CSHB 134(RES)-CRUISE SHIP WASTEWATER DISCHARGE PERMITS  5:12:39 PM CO-CHAIR MCGUIRE announced CSHB 134(RES) to be up for consideration. She said they already had public testimony, but she would open it up briefly to see if people had something different to say than they said before. 5:13:33 PM JEFF FARBER, Alaska Long Line Fishing Association (ALFA), Sitka, had a letter that she asked him to summarize. He supported HB 134. He is a 10-year resident of Sitka and a 20-year commercial fisherman. He values pristine clear waters that Alaska's fish are harvested from. They have worked really hard to get that message out to the public and don't want that message to be degraded or compromised. They are committed to being good stewards of Alaska's resources and expect that same commitment from other users. He supported a sunset on the mixing zones for cruise ship discharges. 5:15:28 PM JENNIFER GIBBONS, Executive Director, Prince William Sound Keepers, and serves on the Board of the Cordova Chamber of Commerce. She sees this issue from both an environmental perspective and tourist perspective. They have made good progress in allowing industry some flexibility with the timeline and that is both realistic and fair. But that needs to be balanced with protecting our Alaskan waters by insuring there is a deadline that will sunset the waivers allowed in Section (e). They know that both from the technology conference earlier this year and from DEC's March 2 report that the technology is advancing, that the deadline has been the driving incentive behind progress and that it is possible to meet the goal within the next several years. 5:17:06 PM CAROLYN ROSEBURY, representing herself, Cordova, urged amending section (e) to sunset in 3-5 years, because this deadline is the only incentive for compliance. ERIC LEON, representing himself, said he is a member of Cordova District Fishermen United, agreed with previous comments in support of sunsetting section (e). STEVE SMITH, Board Member, Cordova District Fishermen United, supported HB 134 and sunsetting section (e) in 3-5 years. Everything depends on fishing for him, so the cleanliness of our waters is paramount. JOHN FALKNER, representing himself, Homer, supported passing CSHB 134(RES) without the sunset amendment. He operates three hotel properties on the Kenai Peninsula, and has worked hard to develop ground-based motor coach tours with the cruise companies there. They are very price-sensitive and are the first things visitors cancel when the price of their trip increases. In 2009 he had 600 more room cancelations than in 2008. More importantly, he said the entire Clean Water Initiative should be under review by this committee, because the process was "flawed to the core." 5:20:47 PM He is totally ignorant of chemicals and mixing zones, and his research shows that those who voted for this initiative had no idea what they were voting on. Secondly, how can an initiative be considered valid if what the initiative implements is unachievable? 5:21:36 PM DON HERNANDEZ, representing himself, Petersburg, said he had been a commercial gillnet fisherman in Southeast Alaska for 27 years and very much opposed allowing mixing zones in its waters. He supported the sunset section (e) in 3-5 years and monitoring at the point of release. He has three major concerns: one is that he fishes in waters where cruise ships are transiting. So he is concerned with how their discharges affect his nets, with how they pollute our waters and they affect public perception in the marketplace of how pristine our waters are. 5:22:58 PM PAULA TERREL, Alaska Trollers Association, said she and her husband had been commercial fisherman in Southeast Alaska for 30 years. She complimented everyone on the compromise in HB 134, but, she said, section (e) on the mixing zone waivers needs a sunset. She said if the industry for some reason can't implement the technology, the sunset provision could be extended or removed later, but for now there needs to be a level playing field. 5:24:45 PM KARLA HART, representing herself, Juneau, asked to give the industry no more than seven years from the date the Alaska voters passed the cruise ship initiative for compliance. The cruise industry excels at marketing and public relations, and the will use the economic crisis and its impact on tourism to give them added leverage in asking to roll back elements of the voter-approved initiative. She has worked around Alaska tourism since the 1960s; she served on the Alaska Tourism Marketing Council in the 1990s and regularly follows the cruise industry and Alaska tourism as a matter of interest. Although there appear to be quite a few cruise industry players in Alaska, it boils down to three; of those, Carnival Corporation has about two-thirds of the ships operating under the Princess, Holland America and Carnival brands. Carnival is a publicly traded company; and this is one company that has the resources to actually get this technology. Carnival's 2008 annual report indicated that globally they have $33 billion in assets, 88 ships, capacity of 170,000 passengers, 86,000 employees; they transport over 8 million passengers with revenues of $14.5 billion, and have a net income of $2.3 billion. They have over $9 billion of vessels on order as they "continue to grow their global footprint" as they say. Alaska voters said they don't want that global footprint rimmed with sewer sludge and toxic waste. Cruise lines have the resources to address this but they lack the will. Their 2008 report said they