Legislature(2017 - 2018)SENATE FINANCE 532
03/01/2018 09:00 AM Senate FINANCE
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SENATE BILL NO. 92 "An Act relating to abandoned and derelict vessels; relating to the registration of vessels; relating to certificates of title for vessels; relating to the duties of the Department of Administration; relating to the duties of the Department of Natural Resources; establishing the derelict vessel prevention program; establishing the derelict vessel prevention program fund; and providing for an effective date." 9:05:18 AM SENATOR PETER MICCICHE, SPONSOR, invited his staff to the table. 9:05:35 AM AT EASE 9:06:19 AM RECONVENED Senator Micciche he stated that the bill provided the ability to identify ownership of derelict vessels in order to address the vessels before they sunk in harbors and state land. He also stated that there was a portion about insurance to ensure financial capacity. He stated that the current bill restricted it to the ownership. He stated that it would help track the ownership of vessels through titling, and would expand the pool of registered vessels that required titles. He noted that the shorelines were littered with derelict vessels, so the bill provided a simple method to begin to deal with the problem RACHEL LORD, ALASKA ASSOCIATION OF HARBORMASTERS AND PORT ADMINISTRATORS, HOMER (via teleconference), discussed the presentation, "SB 92, Derelict Vessels, Accountability Across Alaska, a presentation to the Senate Finance Committee" (copy on file). 9:08:44 AM AT EASE 9:11:36 AM RECONVENED Ms. Lord highlighted slide 2, "What's the Problem?" "By 2025, the Alaska fleet will include roughly 3,100 vessels between 28' and 59' that are more than 45 years old...the Alaska fleet also includes 75 passenger vessels, tugs, and barges over 50 years old..." Ms. Lord addressed slide 3, "A Guy Walks Into A Bar?": We love our boats, and we depend on our coasts and rivers for transportation, commerce, and quality of life. But there is no denying the immense cost of owning and maintaining a boat. Those costs of owning and maintaining a boat. Those costs only increase over time. Ms. Lord discussed slide 4, "Jakolof Bay, 2012-2013." She stated that on Christmas Eve 2012, two vessels sank under heavy snow load in Jakolof Bay. Those vessels were in a critical oyster habitat area. The boats were purchased and moored on state waters. The vessels were the first vessels that the state impounded under the derelict vessel chapter. 9:15:40 AM Ms. Lord highlighted slide 5, "A Growing Problem": ADNR has begun a database, but it is far from complete. There are nearly 200 documented derelicts across Alaska. We know many more exist, and the number will continue. Ms. Lord displayed slide 6, "The Public Pays the Price": With outdated statues our municipalities and state agencies are unable to effectively prevent and manage derelict vessels. Alaskan waters are a default dumping ground. Ms. Lord addressed slide 7, "Solutions in SB 92": Over a two-year period the Derelict Vessel Task Force identified major barriers and solutions to improve derelict vessel prevention and management in Alaska. Ms. Lord discussed slide 8, "Task Force Participants": Please note that while many people sat at the table, nothing within this presentation or testimony is intended to speak on the behalf of any individual agency, municipality, or task force participant. ADNR, Mining, Land, and Water ADEC, Spill Prevention and Response ADOT, Ports and Harbors ADFG, Habitat USCG, Sectors and Anchorage and Juneau/Division of Waterways Management NOAA, Marine Debris Program/Restoration EPA, Response Region 10 AAHPA (Bethel, Homer) Orutsararmiut Native Council Senator Lisa Murkowski's office Alaska Marine Response Ms. Lord highlighted slide 9, "Registration and Titling": Agencies and municipalities have found establishing ownership is one of the major hurdles to holding owners responsible for derelict vessels. Requiring all vessels operating in AK to be registered with DMV, and beginning a titling system for vessels similar to that in place for motor vehicles, are commonsense solutions to improve accountability. Ms. Lord discussed slide 10, "Increase Clarity": Agencies and municipalities statewide need increased clarity for defining a derelict vessel, vessel ownership, and for the impoundment process including clarified hearing and notice requirements. SB updates Chapter 30.30 to bring clarity and improve utility of the statutes. 