Legislature(2017 - 2018)BUTROVICH 205
03/27/2017 03:30 PM Senate RESOURCES
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SB 92-VESSELS: REGISTRATION/TITLES; DERELICTS 4:25:29 PM CHAIR GIESSEL announced consideration of SB 92 offered by Senator Micciche. She said Alaska's coastal highways have turnouts that have become ship graveyards, and hundreds of derelict vessels pose public safety, environmental, and economic burdens. Finding the right balance between the public interest, rights of property owners, and the balance sheets of communities in the state are addressed by this legislation. SENATOR MICCICHE, Alaska State Legislature, Juneau, Alaska, said SB 92 is really that simple. He said his staff would provide an overview and Ms. Lord would provide a presentation that would reveal the reason for this legislation. 4:26:32 PM RACHEL LORD, Coordinator, Statewide Alaska Clean Harbors Program, Homer, Alaska, provided supportive background for SB 92. She said that this program is now run through the Marine Exchange in Juneau and through it, she worked for years with harbormasters around the state and with the Alaska Association of Harbormasters and Port Administrators. She started off with a story about two vessels - the F/V Leading Lady and the F/V Kupreanof - that had been kicked out of Kodiak and denied entrance to several other ports. This led to both vessels sinking in Kachemak Bay on state tideland waters where they were anchored, which left a sheen of oil in close proximity to commercial oyster farms. On January 18, the Coast Guard raised the vessels and removed pollutants with their authority ending at that point. When it became clear that the owner and responsible party was not going to remove the vessels themselves, DNR impounded the vessels and moved them to Homer. One was demolished; the other was returned to the owner after payment of $11,500 to DNR even though the price tag was at least $40,000 for DNR and $400,000 for the Coast Guard; and she didn't know the cost for DEC. This is not a singular story, Ms. Lord said. Alaska has an aging fleet of vessels and outdated statutes. By 2025 the Alaska fleet will include roughly 3,100 vessels between 28 and 59 feet that are more than 45 years old. The Alaska fleet also includes 75 passenger vessels, tugs, and barges over 50 years old. A 2014 McDowell Group Report on trends and opportunities in the maritime sector considered it a positive highlight for ship building opportunities, but an excerpt from the executive summary paints a different picture of derelict vessels. MS. LORD said the F/V Leading Lady and F/V Kupreanof are classic examples of boats across Alaska. The current reality is one in which it is all too easy to pass on an expensive and aging boat. And the cost of maintaining a boat only increases over time. With the help from the Derelict Vessel Task Force, DNR has begun a derelict vessel data base of 200 vessels, but it isn't complete. Case studies have shown that agencies and municipalities are hamstrung to effectively prevent and manage derelict vessel, and the public ultimately pays the price in money, environmental damage, navigational hazards and loss of aesthetics. Alaska's waters are too often a default dumping ground. An incident in 2012 catalyzed the formation of an ad hoc Abandoned Ad Derelict Vessel Task Force for the state that identified major barriers and solutions to improving derelict vessel prevention and management in Alaska and these are all captured within SB 92. Participation in the Derelict Vessel Task Force was open to anyone interested she said and presented a list of agencies at the table. The municipal law firm of Birch, Horton, Bitner, and Cherot provided pro bono legal assistance for this effort. They represent Kodiak, Cordova, Homer, and other communities and have spent significant time on derelict vessel cases and ordinances to protect their communities. Their help, along with the work of all the other people at the table, and substantial research from other states was instrumental to navigating potential solutions for the myriad of problems raised by derelict vessels around Alaska. MS. LORD said it was an honor to work with these people and facilitate their work. The task force met for nine full-day meetings over the course of two years and identified major problems that were addressed by SB 92. 4:32:48 PM A major barrier to effectively dealing with derelict vessels is a lack of clarity in current law. The course of action is different if one declares a vessel derelict versus abandoned and the impoundment hearing processes are not clear nor are the notice requirements. The definition of the vessel owner also leaves ambiguity. SB 92 addresses these issues and provides much more clarity in AS 30.30, the derelict vessel statutes. Current statutes restrict enforcement of derelict vessel laws. One of DNR's biggest tools is to write trespass notices and those are clearly not enough enforcement. The current penalty of $500 is both not enough and not enforceable. MS. LORD said she has noticed news articles on derelict vessel cases and that the comments are resoundingly in support of response efforts and often ask why state laws aren't more stringent and they clamor for owner liability. In 2015 representatives from DNR and DEC participated in a nationwide derelict vessel workshop held by National Oceanic and Atmospheric Administration (NOAA). They noted that everyone around the country agreed: there is never going to be enough money to remove all derelict vessels. The