Legislature(1999 - 2000)
01/29/1999 03:25 PM House L&C
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 32 - EXTEND BOARD OF MARINE PILOTS
Number 0049
CHAIRMAN ROKEBERG announced the committee's first order of business
was HB 32, "An Act extending the termination date of the Board of
Marine Pilots."
JOE BALASH, Legislative Researcher to Representative Gene
Therriault, Alaska State Legislature, came forward to present HB
32. He apologized for Representative Therriault's absence,
indicating it had been necessary for Representative Therriault to
travel back to the Fairbanks area because of the extremely cold
weather that area had been experiencing. Mr. Balash read the
sponsor statement into the record:
"Under current statutes the Board of Marine Pilots (BMP)
will terminate on June 30 of this year. A report
released by the Legislative Budget and Audit Committee
recommended that the Legislature extend the board's
termination date to June 30, 2004. House Bill 32 does
just that.
"Controversies surrounding the board during the previous
review period have substantially improved. Issues
relating to competition, training, and tariff-setting
have not been totally resolved, but there is a great deal
more consensus between the board, the pilots and shippers
that are subject to the board's oversight. Amendments
made to the Pilots Statutes in 1995 have created a
semi-competitive environment in which the board only
intervenes when there are objections to rate changes.
Resolution of these issues has enabled the board to
concentrate more on the public safety aspects of its
mission rather than legal confrontations that hampered
its activities from 1990 to 1994.
"The regulation and licensing of qualified marine pilots
benefit the public's safety and welfare. The steady
increase in tourist passenger ships in recent years has
made the board's role increasingly more important. The
board provides reasonable assurance that the individuals
licensed to pilot passenger and cargo ships in Alaskan
waters are qualified to do so."
MR. BALASH noted he believed the bill packets included letters from
three of the marine pilot associations in support of HB 32's
passage.
Number 0237
CHAIRMAN ROKEBERG asked if there were any questions of Mr. Balash.
There being none, he invited the next witness forward.
Number 0269
CAPTAIN TOM DUNDAS, President, Alaska Marine Pilots, came forward
to testify in support of HB 32. He stated his organization served
in Western Alaska: the Aleutian Islands, Bristol Bay and the
Arctic. He offered his organization's support for the bill as it
was written, and complimented the chairman of the pilot board and
its members, as well as the marine pilot coordinator, for the job
they had done over the past four years. He mentioned regulations,
and indicated he thought the board was working in the public
interest.
Number 0342
CAPTAIN JEFF BAKEN, President, Alaska Coastwise Pilots Association,
came forward next to testify in support of HB 32. He stated they
were one of the two groups competing in Southeast Alaska, and they
had been closely involved in many of the contentious board issues
in the early 1990s. He indicated the board had mainly resolved
those issues, commenting that the board had improved its function
"quite to our satisfaction." He said his organization thought the
board provided a valuable service to the state, the environment,
and the safety of shipping. He spoke in support of HB 32 to renew
the board.
Number 0391
CHAIRMAN ROKEBERG mentioned the protracted 1995 legislative
hearings in that committee and in the Senate, recalling the
excellent leadership of the then Senate President in bringing the
issue to closure. He asked Captain Baken if he could tell the
committee how the resulting change in policy and statute had worked
out and if it was working well.
CAPTAIN BAKEN replied it was working very well. He indicated the
board's function now appeared to be one of overseeing compliance to
those regulations and maintaining knowledge of the issues involved.
Captain Baken said a lot of the hard feelings had been resolved and
things were working much better.
