1:03:54 PM HJR 47-SMALL VESSEL CARGO EXEMPTION  CHAIR P. WILSON announced that the first order of business would be HOUSE JOINT RESOLUTION NO. 47, Urging the United States Coast Guard to amend its regulations relating to small vessels transporting fuel and supplies to remote communities and businesses in the state. 1:05:56 PM DAVID SCOTT, Staff, Representative Kyle Johansen, Alaska State Legislature, on behalf of the prime sponsor, explained that HJR 47 would urge the U.S. Coast Guard (U.S.C.G.) to amend it regulations relating to small vessels transporting fuel and supplies to remote communities and businesses in the state. A constituent brought this matter to Representative Johansen's attention. Mr. Spokely is on-line to testify today, he stated. DAVID SPOKELY, Power Systems and Supply Alaska, stated that problems exist in delivering fuel and freight to Southeast Alaska and remote sites. He explained that twenty years ago logging barges were available in Southeast Alaska to help move goods. He modified a vessel for fuel delivery. He then built a brand new vessel and worked with the Department of Environmental Conservation (DEC) to develop a spill response that meets the U.S. Environmental Protection Agency's (EPA) 2010 standards. The vessel he designed and built is a triple-hull high-speed landing craft. Although the local and state branches of the U.S.C.G. liked his system, when he applied for an exemption to the federal law, the national offices limited him to one vessel until the matter could be further investigated. He would like to have several ships in order to serve local communities, but has since been advised that due to cutbacks the U.S.C.G. would not develop any regulations to allow operation of his vessels. 1:09:15 PM MR. SPOKELY restated that the local and state U.S.C.G. "liked what his company was doing." He explained that his spill response plan meets the EPA's 2010 standards that the state will implement for fuel delivery. His triple-hull lightweight vessel cruises at 23 knots and can navigate into shallow waters, which allows him to traverse bays and rivers. During its five years of operation his vessel has never "spilled any fuel". He detailed other aspects of his vessel's system, including the self-regulating pumping system. The state DEC and the local U.S.C.G. offices assisted him with the vessel design, certified, and inspected his vessel as a passenger vessel, a bulk fuel carrier, and a bulk cargo carrier. He reported that as of today his vessel is the only vessel in the U.S. that has obtained all three designations at once. The U.S.C.G. did not identify any issues or request any modifications or changes to his vessel. In fact, the state DEC office would like his company to expand throughout the state to serve coastal areas, he stated. MR. SPOKELY, in response to Chair Wilson, replied that his vessel delivers fuel, cargo, and passengers. The difficulty is that the regulations that apply to his vessel were developed for supertankers. Thus, the U.S.C.G. has not addressed the requirements that apply to smaller vessels. So long as his vessel remains under 15 gross tons the bulk of the regulations do not really apply, but since his tanks are internal, he must meet the cargo tanker vessel regulations intended for large oil tankers. In order to obtain relief, the U.S.C.G. must create a new subchapter in regulation that would apply to smaller vessels transporting fuel, freight, and passengers. He said, "We addressed that through this exemption. They thought it was great. They loved what we did. They agreed we should be building more of these and supplying them everywhere. Maine has been calling us and asking if they can get our boats." The limitation arises since his vessel is built from aluminum and the regulations require tankers to be built from steel. Thus, his issue requires the U.S.C.G. to create a new category of vessel. The U.S.C.G. was moving forward on regulations and then decided on other priorities to fund. Therefore, no funding or staff has been authorized to write the regulations. 1:13:58 PM MR. SPOKELY reported that he has worked with the local U.S.C.G. office on draft regulations, but the Juneau office does not have resources to move forward, either. Meanwhile, he is "stuck" with one boat in Ketchikan while Alaska needs more boats like his to serve the small Alaskan communities. He pointed out the exemption would apply to all companies providing similar service, not just his company. 1:14:57 PM CHAIR P. WILSON related her understanding that this resolution, HJR 47, would ask the U.S.C.G. to create a new category of vessel and separate it out from the requirements for larger vessels. 1:15:47 PM MR. SCOTT, in response to Representative Gruenberg, explained that he had an expert witness lined up to testify but the person was not able to make the meeting. He explained that the U.S.C.G. personnel offered to answer any questions that are submitted in writing. REPRESENTATIVE GRUENBERG offered his belief that it sounds like the statutory authorization exists but the U.S.C.G. must publish a regulation to cover vessels that carry fuel, cargo, and passengers concurrently at the same time. MR. SCOTT agreed. 1:17:08 PM REPRESENTATIVE GRUENBERG stated that he does not have any problem passing HJR 47 out of committee. He asked why the U.S.C.G. has not yet adopted regulations since not doing so makes it tough for Southeast Alaska businesses. He asked what needs to happen, whether a U.S.C.G. Admiral could come before the committee or if the U.S. Congressional delegation would need to assist in addressing the issue. REPRESENTATIVE JOHANSEN said he appreciated Representative Gruenberg's point of view. He would like to see the resolution keep moving through the process. CHAIR P. WILSON said she would also like to pass the resolution out of committee. She asked the sponsor's staff to contact the U.S.C.G. 1:18:36 PM REPRESENTATIVE MUNOZ related her understanding that the U.S.C.G. in Alaska is supportive but the matter just needs attention at the national level. MR. SCOTT agreed. CHAIR P. WILSON commented that she hoped this resolution would help alleviate the problem. 1:19:17 PM REPRESENTATIVE PETERSEN asked whether the Ketchikan boat building facility could build boats of that size. MR. SCOTT answered yes. REPRESENTATIVE PETERSEN expressed support for using this type of vessel in Western Alaska. He offered his strong for HJR 47. 1:20:21 PM REPRESENTATIVE GRUENBERG asked whether this vessel was built from the hull up. MR. SPOKELY explained that his vessel is a one of a kind vessel. This vessel is 44 feet long and he plans to keep any future vessels under 65 feet and under 10,500 gallons. He stated that his company does not want to compete with "giant barges" but would like to deliver small quantities of fuel in a safe manner to rural areas. He envisioned using the 50 to 60 foot vessels as well as the 40-foot vessel designed specifically for shallow water navigation. It takes less than ten minutes to convert his vessel from a freight or passenger vessel to a fuel vessel. Fuel transport operations cannot occur while passengers are on board, which he characterized as a good policy. CHAIR P. WILSON related her understanding that Mr. Spokely has a "sister ship" waiting in the wings to be built. MR. SPOKELY answered yes. REPRESENTATIVE MUNOZ thanked Mr. Spokely for his investment and transportation in the Southeast Alaska region. 1:22:42 PM CHAIR P. WILSON, after first determining no one else wished to testify, closed public testimony on HJR 47. REPRESENTATIVE JOHANSEN remarked that the vessel Mr. Spokely designed is in demand. He characterized the vessel as an "amazing vessel" manufactured and designed in Alaska, with potential applications statewide. He said he is proud to represent District 1. He wants to "cut that red tape" and allow Mr. Spokely to move forward with his second ship. He said, "We should all get behind it and make it happen." REPRESENTATIVE JOHANSEN removed his objection. REPRESENTATIVE MUNOZ moved to report HJR 47 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HJR 47 was reported from the House Transportation Standing Committee. 1:24:24 PM REPRESENTATIVE GRUENBERG added he was on a landing ship tank (LST) in Vietnam, which he thought was very similar to this vessel. He stated that the LSTs hauled cargo and people, but did not need a pier to unload.