Legislature(1993 - 1994)
04/01/1993 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 237 MARINE PILOT LICENSING AND TARIFFS Number 534 JOE KYLE, ALASKA STEAMSHIP ASSOCIATION, made the following points: - The industry supported the 1991 35% increase in tariffs. - The industry supports the concept of two or more healthy pilot organizations. - The industry opposes efforts to place limits on the number of licensed pilots. - The Alaska Steamship Association believes that the present rigid entry level requirements is in itself enough to limit the number of licenses issued. - Once the license is issued, there are strict follow- up requirements, which has a downward effect on the number of licensed pilots. - Regardless of the intent of limiting pilots, its effect is to increase the income of those licensed. - The industry is proud of what they pay pilots. - The Alaska Steamship Association supports removing the tariff setting process from the Board of Marine Pilots, but they are not prepared at this time to support the move to have the APUC (Alaska Public Utilities Commission) take over these functions until more information is known. - The Alaska Steamship Association has a philosophical problem with aspects of a fixed tariff versus a maximum tariff. The current tariff process where industry and pilots negotiate is fine. - Alaska Steamship is concerned about the language in the bill which purports to make equipment a part of the tariff. Equipment is not currently in the tariff, and industry is concerned that this would open the door for pilots to get into other businesses in the marine environment. - Alaska Steamship also objects to the language in the bill that calls for inflation proofing. A pilots income is already high and at those levels there is no need for inflation proofing. - Alaska Steamship intends to submit an amendment to the bill in the near future. (Please note that there is no TAPE 93-32, SIDE B) TAPE 93-33, SIDE A Number 005 CHAIRMAN HUDSON commented that inflation proofing is common when establishing tariffs. Chairman Hudson requested that Mr. Kyle provide more information regarding equipment in the bill to his staff for further work. Number 015 CHAIRMAN HUDSON emphasized that what is considered a region in the Lower 48 usually refers to a major port. But in Alaska it can be several small ports over a vast segment of coastline. Chairman Hudson pointed out that it is his belief that regional knowledge is very important in Alaska. Number 030 CHAIRMAN HUDSON stated it was not his intention to halt a pilot moving between regions, but he wanted safety to be the first priority. Number 050 MR. KYLE added that his group purposely did not address the cross-regionalization in HB 237. Number 065 DAVID MILLEN, ALASKA MARINE PILOTS, testified in support of HB 237 and outlined his groups position: - The only purpose of piloting act is public safety. - The Act ensures safety of shipping. - The 1991 amendments to the pilotage act were good but failed to create an unrestricted free market enterprize system on marine pilotage. - Competition does not exist in pilotage because there is not a large pool of buyers and sellers. - Unrestricted free market pilotage puts pressure on pilots economically to cut corners on safety because they are competing for a limited amount of income. - Fixed tariffs have broad public policy benefits. When statutes impose compulsory pilotage, this bill would require that all pilots would be treated equally. In addition, fixed tariffs would allow the state to continue the policy developed historically of permitting the high revenue ports to subsidize and keep the costs down for the less busy ports. If there are not fixed tariffs and the tariffs are set on a purely competitive basis, the costs would be prohibited and not in the best interest of commerce. - The perception that pilots make high salaries is somewhat misleading. The average income is $100,000 minus taxes, insurance, licensing fees, etc. - Alaska Public Utilities Commission has resources to set fixed tariffs in a fair manner. - The only way to make a fixed tariff work is to set the number of pilots licensed. Number 312 WILL ANDERSON, ALASKA MARINE PILOTS, testified in support of HB 237. He said HB 237 would create and maintain a system that puts safety first. Mr. Anderson echoed Mr. Millin's statements. Number 368 TERRY BENNETT, CO-FOUNDER OF ALASKA COASTWISE PILOTS, testified in opposition to HB 237. Mr. Bennett stated that his group did not ask that this bill be introduced, and as far as he knew, neither did the industry. MR. BENNETT stated that HB 237 says that setting fixed tariff's will allow industry a longer view of the tariff situation, but also allows for the tariff's to be amended at any time. Mr. Bennett stated this is already the case because his group's contracts contain a clause referring to annual adjustment, patterned after those seen in union collective bargaining agreements. With respect to "uniformity of tariffs," MR. BENNETT directed the committee's attention to the state's requirement that pilot groups publish their tariffs and maintain them for at least a year. MR. BENNETT stated he believes that his group has done nothing unfair in its bargaining with industry and that SEAPA (Southeast Alaska Pilots Association) made bad business decisions last year and they want the legislature to make it up for them. MR. BENNETT suggested that if the legislature puts in play a mechanism for a fixed tariff, it will destabalize a bargaining procedure that all participants have haggled over for almost two years. MR. BENNETT said there was no need for a limitation on the number of licensed pilots. State licensure is already self- limiting due to the great difficulty in gaining entry into the profession brought about by the 1991 legislation. There is an element of unpredictability in the attrition rate of pilots due to age, illness or death. He reminded the committee that, as they know, fog in Sitka or Juneau can result in air traffic delays in the summer when as many as half of Southeast's marine pilots may be in transit. MR. BENNETT added that limited entry is discriminatory, unfair, and un-American. MR. BENNETT suggested that limited cross-regional licensing would greatly benefit safety of pilotage in Alaska, particularly in Prince William Sound from the sea to Valdez. (Mr. Bennett's complete statement is on file in the committee office.) Number 500 KARL LUCK, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, testified in support of HB 237. Mr. Luck stated that his division is in the process of auditing all pilotage reports in Southeast to attempt to clarify the picture for the committee. Mr. Luck stated that the report will attempt to be as accurate as possible, but the reporting procedures are not consistent and the job is not an easy one. The report should be available to the committee by Tuesday, April 6, 1993. MR. LUCK stated that the trend is that there was plenty of work for SEAPA during that period. Mr. Luck added that the numbers that Mr. Bennett provided are in the ball park. No action was taken on HB 237. It was held over for a future date.
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