investment in a point person or program alone is proving to be instrumental in making progress on preventing and better managing derelicts. As a facilitator, every few months she gets a phone call from a community or village somewhere in Alaska asking for advice and assistance on a derelict vessel case. Alaska agency employees are doing this work in different offices around the state with varying levels of familiarity with derelict vessel laws and background. SB 92 proposes establishing a derelict vessel program at DNR allowing for the streamlining of derelict vessel work around the state to improve efficacy and reduce overall costs. She believes this will be a big step forward for Alaska to curb the dumping of vessels in our waters. Vessel disposal must be addressed at some point, Ms. Lord said, and while this isn't necessarily the job of the state it would be beneficial to start looking for vessel disposal options and solutions including conversations with the private sector and municipalities. In other states, people are seeing that it is far cheaper to remove a vessel from the water before it sinks. This could be different in Alaska; however, any sunken and abandoned vessel in Alaska is going to be enormously costly. MS. LORD explained that under the proposed derelict vessel prevention program, the state will have some opportunity to begin asking these questions and considering a suite of possible solutions. Without insurance, when a vessel is abandoned or left to sink on state waters, it can be impossible to find a responsible party. A few harbors around the state are beginning to require insurance of some kind and many others are considering it. Under SB 92, a vessel over 30 feet that is engaged in commercial activity and on the water for more than 90 days would be required to carry a marine insurance policy. If someone is considering a long-term commercial venture on the water and insurance policy will protect the public in the event the commercial endeavor does not work out as planned. This happens often unfortunately. Finally, one of the hurdles to holding vessel owners responsible is establishing ownership. With the Challenger, a 70-year old 96-foot long tugboat that sank in Gastineau Channel in 2015 the bill of sale was written up, but the current and former owners disagreed on who actually owned the vessel. While that will be up to the Coast Guard to deal with, they carried a nearly $2 million bill for dealing with that case. Our agencies and harbors face this run-around on a regular basis. SB 92 proposes establishing more universal registration requirements and a titling system for vessels similar to motor vehicles. Done in other states, these are some common-sense solutions to help improve accountability. 4:37:05 PM MS. LORD said just looking at the Challenger case that happened in Juneau, an excerpt from an Empire indicated that "gosh we really need to do something." It went through some ideas like requiring vessel registration and insurance. At the very least DNR could be granted the simple authority to levy fines on those who pollute Alaska's waters. SB 92 proposes addressing these matters. She said in 2013 a Washington State official said, "We need to find a way to keep these vessels from being abandoned in our waterways, and that means holding owners accountable. Too many people get in over their heads, and their dreams of ship renovation or making money from scrap become a nightmare of the citizens of this state and the marine environment." The quote concludes saying. "A hole in the water into which you pour your money is a famous definition of a boat. To the maximum extent possible, we must ensure the taxpayers are not the ones doing the pouring." 4:38:18 PM MS. LORD said the 16th Legislature knew this was a problem and passed HCR 53 in 1990 saying that many abandoned vessels are grounded on the coast of Alaska and they are a problem that the state doesn't have the financial or statutory resources to deal with, and that communities around the state are also suffering from widespread abandoned vessels. The resolution concludes by requesting that the problems posed by abandoned vessels be studied with recommendations brought forth to the 17th Legislature for legislation necessary to remedy existing problems and prevent future ones. Today she finds herself with the 30th Legislature and SB 92 is necessary to move forward on better managing and preventing derelict vessels around Alaska and she looks forward to their conversation and forward movement on this bill. 4:39:50 PM RACHEL HANKE, staff to Senator Micciche, Alaska State Legislature, Juneau, Alaska, provided a sectional analysis of SB 92. Section 1 requires that a boat placed on state waters must be titled as well as registered and numbered as required in this chapter. Section 2 removes Coast Guard certificate exception and adds language that requires certificate of number on a barge that operated on water for more than 60 consecutive days. SENATOR STEDMAN asked how a documented and an undocumented vessel are going to be treated differently, referring to language on page 1, line 8. MS. HANKE said some vessels are documented with the Coast Guard and it is the intention that those be documented with the state as well. MS. LORD added that was true and that 26 other states require all documented vessels to be registered with the state DMV, as well. Washington is one of those states. Given the size of the problem they suggest expanding the registration requirement to include documented boats, because that will help the state better identify ownership when a boat is abandoned on state lands or municipal harbors. SENATOR STEDMAN said that documentation database is already available and suggested getting more information before increasing regulatory burdens unnecessarily. 