9:20:54 AM Ms. Lord displayed slide 11, "Enforcement Authority and Increased Penalties" Current statutes restrict enforcement of derelict vessel laws. One major way to reduce vessel sinkings and prevent owners from walking away is to provide for enforcement of the chapter to hold owners accountable and prevent derelict vessels from sinking on public waters. Ms. Lord highlighted slide 12, "Clarified Liability": Hearing concerns from agencies and the public, Task Force members acknowledged that it is important to be clear that a vessel owner is liable for all costs associated with the impoundment, storage and removal of a derelict vessel. Ms. Lord discussed slide 13, "Streamlined Capacity": Outside states have found significant improvement in derelict vessel prevention and management by streamlining their efforts through a statewide program/point person. Having a point person at ADNR will concentrate work that is currently being done by numerous staff, will reduce overall costs, and increase efficacy of derelict vessel management. Ms. Lord addressed slide 14, "Cradle to Grave": Addressing vessel disposal was outside of the scope of the Task Force, but must be addressed. Through the derelict vessel prevention program, the state will have the opportunity to begin looking at options for vessel disposal, scrap and salvage solutions that cab benefit the private sector and be a reasonable alternative to vessel abandonment. Ms. Lord highlighted slide 15, "Juneau Empire Editorial, October 15, 2015": The Alaska Department of Natural Resources?lacks event the authority to fine?for littering. ?In places like Bethel, which has a dumping ground called Steamboat Slough, the problem of derelict and abandoned boats long ago broke the surface of public awareness. ?we could instead simply mandate the registration of all boats - commercial and recreational alike - through the DMV. We could also mandate that boats of a certain size, like all cars, carry insurance sufficient to cover their salvage. At the very least, we could grant the Department of Natural Resources the simple authority to levy fines on those who pollute Alaska's waters. Ms. Lord discussed slide 16, "Chinook Observer, March 22, 2017": Too many people get in over their heads, and their dreams of ship renovation or making money from scrap become a nightmare for the citizens of the state and the marine environment. 'A hole in the water into which you pour money' is a famous definition of a boat. To the maximum extent possible, we must ensure taxpayers are not the ones doing the pouring. Ms. Lord addressed slide 17, "HCR 53 1990": Whereas the state does not currently have statutory authority to impose liability on the owners abandoned vessels? 9:25:14 AM Ms. Lord highlighted slide 18, "Akutan Dutch Harbor/Unalaska." She stated that there was an article about Akutan in the packet. She stressed that it was the third boat impounded under derelict vessel laws. Senator Olson had been opposed to registration and titling, because he did not believe the smaller vessels were protected. He wondered how to protect the smaller boats from a cumbersome registration requirement. Ms. Lord replied that the smaller boats would have a title. She stated that vessels under five net tons were currently required to register with the state. She discussed the exceptions. Senator Olson wondered whether inflated boats were included. Ms. Lord replied in the affirmative. She stressed that motorized boats were required to register with the state. Senator Stevens stressed that it was a major issue in his community. He felt that it did not deal with the problem directly. He wondered what could be done to help people with an aging boat. He wanted to help people dispose of the vessels. 9:30:55 AM RACHEL HANKE, STAFF, SENATOR PETER MICCICHE, discussed the Sectional Analysis (copy on file): Section 1 Adds titling to the requirements for boats placed on the waters of the state. Section 2 Requires all boats have a certificate of number if operated on the waters of the state for more than 90 consecutive days or 60 consecutive days for barges unless otherwise provided in the chapter. Section 3 Provides exceptions from numbering and registration for boats and barges. Section 4 Adds new section for establishing a system for certification of titles. Section 5 Inserts cross-reference. Section 6 Increases boat registrations for a three-year period from $24 to $30, adds barge registration fee at $75 for a three-year period, adds boat title and duplicate boat title fee of $20. Section 7 Adds definition of "barge". Section 8 Repeals and reenacts definitions from AS 05.25.100. Sections 9 & 10 Clarifies existing language. Section 11 Raises the fine for abandoning a vessel from not less than $500 to not less than $5,000 or more than $10,000 and lowers the maximum term of imprisonment from six months to 90 days. Section 12 Allows the department or a municipality to report violations to the Attorney General in order to enforce criminal