Number 0485
PAUL FUHS, representing the Southwest Alaska Pilots Association,
came forward next to testify in support of HB 32. He stated they
were the group that brought the tankers into Prince William Sound
and Cook Inlet, and also operated in Kodiak. He spoke in support
of HB 32, noting he thought the last legislation passed had struck
a good balance. Mr. Fuhs said, "The state requires marine pilots
but yet it's a commercial activity that helps facilitate commerce
in the state, so it's important that the negotiations be fair, the
ability for groups to compete, and also the board's ability to take
an appeal from industry if they feel that ... proposed pilot rates
are out of line - put some 'box ends' on this that creates a fair
negotiating system - and I think that's what's really made it
work." Mr. Fuhs indicated he thought they would also see reduced
expenditures, even though the program was funded through program
receipts, because every time the pilots' board had to spend more
due to lawsuits, et cetera, those expenditures showed up on the
state's budget as a plus. He said this made it harder for the
legislators to show a reduction in the budget. Mr. Fuhs said he
thought it had worked all around to everyone's benefit and
reiterated his organization's support for the legislation.
Number 0574
[THERE WAS SOME DISCUSSION REGARDING WITNESS ORDER.]
Number 0613
JOE KYLE, Executive Director, Alaska Steamship Association, came
forward next to testify in support of HB 32. He commented his
organization had submitted a letter indicating their support of the
legislation. Mr. Kyle paraphrased the last paragraph of that
letter, stating, "Since 1995, the public, pilots, and industry are
being well served by the board and the marine pilot statutes. It's
our view that stability and cooperative working relationships are
the norm .... Any amendments that would change any aspect of the
current marine pilots statutes or ... House Bill 32 would likely
disrupt the current harmony we enjoy." Mr. Kyle commented he was
not referring to an amendment that would change the extension date;
he indicated all sides agreed the law and board were working very
well in their current forms. He indicated the situation in the
industry was much better than it had been prior to 1995. He said
the primary difficulty had been how money issues were to be
resolved and the Act had done a great job of enacting a process
that kept the money issues more or less out of the board, but gave
the board the opportunity to adjudicate money issues if they were
not resolved by the parties. He mentioned the board did have to
get involved in two early test cases after 1995, but since then
they had been able to amicably to resolve money issues between the
pilots and industry. He referred to a situation as recent as that
Wednesday between his organization and the Southwest Alaska Pilots
Association. Mr. Kyle noted the vocalism of the rather small
constituency base and encouraged the committee to move the
legislation in its current very succinct form.
CHAIRMAN ROKEBERG commented he took Mr. Kyle's comments to heart,
inferring he well remembered the 1995 hearings.
Number 0800
REPRESENTATIVE MURKOWSKI observed it appeared everyone had reached
this tentative peace at least for the purpose of addressing the
board's sunset. She asked if there was anyone opposed.
MR. KYLE said he didn't think so, noting that although the public
was not represented at the hearing, a Mr. Ken Kastner (ph) attended
the board meetings and very much looked out for the public interest
in front of the board. He commented he thought the public
supported the board extension, reiterating that he thought the
board was working extremely well and indicating he felt the board
chairman, Jeff Bush, was largely responsible for the board's good
performance. Mr. Kyle commented there had been good appointees
from the public, pilot, and industry sides, and the chairman had
been doing an excellent job of making them all work well together.
Number 0875
CHAIRMAN ROKEBERG asked if the number of incoming pilots was
sufficient to meet the potential demands of the growing cruise
industry in Southeast Alaska.
MR. KYLE replied that the short answer was yes, noting there was
some lost traffic volume in general cargo in the state primarily
related to timber and fishing. He agreed there had been increases
in cruise traffic, but said that had been somewhat ameliorated by
the replacement of more smaller ships by a few large ships. He
indicated, therefore, the demand for pilots had stayed fairly
constant but said it was always an area which had to be watched.
Mr. Kyle commented a dramatic growth in shipping or a dramatic
downturn would both really impact the pilots.
CHAIRMAN ROKEBERG commented a dramatic growth and the inability of
the pilots to service it could have a negative impact on the
economy.
MR. KYLE agreed, noting the pilot training program was very
extensive, stating, "It's just hard to grow pilots overnight."
CHAIRMAN ROKEBERG said it was unfortunate the near-demise of timber
in Southeast Alaska was offsetting any other further demand. He
indicated the committee would now hear testimony from the
Department of Commerce and Economic Development (DCED).