4:43:18 PM MS. HANKE said section 3 states that a boat is exempt from this title if it operates in the state for less than 90 consecutive days and has a valid certificate of number; barges that operate for less than 60 days with a valid certificate of number are also exempt. Section 4 adds a new section which directs the Department of Administration (DOA) to adopt regulations and create a system for certification of titles. An individual who purchases an undocumented boat is required to apply for a certificate of title within 30 days. Section 5 adds cross-references. Section 6 increases motorized boat registration for a three-year period from $24 to $30, adds a barge registration fee of $75 for a three-year period, and adds a boat title fee of $20. Sections 7 & 8 add definitions. SENATOR STEDMAN remarked that this bill has some issues. CHAIR GIESSEL agreed and added that they would be addressing it for quite a while. SENATOR STEDMAN said language on page 4, line 6, talks about a barge and asked if that is a freight barge and if it would include a fuel barge. MS. LORD said the intention is to include all barges. MS. HANKE said sections 9 & 10 clarify and simplify existing statute. 4:45:15 PM Section 11 provides that a person found guilty of abandoning a vessel is guilty of a class B misdemeanor that is punishable by one or more of the following: a fine of no less than $5,000 and no more than $10,000, up to 90 days in jail, or forfeiture of the vessel. SENATOR STEDMAN asked her to elaborate on who would be exposed to the classification of misdemeanor and the fine. MS. LORD replied it would expose the person who violates the statute. 4:47:30 PM LINDA BRUCE, Legislative Legal, Alaska State Legislature, clarified that a person could be found guilty of violating this section if they store or leave a derelict vessel on the waters of the state (section 9) without the consent of the state agency or municipality or dock at any private property without consent of the owner. SENATOR STEDMAN said all submerged lands are owned by the state and are its navigable waters. He said the curious issue is that some people own derelict vessels and let them sink in the harbor or take them out and let them sink on the beach, and they don't have $5,000. One of the biggest challenges is that a boat ends up going to the lowest economic common denominator in its final days. SENATOR MICCICHE said reminded the committee that this section is amended, but it was always a misdemeanor that was punishable by a fine of not less than $500 or more than six months, or by both. It was changed to a higher fine, but a lower time. They don't want to be the heavy hand of law, but the spirit of the bill is to make someone accountable other than the municipality or state for a vessel sinking in one of our harbors. MS. HANKE said section 12 allows the department or a municipality to report violations to the Attorney General for enforcement. Section 13 adds new a section which allows an aggrieved person to file a civil injunction. Civil penalties of not more than $1,000 can be imposed for each violation. Each day a violation occurs constitutes a separate violation. Section 14 allows the department to provide written authorization for a vessel to be left within 30 days and clarifies language. Section 15 states that at least 30 days before impounding a vessel, the impounding authority shall post a notice on the vessel, and on the state's or municipality's website. It adds language to allow use of an address on file with the Coast Guard or Department of Administration and moves notice specifications to section (b). Section 16 adds new subsections that establish notice specifications and defines the procedure for pre-impoundment hearings. The owner can file within 15 days after the post- marked date of the notice. Section 17 adds a new section to establish notice of a disposition procedure. Section 18 provides clear guidelines for dealing with a vessel after being impounded by the state or a municipality. Section 19 removes the requirement that an interested party taking possession of a vessel pay expenses incurred and post security. 4:48:00 PM SENATOR STEDMAN said the 30-day notification in Section 18 seems short for finding someone, and asked why it is so short. SENATOR MICCICHE answered that this bill was processed by a large stakeholder group that deals with these issues all the time, and if those timelines are not appropriate it's in the members' hands, but he hoped they would allow a stakeholder explanation. BRYAN HAWKINS, Harbormaster, Alaska Association of Harbormasters & Port Administrators, City of Homer, Alaska, said the timeline for impoundment was thoroughly researched by the attorneys that provided the pro bono help for this task force. It's a 30-day notice of intent of impoundment and then another 30 days takes place before the second notice of impoundment is delivered. 4:53:35 PM MS. HANKE said section 20 establishes the procedure for the immediate impoundment of derelict vessels that pose an imminent threat to safety. Section 21 adds new a section that states the individual who owns an impounded vessel is responsible for all costs incurred in the process. 