penalties. Section 13 Adds new section allowing an aggrieved person to file a civil injunction with a penalty of not more than $1,000 per violation. Section 14 Allows the department to provide written authorization for a vessel to be left within 14 days and clarifies language. Section 15 Changes section to pre-impoundment notice and hearing. Requires 30 days' notice prior to impoundment, requires the impounding authority to post notice on vessel when possible and online. Section 16 Adds new subsections establishing notice specification and defines the procedure for pre-impoundment hearings. Section 17 Adds new section establishing requirements for the notice of disposition. Section 18 New section proving clear guidelines of procedure for impoundment of a vessel by the state or a municipality. Section 19 Removes requirement that an interested party taking possession of a derelict vessel post security. Section 20 Establishes procedure for the immediate impoundment of derelict vessels that pose an imminent threat to safety. Section 21 Adds new section stating that the individual owning an impounded vessel is liable for all costs incurred in the process. Section 22 Provides situations that would make a vessel derelict. Section 23 Gives the department the power to establish and administer the derelict vessel prevention program which includes education, outreach, an advisory council and creates a program fund which consists of money appropriated from donations, vessel sales under this chapter, federal funds, civil penalties and money collected from barge registration and titling of vessels. Section 24 Adds "floating facility" to the definition of "vessel". Section 25 Adds definitions. Section 26 Names this chapter the Derelict Vessels Act. Section 27 Adds titling to Title 37. Section 28 Allows civil penalties collected under AS 30.30 to be deposited to the derelict vessel prevention program fund. Section 29 Removes repealed sections allowing the fund to remain without federal funding. Section 30 Repealing sections of AS 30.30. Section 31 Transition language allowing DNR and DOA to adopt regulations. Section 32 Revisor's instruction to change two headings. Sections 33-36 Effective date sections. 9:35:16 AM Vice-Chair Bishop looked at Section 4, and felt that he might be able to ask the administration a question at a later date. Co-Chair MacKinnon wanted to wait until the public hearing was complete before she asked her questions. Senator Stevens stressed that it was an enormous issue. He wanted to know the costs. He wondered whether there was a survey to understand the cost of the sunken vessels. Senator Micciche replied that there was an Alaska Abandoned and Derelict Vessel case studies document that captures a few of the cases. He remarked that there were some places with many large barges that were on the beach, and the cost for those would be many millions. He stated that the bill was about stopping adding to the collection of abandoned vessels that littered the beaches in Alaska. Senator Stevens felt that the information would be available by contacting communities that experienced the enormous expenses. 9:38:11 AM CARL UCHYTIL, PRESIDENT, ALASKA ASSOCIATION OF HARBORMASTERS, spoke in support of the bill. He remarked that the Alaska Municipal League also expressed support of the legislation. He shared that in Juneau, since 2014, he had impounded over 50 vessels and destroyed 37 vessels. He stressed that it was important to maintain harbors in the state. 9:41:53 AM Senator Stevens understood that the cost of a sunken vessel was much more than addressing the disposal of an floating vessel. He wondered whether the fund was out of the harbormaster fund. Mr. Uchytil replied that he was committed to having a safe, secure, and clean harbor. He remarked that vessels that ended up derelict sometimes were owned by people with the least resources. He remarked that due process was afforded, but there was no derelict "fairy" that would pay for the removal of the vessels. Senator Stevens stated that Section 22 related to education outreach and an advisory council. He wondered whether it would assist in letting the owners know that they could not avoid the responsibility. Mr. Uchytil replied that there was a network among the harbormasters to reach out to the vessel owners. Senator Olson queried the additional authority that was needed for Department of Natural Resources (DNR) to ensure that the disasters were handled before they become worse. Mr. Uchytil replied that the unfortunate consequence of Juneau being assertive and provide safe and secure harbors was the vessel owners would go into DNR lands. 