Number 0972
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development, came forward next
to testify in support of HB 32. She introduced Peter Christensen,
a division employee and the marine pilot coordinator. She
explained this meant Mr. Christensen was the staff person to the
Board of Marine Pilots. Ms. Reardon noted, for the new committee
members' information, that boards did not have their own offices,
staffs or budgets. Instead, in Alaska, the Division of
Occupational Licensing provided all administrative and staff
support to the state's approximately 21 licensing boards. She said
they were strongly in support of the board's extension and HB 32.
Ms. Reardon indicated one of a board's essential roles was to
provide expertise in the subject area; without a board the
department would be responsible for licensing, regulating, and
governing a subject area without the necessary expertise. She
stated the role of the board was to write the regulations, make
ultimate licensing decisions, and make disciplinary decisions when
the division had investigated and believed a pilot had violated the
licensing law or was incompetent in some manner. She emphasized
that the boards were essential to the licensing program. As the
statute mandated, like all licensing programs, the department set
licensing fees for marine pilots so that the fees approximately
equaled the regulatory costs of the profession. Ms. Reardon said
occupational licensing did not contribute to the budget gap; when
costs went down for a profession, the licensing fees were lowered
and vice versa, all through regulation by the department. She
noted marine pilot licensing fees had decreased significantly that
year, primarily because the amount of legal activity - resulting
Department of Law billings, court appeals, investigations, et
cetera - had greatly declined. She stated she would be happy to
answer the committee's questions, referring any questions about the
details of marine pilotage to Mr. Christensen.
Number 1113
CHAIRMAN ROKEBERG confirmed the licensing fees were biennial, as
for other licenses; he asked the fee cycle and current amount.
MS. REARDON replied a two-year license was currently $2,000 and the
fee had been $4,500 the previous licensing cycle. She indicated
they licensed approximately 80 pilots and 6 agents, noting it was
a very small licensing program with a fair amount of resources
dedicated to it, hence the high fees.
CHAIRMAN ROKEBERG indicated he had a question about amount of
allocation to department overhead but would save it for another
day. The chairman asked if Mr. Christensen had anything to add.
Number 1176
PETER CHRISTENSEN, Marine Pilot Coordinator, Division of
Occupational Licensing, Department of Commerce and Economic
Development, testified that the board had discussed the sunset
audit and also the legislation at its last meeting. He stated that
the board supported the legislation. Mr. Christensen emphasized
the board was in favor of the legislation without amendments.
CHAIRMAN ROKEBERG referred to information in the audit regarding
the implementation and establishment of a database, asking Mr.
Christensen to tell the committee something about that and how it
would be funded.
Number 1202
MR. CHRISTENSEN replied it would not really present any additional
costs, noting there were two different databases described in the
audit. The first one was a vessel traffic database; the board
needed that information in order to make good choices when it set
training requirements and similar things. Mr. Christensen said
that information had always been gathered through quarterly reports
submitted by the pilots' associations. He indicated regulations
had gone into effect January 23 to allow those reports to be
submitted electronically, rather than in differing paper formats,
and inserted into a database, which would allow much greater
ease-of-use. He said the second type of database was one of human
factors involved in piloting. Mr. Christensen commented this was
something which did not really exist anywhere; the audit noted that
the "Alaska Oil Spill Commission" following the Exxon Valdez [oil
spill], when chaired by Mr. Parker, had not been able to find
anything regarding human factors for piloting, or even for
mariners.
Number 1274
Mr. Christensen stated they had a program and legislative money to
develop and implement a simulator-based evaluation program for
pilots. He noted this was "kind of leading-edge in the industry,"
indicating no such thing currently existed. He said there were
many simulator facilities but none offered this kind of program.
Mr. Christensen stated they had let a contract with a simulator
facility. He indicated he believed during the development of their
program, the simulator facility was going to have to determine some
of the human factors involved in piloting; they were going to have
to determine exactly which factors were involved in the pilots'
decision-making process and performance. Mr. Christensen
continued, "So, the development of that contract and the use ... -
as the pilots go through that - the database I think we build there
may eventually build a database of human factors that we can work
on in the future, or from."
