATION: Spill Prevention and Response (SPAR) program by
the Department of Environmental Conservation
4:36:44 PM
CHAIR MICCICHE announced that the final business would be a
presentation on the Spill Prevention and Response (SPAR)
program.
4:37:10 PM
DENISE KOCH, Director, Spill Prevention and Response, Department
of Environmental Conservation (SPAR), Juneau, Alaska, began a
PowerPoint on the Spill Prevention and Response (SPAR) program.
She reviewed slide 2, SPAR's mission:
Prevent spills of oil and hazardous substances,
prepare for when a spill occurs, and respond rapidly
to protect human health and the environment
MS. KOCH said the plain English version is that SPAR works with
its industry partners to try and prevent oil or hazardous
substance spills. The division maintains its state of readiness
through drills and responds to any spills. The division has a
contaminated sites program that provides long-term monitoring of
sites impacted by spills, in particular, petroleum
contamination.
4:38:08 PM
MS. KOCH reviewed slide 3, Core Services:
bright Protect public health and the environment:
bright ensure that producers, transporters, and
distributors prevent spills of crude oil and
refined oil products and are fully prepared to
clean up spills
bright respond to spills of petroleum and hazardous
substances
bright identify, oversee, and conduct the cleanup
of contaminated sites in Alaska, returning
properties to safe and productive re-use
She related that SPAR works with producers, transporters and
distributors on oil discharge prevention and contingency plans.
SPAR actively participates with them on drills to maintain a
state of readiness.
4:39:19 PM
MS. KOCH reviewed slide 4, Statutory Authorities:
It is the intent of the Legislature and declared to be
the public policy of the State that funds for the
abatement of a release of oil or a hazardous substance
will always be available (A.S. 46.08.030)
She identified this fund as the oil and hazardous substance
release prevention and response fund, also known as the "oil haz
fund." The legislature directed SPAR to always maintain a
funding source for prevention and response.
4:39:56 PM
MS. KOCH reviewed slide 5, Statutory Authorities:
bright Funds from the Response Account are used to respond to
spills or threats of spills that pose an imminent and
substantial threat to Alaska (AS 46.08.040(1)(A))
bright Funds from the Prevention Account are used to:
bright Respond, contain, cleanup, and monitor spills (AS
46.08.040(2)(A))
bright Address existing contamination (AS
46.08.040(2)(K))
bright Pay for the operating costs of the Division (AS
46.08.040(2)(B))
MS. KOCH said that under the broad umbrella of the "oil haz
fund" are two accounts, the response account and the prevention
account. The department notifies the legislature anytime it uses
the response account. The current response account balance is
$29 million. By statute, the response account cap is $50
million. The response account derives its funding by receiving
one cent for each barrel of oil produced in Alaska.
4:41:28 PM
MS. KOCH characterized the prevention account as critical since
it pays for SPAR's operations, including partnering with
industry on plans and drills. It provides the primary source of
funds for the contaminated sites program, although this program
receives some federal grant funds.
4:42:14 PM
MS. KOCH reviewed slide 6, Prevention Account:
bright Prevention Account is funded by:
bright $0.04 per barrel of crude oil produced
bright $0.0095 per gallon of refined fuel
bright Balance has been decreasing for many years
bright Refined Fuel Surcharge was implemented in 2015 to
address the decreasing balance
bright The Surcharge brings in $1 million less per year
than anticipated, in part due to exemptions for fuel
purchases by municipalities and electric
cooperatives
MS. KOCH said the state charges a $.05 surcharge on oil produced
in Alaska. As previously mentioned, $.01 provides revenue for
the response account. The prevention account receives the
remaining $.04 surcharge. In 2015, due to declining oil
production, the surcharge collected was insufficient to fund the
prevention account. Therefore, SPAR worked with the legislature
to pass the refined fuel surcharge which charges .0095 cents per
gallon of refined fuel. This surcharge provides a major revenue
stream to the prevention account.
MS. KOCH related reasons the prevention account suffers from a
shortfall. At the time the bill passed, the Department of
Revenue projected estimated revenues from the refined fuel
charge at $7 million, but DOR did not anticipate exemptions to
the surcharge, such as fuel sold to municipalities and electric
cooperatives. Further, DOR overestimated the amount of refined
fuel sales in Alaska. The overall impact in refined fuel
surcharge revenue results in $1 million less than anticipated
per year, she said. She pointed out other revenue streams for
the prevention account are investment income and settlements.