are improving fuel efficiencies, reducing their carbon footprint and helping their bottom line. The problem is that meeting clean water standards does not improve the corporate bottom line. She stated that Mick Aaronson, Carnival's, largest single shareholder, recently announced pulling a ship from Alaska in 2010 due to the $50/head tax also included in this voter initiative. She believes this is part of their announced cost- cutting measures that include leveraging all ships for purchasing and negotiating contracts in Alaska. It's a game of strategy and strategic investment. If he took all of his ships and went home, Alaska tourism would survive. There would be a crisis for the businesses that have become dependent on cruise lines, but there would also be an opportunity to restructure Alaska tourism from current monopolistic foreign controlled tourism to a diverse resilient locally owned and controlled tourism economy. 5:28:02 PM JOHN BINKLEY, President, Alaska Cruise Association, said the volumes the cruise ships discharge is relatively low compared to municipal systems. The ships are not in a line and discharging in spurts one after the other. They discharge continually whether at dock or under way; as they produce the clean water it is discharged from the ship. Because it is extremely clean it is allowed to discharge continuously with a few exceptions, one being Glacier Bay. An EPA study indicated that an average ship discharges about 143,000 gallons per 24-hour period -compare that to communities like Juneau that discharges over 9 million gallons in a 24-hour period. It would take 53 cruise ships parked in Gastineau Channel to equal what Juneau puts into the channel in one day. MR. BINKLEY said copper is another item of concern and cruise ships under the existing regulations produce far less than communities in Southeast or Southcentral Alaska. The amount of copper in parts per billion is much lower in any given gallon that goes out and the gallons are far lower. It's disconcerting to him to hear so much concern from the fishing industry, because it is very important to the visitor industry and cruise ships specifically to maintain clean pristine waters, not only for Alaska, but for the world. That is the livelihood of the ships, and if they don't maintain that they are out of business, just like those in the fishing industry. He said they take great pride in bringing visitors to Alaska to promote wild clean Alaska seafood. Many cruise lines buy millions of dollars of seafood and promote it so that people who go home have a desire to continue to buy Alaskan seafood. He said it's simply not true that cruise ships are polluting the waters of Alaska. 5:31:51 PM Further, Mr. Binkley said that sunsetting provision (e) will have the exact opposite effect. Industry has already invested over $200 million complying with the initiative would have no further incentive to invest if a set standard is not attainable. Instead they investment in getting around Alaska regulations by holding more waste water, altering itineraries to discharge in waters beyond Alaska and simply ignoring the permitting system that Alaska has in place. He opposed the amendment and supported allowing the compromise to go through as it is, so the industry can continue to work with the regulators to improve their existing systems. 5:33:20 PM GERSHON COHEN, Campaign to Safeguard America's Waters (CSAW), said he is one of the sponsors of the cruise ship ballot initiative, Haines, and he studied the issue of mixing zones for nearly 20 years. At the last hearing there was a lot of talk about the mechanics of mixing zones - how much pollution can be absorbed, how big a mixing zone should be, who has mixing zones, the impacts, et cetera. Unfortunately, most of these questions cannot be answered with any certainty, because mixing zones are not a matter of science where you control a set of conditions, change one thing and make observations. Mixing zones are a risk analysis with a laundry list of variables. For each ship and course setting you need to know the size of the mixing zone, the rate of the discharge, the speed and design of the ship, the water body depth, temperature, salinity and topography, the number of ships discharging in the same area, the chemical relationships between multiple pollutants, detailed profiles of local biota in terms of tolerance potential for avoidance and proximity to a ship, whether someone is harvesting and consuming contaminated organisms, how the food will be prepared, and on and on. DEC has never to his knowledge answered most of these questions when approving a mixing zone nor does it routinely measure pollutants at the boundaries of a mixing zone or the impacts within it. The bottom line is the benefits of mixing zones are received by the polluter; but the risks are borne by the public. He said it's not true that this bill is an acceptable compromise to all parties. The point of discharge phrase was reinserted, but the original concept has been replaced with a temporary waiver provision and no sunset date. In practical terms, without a deadline there is no incentive for the rest of the ships to improve performance. Contrary to what was said a few moments ago, nearly one-third of last summer's sampling events demonstrated ships can meet the so-called impossible standards. DEC has documented that the technologies exist to meet the water quality standards, although some need to be reconfigured to fit on a ship. MR. COHEN concluded that he thought a compromise and the fundamental principal of the bill can be reached if it contains a reasonable sunset of the temporary waiver provision. Then the sponsors of the cruise initiative will support the bill. 5:36:43 PM ROD PFLEIGER, Manager, Membership and Community Relations, Alaska Cruise Association, said the complications of a sunset to an ongoing business for planning purposes and itineraries will continue to add a negative impact on the family businesses throughout the state. Forty-five communities, including governmental agencies, the Alaska Municipal League, the Southeast Conference, and approximately 30 other organizations represented by communities from chambers and visitors bureaus, throughout the state have agreed on CSHB 134(RES) without a sunset clause for (e). 