CHAIRMAN ROKEBERG asked if part of the goal or objective there was
the findings or recommendations [of the audit] to develop a
database "against which the competency of both the trainees and the
licensed pilots can be better measured."
Number 1343
MR. CHRISTENSEN stated the objective of the simulator facility was
a simulator evaluation that had to be passed for license renewal.
He noted this was certainly their intent, but had not been put into
regulation yet because they did not have a facility. He confirmed
for the chairman that the appropriation was a capital appropriation
made by a previous legislature and no additional costs or impacts
were anticipated.
CHAIRMAN ROKEBERG asked Mr. Christensen to inform the committee
about what seemed like one of the more problematic areas they were
having in the state: large luxury yachts.
Number 1388
MR. CHRISTENSEN responded that there were increasing numbers of
large yachts coming to the Alaska to cruise the state's waters. He
mentioned Southeast Alaska and Prince William Sound, commenting
that there were lots of beautiful places for cruising and that was
what brought the cruise ships. Mr. Christensen indicated
privately-owned yachts were also attracted. In 1995, the
legislature amended the statute, requiring pilots for
foreign-registered yachts over 300 gross tons. Prior to that all
pleasure vessels had been exempt from pilotage. Mr. Christensen
indicated there were several problems with making that piloting
requirement a practical reality. He commented part of the problem
was that the yachts did not check in with anyone, including the
United States Coast Guard (USCG) or the Board of Marine Pilots. He
said many countries were like this, the yachts could just sail in.
Mr. Christensen noted sometimes checking in with customs was
required, but he commented that nobody was tied into customs very
well. Mr. Christensen stated, "So, we don't know when they get
here. They often do use ship agents, which the larger vessels use,
and ship agents are familiar with the law and keep the vessels in
compliance, but since the yachts aren't touching base with them,
they don't receive that information." Mr. Christensen indicated
one of their solutions was getting the information regarding the
piloting requirement into the general cruising publications; the
first real problem was that the owners of these yachts didn't know
pilots were required, and the second problem was that they were not
very happy when they found out.
Number 1479
MR. CHRISTENSEN said there were several issues there, noting
piloting was expensive even for the large ships. He said that was
why the associations published their rates and industry had a
chance to complain, inferring that piloting was a cost of doing
business for the large ships. Mr. Christensen indicated the
piloting requirement could be anything from a nuisance to a real
financial problem for the yachts, adding that all of Southeast
Alaska was pilotage waters. This meant that if a yacht wanted to
cruise Southeast Alaska waters the pilot would have to live on the
vessel as it cruised through. He indicated this could be very
expensive, and the yacht owners did not like that, whether or not
they could afford it. He indicated it was also a privacy issue.
Mr. Christensen noted, therefore, the yachts were very resistant to
taking a pilot even after being informed one was required. He
described that these boats often surreptitiously sailed away after
being informed of the piloting requirement.
Number 1556
MR. CHRISTENSEN said this led to the third part of the problem:
enforcement. As far as he had been able to determine, he had no
authority under state law to board these vessels, unlike in his
days as a USCG officer. He commented, "They're little pieces of
foreign soil floating at our docks, and you can't just barge on
there without specific legal authority." He described some
experiences with these yachts, how they met him on the dock. He
noted the first step in enforcement, identifying the targets, was
becoming increasingly difficult. He said, "The second problem with
enforcement is that they're gone and enforcement of the statute
becomes a criminal misdemeanor, and it's very hard to drag these
people back into court for a criminal misdemeanor charge." Mr.
Christensen additionally noted he worked in the State Office
Building in Juneau and his enforcement area was the view from his
window. He had no way of knowing what was happening in Ketchikan,
Sitka or Prince William Sound unless someone reported these people.
He commented, "And then the long arm of the law isn't quite that
long." Mr. Christensen related a situation where he had a very
detailed discussion with a gentleman in Prince William Sound; he
said he thought the distance encouraged the man to ignore him.