However, these sources do not provide the major revenue to the
prevention account.
4:45:46 PM
MS. KOCH reviewed slide 7, Prevention Account Revenue Shortfall:
bright Prevention Account annual expenditures exceed the
annual revenue
bright Prevention Account projected to run a deficit as
early as FY2024
bright Reduce $1,019.1 and 7 positions in FY21 budget
bright -$643.5 Prevention Account
bright -$375.6 Federal Receipts
She explained that programmatic growth is not driving the gap in
revenue because the program has been stable. She said she looked
at the division and proposed deleting seven positions reducing
$1,019,000 that is reflected in the Governor's FY 2021 budget.
She acknowledged the challenges that budget cuts cause, but said
SPAR should be able to make these reductions and still provide
its core services.
4:47:41 PM
CHAIR MICCICHE said the legislature purposefully kept it tight
when it passed the $.0095 surcharge, which is less than a penny.
The miscalculation from the DOR cut SPAR short very quickly, he
said. One reason to assess the refined fuel surcharge was that
it seemed fair to charge those more likely to use the services.
He said he has spoken to the Senate Finance Committee and
Senator Bishop about this problem. He expressed interest in the
proportional representation for the prevention account, such as
the amount of expenditures directed to mom/pops or for
residential. He wanted to be certain that the state would not
create an additional burden on individual Alaskans who use the
fuels that are causing some of the issues.
MS. KOCH offered to follow up with data. She acknowledged that
she had similar questions. She said SPAR has large expenditures
on military installations, but the federal government reimburses
it for the work through RSAs [Reimbursable Services Agreement]
or grants. She indicated that she focused on the non-reimbursed
expenditures. She reported that 70 percent of SPAR's
unreimbursed expenditures fall in categories other than oil and
gas. These expenditures range from cleanups due to truck
rollovers, ships on rocks, junkyards, home heating oil spills,
and commercial properties. The oil and gas producers and
refineries in Cook inlet and on the North Slope contribute about
50 percent of the revenue, but only 20 percent of the
expenditures for cleanup. She offered to provide an expenditure
report.
4:51:57 PM
SENATOR BISHOP said SPAR knows where the tanker rollovers are
occurring. He noted he has discussed this with the [DEC]
commissioner. He said he would like to see the administration
work with the Department of Transportation and Public Facilities
(DOTPF) to eliminate the hazards on the Richardson Highway.
MS. KOCH agreed that SPAR will work with DOTPF on that issue.
4:52:46 PM
MS. KOCH reviewed slide 8, FY 2021 Operating Budget Reductions:
bright Eliminate Class II Storage Facility Program (2
PCNs; Anchorage & Juneau)
bright Register facilities and provide spill prevention
technical assistance
bright Fuel storage capacity 1,000-420,000 gallons non-
crude
bright Not statutorily required
bright EPA continues to have regulatory oversight
bright Reduced Capacity in Training & Guidance Unit (2
PCN; Anchorage & Juneau)
bright Training for responders and staff
bright Regulations and Division guidance development
bright Reduced Capacity in Contaminated Sites (2 PCN's;
Anchorage & Juneau)
bright Long term soil and water contamination cleanup
bright Reduced administrative support (1 PCN in Anchorage)
MS. KOCH reported that the seven proposed staff reductions
consist of three filled positions and four vacant positions. She
purposefully held positions vacant due to the revenue shortfall,
she said. She directed attention to the elimination of the class
II storage facility program. This consisted of a registration
program that provided spill prevention technical assistance
outreach, which was not statutorily required. Further, the EPA
has a Spill Prevention, Control and Countermeasures Program
(SPCC) with some overlap, so another entity can do the work.
4:54:40 PM
SENATOR KIEHL referred to the fuel storage capacity of 1,000 -
420,000 gallons of non-crude in the proposed elimination of the
class II storage facility program. He asked if this was diesel
fuel.
MS. KOCH answered that it is for non-crude oil, which includes
diesel fuel.
SENATOR KIEHL asked what portion of the facilities move the non-
crude refined fuel.
MS. KOCH answered that SPAR has a database consisting of
approximately 2,000 facilities. She said the Spill Prevention,
Control and Countermeasures Program (SPCC) is comparable to
DEC's program, with a cutoff of 1,300 gallons or higher. She
explained that SPCC covers a similar universe of tanks,
including fuel storage facilities. These might be at rural
schools or other facilities, but typically fuel storage of less
than 420,000 relate to non-industrial use.