4:53:59 PM Section 22 adds a section that will require insurance for commercial vessels over 30 feet in length and are operating on state waters or docked at state or municipal harbors for more than 90 days. SENATOR STEDMAN said in trying to deal with the expense of derelict vessels in the harbor, harbormasters have indicated that insurance companies require a survey every few years to get coverage. If the boat can't pass the survey, the insurance company won't insure it. All that's required is a requirement that the vessel in the harbor has to show proof of insurance. The issue then becomes where they go when they go out of the harbor. The requirement for the insurance policy to show cost of removal needs to be looked at, he said, because that could possibly start incurring additional insurance costs to the boat owners. For instance, the Juneau Harbor Department requires him to have insurance, and if he doesn't it would put him into another fee structure. If the boat isn't insurable that would tip them off to a problem. SENATOR MICCICHE said one can look at the bill as a snapshot in time today or one can look at it as a comprehensive plan for vessels that are 100 percent shiny off-the-line with the thought of when they become derelict vessels, which is where the exposure lies for municipalities and the state. That is when they want them dealt with. 4:58:39 PM MS. HANKE said section 23 simplifies the guidelines for identifying a derelict vessel. Section 24 directs the department to establish and administer a derelict vessel prevention program. It establishes the duties and powers of the department and establishes a program fund. Section 25 adds "floating facility" to the definition of vessel. Section 26 adds definitions. Section 27 names this chapter the "Derelict Vessels Act." Sections 28 & 29 add sections to Title 37, which allow for registration and titling receipts, civil penalties, money received from sales, donations, and other receipts to be deposited into the Derelict Vessels Program Fund. Section 30 removes repealed sections, which will allow the fund to remain without federal funding. Section 31 repeals sections. Section 32 directs the Department of Natural Resources and the Department of Administration to adopt necessary regulations, and these regulations take affect under the Administrative Procedure Act. 4:59:52 PM Section 33 requests the revisor of statutes to change two headings. Sections 34-37 establishes effective dates. SENATOR STEDMAN asked if "floating facilities" on page 14, line 15, include float houses. 5:00:23 PM MS. BRUCE answered that "floating facility" is broad enough to encompass float houses. 5:00:59 PM MS. LORD commented that the term "floating facility" is used in DNR's management area plans. Those plans include float houses, float camps, floating structures within that floating facility. It is important that float houses are explicitly covered under this bill and if the definition of floating facility does not fully cover that, then an expanded definition should be found. SENATOR STEDMAN asked how section 22 requiring insurance interplays with float houses. 5:02:28 PM JOE MCCULLOUGH, Office of Boating Safety, Department of Natural Resources (DNR), Anchorage, Alaska, answered the didn't know how they intersect, but the definition of "vessel" is anything used for transportation on the water. He didn't know that a float house would necessarily meet that unless it was moving around on the water. If it's anchored up and people are just living in it, and it's not used for transportation, it's not going to be a boat or a vessel. SENATOR STEDMAN said line 15 on page 14 changes the definition of "vessel." CHAIR GIESSEL said she was certain that the bill sponsor and Senator Stedman would be in touch with him. SENATOR MICCICHE said the numbering and registration provisions have an exemption for a boat that is not equipped with mechanical propulsion and then it would have to be 30 feet or longer to be in the insurance section. It would have to be engaged in commercial activity. So, he thinks there are a couple of ways that float houses are left out of the bill, but that could be clarified. 5:05:21 PM SENATOR HUGHES said she lives in a district where one might think derelict vessels are not an issue: Chugiak and Palmer. However, a ship built in 1912 in Seattle was brought up to Ketchikan and used as a fish tender there and in Port Graham. After the earthquake, it was used to rescue 43 individuals on Kodiak Island when there was concern about a tsunami. Then sometime in the 80s, Till Wallace from Chugiak saw it in Homer. Even though it was quite old at the time, he brought it into Chugiak where it now resides along the old Glenn Highway between the Birch Wood exists. It's become somewhat of an icon and a place where folks take photographs. She asked if they should be concerned about if a community really wants a derelict vessel or will someone be fined $5,000. SENATOR MICCICHE said it sounds like that vessel is on private property and this bill does not deal with vessels on private property. SENATOR HUGHES responded that it was recently moved to property owned by the volunteer fire and rescue department, and therefore may be on public land. If it is, would it then apply? SENATOR MICCICHE said he would do further research, although he was comfortable with "no." The intent is to protect our waterways from state and municipal expense in removing derelict vessels. SENATOR HUGHES said she would like to reassure her community. CHAIR GIESSEL found no further questions for the bill's sponsor and held SB 92 in committee.