9:46:47 AM Senator Olson wondered whether the bill gave the authority to use the least amount of resources to solve the issue. Mr. Uchytil responded that the bill would help with some of the smaller communities. Senator von Imhof noted that in the fiscal note a portion of the fees would be transferred to DNR each year. She wondered whether that would help to clean up the derelict vessels. Mr. Uchytil replied that the money needed to clean up the vessels was approximately $10,000 to $100,000 per vessel. Senator Micciche stressed that the intent of the bill was to understand the ownership of the vessel to start dealing with the issue before it sinks. 9:49:37 AM BRYAN HAWKINS, HARBORMASTER, CITY OF HOMER, HOMER (via teleconference), spoke in support of the legislation. He stated that Homer had made an effort to clean up or encourage movement of larger vessels. He stressed that there was no more valuable real estate in a community than its harbor, because it was extremely expensive. The purpose of a harbor was to provide mooring for working vessels. Co-Chair MacKinnon CLOSED public testimony. 9:57:21 AM Vice-Chair Bishop wanted to discuss Section 4 with Department of Administration (DOA). Senator Stevens wanted to know about the $2 million cost of a vessel that was alluded to earlier. He wanted to know about the Coast Guard's responsibility. 9:58:27 AM GRAHAM LANZ, COMMANDER, UNITED STATES COAST GUARD, stated that the Challenger that sunk in the Gastineau Channel was a wooden vessel that sank with a large amount of fuel on board. The Oil Spill Liability Trust Fund was open for that clean up, because the vessel's owner lacked the ability to raise the vessel himself. He stated that it was rare that an oil spill response result in a vessel being removed and destroyed. Senator Stevens wanted to address the concern about the vessel in state lands. Senator Olson wondered what other states had done to deal with the issue. Mr. Lanz replied that some other states had created funds, much like the proposal in the bill, to help manage the end of life for the vessels. He stressed that the lower 48 saw more available scrapping facilities and the ease; and retrieval and disposal of the vessels at a much lower cost. Co-Chair MacKinnon wondered how many documented vessels would be subject to the new titling requirements. Senator Micciche deferred to Ms. Lord. Ms. Lord replied that she did not know how many documented vessels were in the state. She stated that there were 5000 to 6000 commercial vessel permits registered with the state. She shared that any vessel over 5 net tons owned by a U.S. citizen could be federally documented. She stated that many of the larger vessels were probably documented vessels. She stated that the harbormaster had estimated that there were probably 10,000 to 20,000 documented boats. Co-Chair MacKinnon looked at page 4, lines 5 through 7. She noted the definition of a barge, and wondered whether flat bottom vessels, power scrubbers, crabbers, and river skiffs would be considered a "barge." Senator Micciche deferred to Ms. Lord. 10:04:02 AM Ms. Lord replied that the definition of a barge was defined by its carrying of cargo. Co-Chair MacKinnon noted that there was some concern that those boats might get subjected into the definition of "barge." She looked at Section 8, page 4, line 15, and wondered whether paddleboats were considered water toys, or need to be registered as a boat. Senator Micciche stated that barges or motorized vessel would require registration. He stated that a paddle boat would be considered a water toy. Co-Chair MacKinnon wondered whether paddle boards would be considered water toys under the definition in Section 8. PETER CALTAGIRONE, ATTORNEY, DEPARTMENT OF LAW (via teleconference), agreed to provide that information. Co-Chair MacKinnon looked at Section 14, and asked whether DNR was online. 10:06:59 AM KRIS HESS, DIVISION OF MINING, LAND AND WATER, DEPARTMENT OF NATURAL RESOURCES, ANCHORAGE (via teleconference), introduced herself. Co-Chair MacKinnon queried the number of estimated permits that were expected per year based on Section 14. Ms. Hess replied that the records were consistent with Ms. Lord's records. Co-Chair MacKinnon stated that the estimate was unsure up to $20,000. Ms. Hess replied in the affirmative. Senator Stevens queried the experience of DNR with abandoned vessels. Ms. Hess replied the case studies from Senator Micciche's office detailed some of the incurred cost for DNR. She recalled that others had testified about how DNR was continually contacted about abandoned and derelict vessels. She stressed that it was difficult to find the owners of the vessels, and there was not much success in making those owners responsible for removing their vessels. Senator Stevens surmised that the information was already provided to the committee. Ms. Hess replied in the affirmative. She stated that the DNR staff time to address the issue was not tracked, but the out of pocket cost was detailed in the case study in members' packets. 