SENATOR KIEHL indicated he may wish to follow up on this this.
He expressed concern about leaving Alaska's schools at the mercy
of the EPA.
4:56:26 PM
CHAIR MICCICHE suggested that Senator Kiel would feel more
comfortable after Ms. Koch shares information on the EPA's
program. He characterized DEC's program as largely a database
without much oversight. He suggested that she share this
information with the committee. He recalled that the program was
somewhat redundant and eliminating it would not create a gap.
MS. KOCH agreed to provide the committee with information on the
SPCC program. She acknowledged that the program provided some
duplication.
4:57:30 PM
MS. KOCH stated that the work currently performed by the other
deleted positions will be spread to other staff.
4:57:48 PM
MS. KOCH reviewed slide 9, Prevention Account Balance FY 2009 -
FY 2025. This slide consisted of a graph that showed the
prevention account actuals for FY 2009- FY 2020 plus projections
from FY 2021 through FY 2025. She explained that the account had
downward trends except it spiked in FY 2014 due to a settlement
and in FY 2016 from passage of the refined fuel surcharge. Since
then the revenues steadily drops due to the $1 million
shortfall. This graph reflects the revenue from the seven
deleted positions. The account will run out in FY 2024 if
nothing else changes.
5:00:26 PM
SENATOR BISHOP asked if the prevention account went to zero,
whether anything would jeopardize the state's primacy to keep
administering the state's program.
MS. KOCH answered that SPAR is not a primacy program, unlike the
Division of Air Quality that has primacy under the Clean Air Act
or the Division of Water with primacy over EPA's Section 402
program under the Clean Water Act. It is a little different
since the federal government doesn't delegate this function. She
characterized it as the state wanting to be involved in
preventing oil spills and other future disasters.
5:01:25 PM
SENATOR COGHILL commented that the state needs to partner with
the federal government on Arctic coastal issues. He asked for
her assessment on Alaska's partnership with the federal
government. He said that readiness could affect marine mammal
issues.
MS. KOCH responded that the state has strong partnerships with
the federal government. For example, industry, SPAR, EPA and the
U.S. Coast Guard would comprise the unified command to handle
operations and logistics. The EPA generally takes the lead on
inland spills and the U.S. Coast Guard takes the lead on coastal
spills. She explained that the agencies have their own federal
memorandum of understandings (MOU) to hash out jurisdictional
issues.
5:04:03 PM
SENATOR KAWASAKI asked how SPAR is doing on collections from
unreimbursed activities.
MS. KOCH answered that SPAR has a statutory obligation for cost
recovery. She said cost recovery is 90 percent or higher for
larger parties, such as industry, whereas the mom/pop, junkyard,
or home heating oil spill has a much lower incidence of cost
recovery of approximately 30 percent after a protracted period.
5:05:20 PM
CHAIR MICCICHE said slide 12, Prevention Account Projection FY
2009 - FY 2025 lists the revenues, expenditures, and balance
projections. He said based on his experience as an incident
commander in the private sector, SPAR is an asset. Prior to SPAR
being on site, the response for the mom/pop businesses either
did not occur or the spill would spread to adjacent properties.
He said this organization helps small businesses who cannot
afford to perform spill activities. He commended SPAR's work and
said he hoped that the committee would take this seriously.
5:07:00 PM
There being no further business to come before the committee,
Chair Micciche adjourned the Senate Resources Standing Committee
meeting at 5:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 70 ver. A 02.22.19.PDF |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft CS Ver. U 02.12.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Sectional Analysis Draft CS ver. U 02.14.2020.PDF |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 DEC Presentation on Cruise Ship Environmental Monitoring 02.17.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft Fiscal Note for Draft CS ver. U (RES)-DEC-AQ 02.13.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft Fiscal Note for Draft CS ver. U (RES)-DEC-DAS 02.13.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft Fiscal Note for Draft CS ver. U (RES)-DEC-EH 02.13.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft Fiscal Note for Draft CS ver. U (RES)-DEC-WIF 02.13.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| SB 70 Draft Fiscal Note for Draft CS ver. U (RES)-DEC-SSS 02.13.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
SB 70 |
| DEC Presentation - SPAR Overview 02.17.2020.pdf |
SRES 2/17/2020 3:30:00 PM |
DEC Presentation - SPAR 02.17.2020 |