Number 1634
REPRESENTATIVE HARRIS asked if there had ever been an accident
concerning one of these large pleasure boats due to the lack of a
pilot on board familiar with the waters.
MR. CHRISTENSEN replied the only yacht casualty he was aware of was
the motor vessel Bon Aire (ph) in the late 1980s or early 1990s.
Mr. Christensen related that the yacht had ran aground somewhere in
Southeast Alaska and the vessel ended up being a total loss. He
indicated that vessel had been owned by the original owner and
creator of the "Super 8" motels who now had another yacht he
brought to Alaskan waters.
REPRESENTATIVE HARRIS asked if insurance companies for these large
vessels were possibly looking at that as a default of the insurance
policy, if state law was violated.
MR. CHRISTENSEN responded he thought United States (U.S.) insurance
companies would examine that, but he commented most of these
vessels were foreign-flagged, with full, licensed (but not
U.S.-licensed) crews. He indicated he didn't know the exact terms
of these vessels' insurance, but he doubted their insurance
companies were likely to learn that Alaskan law had been violated.
He commented it was an excellent question.
Number 1720
CHAIRMAN ROKEBERG asked Mr. Christensen, to the amusement of many
present, if it was his testimony that pleasure boats had a better
safety record in the state than pilots.
MR. CHRISTENSEN answered in the negative.
Number 1732
CHAIRMAN ROKEBERG referred comments on the fiscal note to Ms.
Reardon, stating, "I'm just looking at the fiscal note just make
sure I have a full understanding of it, and looking in the back it
indicates columns for FY [fiscal year] 97 and 98, and this is the
average annual cost column of 112,000 referring to page 1 as the
amount for FY 99. Does that mean that the biennial cycle is
99-double aught [1999-2000] ...?"
MS. REARDON replied that was the licensing cycle for that
profession, but said she had really been trying to indicate what
the costs were for the two most recent fiscal years, rather than
what the license fees were based on, so the committee would have a
sense of what the savings to the state might be if [the board of]
marine pilots was eliminated. She added that the fees that went
with it would also be lost. Ms. Reardon explained the reason this
had been included, stating, "We have switched, by legislative
request, to presenting zero fiscal notes for board sunset
extensions, and I wanted to make sure that it wasn't misleading ...
yes, it does cost money to run this program, but the money is part
of our base ongoing budget - it's not an increment."
CHAIRMAN ROKEBERG indicated the reason he had asked the question
was because the FY 2000 had not been pointed out, mentioning the
112,000.
Number 1799
MS. REARDON responded that there wasn't a specific year 2000 budget
appropriation because division did not receive separate
appropriations for the separate programs; the division received one
lump sum to run all of its programs. She said she estimated they
would probably spend the average of what had been spent the last
two years, so that would be her year 2000 estimate of how much of
the total division budget would probably be spent on marine
pilotage. In response to questions from Chairman Rokeberg, Ms.
Reardon noted the division had spent $224,000 in direct costs on
the Board of Marine Pilots over the last two years, the average was
$112,000 a year. She indicated they were guessing the per year
expenditures would be the same in 1999 and in 2000, and this was
the basis for the current fees. Ms. Reardon indicated she thought
they had probably received a little bit more than $224,000 for the
past two years, commenting she thought they had a small surplus for
marine pilotage.
Number 1862
CHAIRMAN ROKEBERG asked if there were any further questions of the
Administration, noting they regretted Mr. Bush [Jeff Bush, Deputy
Commissioner, Department Of Commerce and Economic Development] had
been unable to be present. The chairman asked if there was anyone
else who wished to testify on HB 32. There being no one, he
announced the public hearing was closed and asked the will of the
committee.
Number 1880
REPRESENTATIVE HALCRO made a motion to move HB 32 out of committee
with individual recommendations and attached zero fiscal note.
Number 1894
CHAIRMAN ROKEBERG asked if there were any objections. There being
none, HB 32 moved out of the House Labor and Commerce Standing
Committee.
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