10:11:21 AM Co-Chair MacKinnon wondered who would hold the pre-impound hearings, and an estimate of the anticipated number of hearings. Ms. Hess replied that there was only three instances when DNR had taken custody of an abandoned derelict vessel. She stated that she believed that local municipalities had not gone through that process. She stated that the most recent situation was treated as a derelict vessel. Co-Chair MacKinnon noted the indeterminate fiscal note. She wondered whether there could be further examination of the fiscal impact. Ms. Hess agreed to reexamine that fiscal note. Co-Chair MacKinnon looked at Section 22, page 12, lines 2 through 4, in relationship to Section 14. She wondered what would occur should DNR fail to issue a permit for someone who had applied for a permit. Ms. Hess replied it was a fairly fast and streamlined permit process. She stated that the application was posted on the public notice website for fourteen days, and allowed public comment. Once that fourteen days concluded, the comments were adjudicated with regard to issuance of the permit and any conditions that may be included in the permit authorization. She anticipated that DNR would act as quickly as possible. 10:16:38 AM Co-Chair MacKinnon looked at Section 22, page 12, line 22, and queried the recourse of a private land owner with a derelict vessel. Ms. Hess deferred to Mr. Caltagirone. Mr. Caltagirone stated that the private land owner would have a trespass claim directly against the vessel owner. Co-Chair MacKinnon wondered whether the stat would assist the land owner. Mr. Caltagirone replied that it was an issue for a land owner. Co-Chair MacKinnon wondered whether the state would assist, if the vessel was in the waters in front of privately owned land. Mr. Caltagirone replied in the affirmative. Co-Chair MacKinnon surmised that private land owners come at high tide. Mr. Caltagirone agreed. Co-Chair MacKinnon looked at Section 23, and understood that the funds would not lapse. She furthered that DNR could use those funds that collect without further appropriations. She wondered whether DNR would provide grants to municipalities. Ms. Hess replied that DOA would administer the money in the fund, and DNR would administer the program. She stated that local municipalities could apply if they decide to take custody of the vessel. Co-Chair MacKinnon wanted to ensure that Section 23 adequately describes a process for the municipalities and the state us of the funds. She looked at Section 30, page 15, line 1, which removed the private boat yard's ability to exercise current derelict vessel disposal procedures. Senator Micciche deferred to Mr. Caltagirone. 10:21:23 AM Co-Chair MacKinnon queried the reason for the repeal of that portion of state statute. Mr. Caltagirone replied that the statutory provisions were current iteration of the derelict vessel statute. He agreed to provide more information. Co-Chair MacKinnon queried the reason for the repeal. Ms. Hanke replied that private land owners had their own avenues of recourse, so the sections were used for public entities. She deferred to Ms. Lord for more information. Ms. Lord stated that the repeal of Article 3 in the current statute expressly dealt with vessels abandoned on boat repair yards. There was a thought that the language was somewhat misleading. Co-Chair MacKinnon wanted to see how the process would change for the private boat yards under the new statute. 10:25:39 AM Senator Micciche stated that it was not expected that DNR never over spend what was available in the fund. Co-Chair MacKinnon wanted to outline that issue in the bill. ED KING, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, noted that DNR was working on updated fiscal notes. Senator Micciche noted that currently DNR's involvement with a costly removal of a vessel there may or may not be a supplemental request. He stressed that the intent of the bill was about education, outreach, and other issues where DNR could not overspend within the program. Mr. King pointed out that his interpretation of the bill was consistent with the bill sponsor. Senator Stevens surmised that the fund would not be used for the potential to raise a vessel. Senator Micciche stated that the funds could be used to assisting municipality and the state; however the limited number was restricted to education and outreach. Co-Chair MacKinnon announced that amendments were due the following Monday by 5pm. SB 92 was HEARD and HELD in committee for further consideration. 10:29:45 AM AT EASE 10:32:18 AM RECONVENED