5:38:35 PM TAMMY GRIFFIN, Alaska Hotel Lodging Association, said she is a director of operations for a hotel management company that has eight hotels in Alaska. She is a life-long Alaskan and cares about keeping the tourism industry healthy. She is having a very difficult time understand why they are not allowing the regulatory agency, DEC, to manage such things. Why let a ballot initiative create laws when DEC manages from a scientific point of view? It is not a mere threat that ships can be leaving Alaska because the return on investment is not making sense. She supported CSHB 134(RES) without the sunsetting provision (e). TIM JUNE, representing himself, Haines, AK, said he was originally on the cruise ship initiative committee and has been a member of two Governor's Water Quality Task Forces, has been a commercial fisherman for 25 years in Southeast Alaska, and was a 2001 special assistant to Governor Knowles for Oceans and Watersheds. He encouraged the committee to respect the voter initiative that passed by 58 percent, but more significantly it passed with one side spending$8,000 while the cruise industry spent $1.4 million. There is tremendous passion behind passing this initiative. He addressed the issue of copper, specifically, saying the aquatic life standard for copper is 2.9 parts per billion. It is significant in that a 2001 study showed that cruise ships were putting about 7100 parts per billion before treatment at the high end, for an average of 850 parts per billion. The point is that copper "totally screws up" a salmon's olfactory senses and their ability to come back to where they were born and to ward of predators. The presence of high copper levels is very significant and they should not let it be discharged into a mixing zone. MR. JUNE reminded them that these ships are mobile dischargers, they are not like a town or city where they know what the discharge point is. They discharge commonly in waters that are frequented by sensitive life cycle of salmon fry that are even more sensitive to copper. He said they can use the existing DEC variance position until this technology is available to ships. It is available to land- based systems now. They have ways to get rid of the metals and the ammonia, but it has to be adapted to the ship. It is good for the DEC to work with the industry and the sunset clause is very important to do that. In closing, he reminded the committee that this industry has been very successful in terms of major campaign contributions and has access to the legislature. CO-CHAIR MCGUIRE responded that many people who have testified here on this subject also have offered campaign donations, and they appreciate his testimony. 5:44:58 PM CO-CHAIR MCGUIRE closed public testimony. CO-CHAIR WIELECHOWSKI moved to adopt Amendment 1 identified as 26-LS0570\W.3. 26-LS0570\W.3 Bullard AMENDMENT 1 OFFERED IN THE SENATE BY THE SENATE RESOURCES COMMITTEE TO: CSHB 134(RES), Draft Version "W" Page 1, line 11: Delete "if the" Insert ". The" Page 1, lines 12 - 14: Delete ", in consultation with its science advisory panel on wastewater treatment, determines that compliance with those limits or standards is the most technologically effective and economically feasible" Insert "shall establish and consult with a science advisory panel on wastewater treatment to evaluate the most technologically effective and economically feasible treatment options." Page 2, following line 18: Insert a new bill section to read:  "* Sec. 3. AS 46.03.462(b), as amended by sec. 2 of this Act, is amended to read: (b) The minimum standard terms and conditions for all discharge permits authorized under this section require that the owner or operator (1) may not discharge untreated sewage, treated sewage, graywater, or other wastewaters in a manner that violates any applicable effluent limits or standards under state or federal law, including Alaska Water Quality Standards governing pollution at the point of discharge [, EXCEPT AS PROVIDED IN (e) OF THIS SECTION]; (2) shall maintain records and provide the reports required under AS 46.03.465(a); (3) shall collect and test samples as required under AS 46.03.465(b) and (d) and provide the reports with respect those samples required by AS 46.03.475(c); (4) shall report discharges in accordance with AS 46.03.475(a); (5) shall allow the department access to the vessel at the time samples are taken under AS 46.03.465 for purposes of taking the samples or for purposes of verifying the integrity of the sampling process; and (6) shall submit records, notices, and reports to the department in accordance with AS 46.03.475(b), (d), and (e)." Renumber the following bill sections accordingly. Page 4, line 2: Delete "2014" Insert "2015" Page 4, line 17: It will be difficult because Delete "2014" Insert "2015" Page 4, line 26: Delete "AS 46.03.464 is" Insert "AS 46.03.462(e), 46.03.462(f), and 46.03.464 are" Page 4, line 27: Delete all material and insert:  "* Sec. 8. Sections 3 and 7 of this Act take effect January 1, 2015." Page 4, line 28: Delete "Sections 1 through 5 of this Act take" Insert "Except as provided in sec. 8 of this Act, this Act takes" CO-CHAIR MCGUIRE objected. CO-CHAIR WIELECHOWSKI said he thought this would be a one-line amendment, but it's two-pages. This is a major policy decision; and they need to remember people voted overwhelmingly. This is a compromise to accommodate the industry by adding six years to comply, and they have already had three. This sunset clause will give them nine years to comply from the time voters voted on it. The initiative sponsors support it, the sponsor supports it, and he has been told the Governor supported it at her press conference today. ALPHEUS BULLARD, Legislative Counsel, Legislative Affairs Agency, explained the amendment substantially changes the intent language that prefaces the W version of this bill. Page 1, line 13, of the amendment provides what AS 46.03.462(b) will look like once January 1, 2015 rolls around. The rest of the amendment beginning on page 2, line 14, is conforming language that changes some of the sections dealing with the Science Advisory Committee, making their last report in 2016. On line 22 the amendment repeals AS 46.03.462(f) and AS 46.03.464 all in 2015. He offered to answer questions. SENATOR FRENCH asked how all of those are repealed in 2015, specifically language on page 2, lines 22-24. MR. BULLARD directed him to page 4, line 26, of the version W where section 6 provides that AS 46.03.464 is repealed. This is the section dealing with the Science Advisory Panel. The amendment amends AS 46.03.462(e) and (f); those are the exceptions. Another subsection provides for how the exception to the water discharge standards at point of discharge work. Section 7 provides that all of this will take effect as amended in 2015. 5:50:10 PM CO-CHAIR MCGUIRE announced an at ease. 5:50:22 PM CO-CHAIR MCGUIRE called the meeting back to order at 5:50. SENATOR FRENCH said as Mr. Bullard was reaching the end of his description, he had trouble tracking exactly how the repeal works, and specifically referenced page 4, line 26, [CSHB 134(RES) version W] that says "AS 46.03.464 is repealed," but it gives no date. MR. BULLARD explained that the next line of the bill provides when that section takes effect. SENATOR FRENCH said he got it now. It's the same mechanism for inserting the sunset. MR. BULLARD answered yes. That large block at the beginning of the amendment on page 1, line 13 through page 2, line 10, provides that would occur at the moment those sections are repealed, which brings that provision back into line as it existed before the effective date of this act. SENATOR FRENCH thanked him. 5:52:28 PM SENATOR HUGGINS admitted that he didn't vote for this initiative; it makes him uncomfortable when they do things to the other guy - Juneau has one standard and we have another standard for those who come to visit us if they are riding on a cruise ship. Everyone wants pristine waters; and it disappoints him that fishermen want a different standard for cruise ships. It's a double standard and society has said over and over again "equal opportunity, equal standards for equal people." But he would reluctantly support the amendment, because it's important to move the bill along. 5:54:57 PM CO-CHAIR MCGUIRE added that their job as policy makers is to balance development, the management of the state's resources, the economy, the jobs and all of the things out there. She is also troubled by the prevailing theme in Alaska in the last five years that is anti-industry and anti those who want to spend money and invest in this state. "We do want business," and these cruise ships bring between almost one million people to visit. Jobs throughout Alaska are 100 percent dependent on their participation in its economy. The state is going to see a 40 percent decline in the tourism industry, bankruptcies and businesses closing. Part of it is due to the economy and part is due to the direct impact of the decisions that the cruise ship industry has made with respect to investment in this state. This is the place to argue about it. She agreed with Senator Huggins that she values the pristine waters of our state, but they need to be very careful when they start to impose standards that are not only different and distinct, but technologically impossible. She would not be supporting the amendment, but she understands the sentiment with which it is offered. CO-CHAIR MCGUIRE asked if CO-CHAIR WIELECHOWSKI if he wanted to look at the new version of the amendment. CO-CHAIR WIELECHOWSKI responded that his staff put this language together to help facilitate the dialogue. It places the amendment into the bill; it is not a different version. 5:57:56 PM SENATOR HUGGINS clarified that this is a six-year sunset provision. CO-CHAIR WIELECHOWSKI wanted that verified by Mr. Bullard. MR. BULLARD answered that this amendment moves the sunset date to January 1, 2015. A roll call vote was taken. Senators Huggins, French, Stevens, and Wielechowski voted yea; Senator McGuire voted nay; so Amendment 1 was adopted. 5:59:03 PM SENATOR FRENCH moved to report CS for HB 134(RES), as amended, from committee with individual recommendations and attached fiscal note(s). There being no objection, SCS CSHB 134(RES) moved from committee.