Legislature(2007 - 2008)CAPITOL 17

03/11/2008 05:00 PM House TRANSPORTATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change from 1:00 pm --
*+ HB 294 MARINE TRANSPORTATION: BOARD & DIVISION TELECONFERENCED
Heard & Held
+ SJR 12 CRUISE SHIP PORT TIMES: JONES ACT TELECONFERENCED
Moved Out of Committee
SJR 12-CRUISE SHIP PORT TIMES: JONES ACT                                                                                      
                                                                                                                                
5:08:02 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN  announced that the  first order of  business would                                                              
be CS  FOR SENATE  JOINT RESOLUTION  NO. 12(STA), Requesting  that                                                              
Alaska  be  exempt  from  changes to  the  interpretation  of  the                                                              
Passenger Vessel  Services Act of  June 19, 1886, proposed  by the                                                              
United States Department  of Homeland Security, Bureau  of Customs                                                              
and Border  Protection, affecting  cruise itineraries  of foreign-                                                              
flagged vessels  transporting passengers  to ports in  Alaska; or,                                                              
if Alaska  is not exempted, opposing  the proposed changes  to the                                                              
interpretation of that Act.                                                                                                     
                                                                                                                                
5:08:15 PM                                                                                                                    
                                                                                                                                
HEATHER BRAKES,  Staff to  Senator Gene  Therriault, Alaska  State                                                              
Legislature,  presented  the  sponsor  statement  for  SJR  12  on                                                              
behalf  of  Senator  Therriault.   She  stated  that  in  November                                                              
[2007],  the  U.S.  Department of  Homeland  Security,  Bureau  of                                                              
Customs and Border  Protection, published a new  interpretation of                                                              
the   Passenger  Vessel   Services  Act   of  1886.     This   new                                                              
interpretation  would  require  foreign-flagged  cruise  ships  to                                                              
spend [at  least] 48 hours  in foreign  ports and that  the period                                                              
of time spent in  foreign ports amount to more than  50 percent of                                                              
the total  time spent in U.S.  ports of call.   The interpretation                                                              
would also  [permit] cruise  ship passengers  to disembark  at the                                                              
foreign port.                                                                                                                   
                                                                                                                                
MS. BRAKES said  the cruise industry brings more  than one million                                                              
passengers to  Alaska each year  and provides over 40,000  jobs, a                                                              
significant  contribution  to  the  state's  economy.    This  new                                                              
interpretation would  have a devastating  impact on many  jobs and                                                              
Alaskan-owned  businesses in both  coastal and inland  communities                                                              
throughout the  state.  According  to the Department  of Commerce,                                                              
Community, & Economic  Development, the expected  impact to Alaska                                                              
would be  approximately 158  fewer voyages, approximately  349,000                                                              
fewer passengers, and  an expected loss of $222  million in direct                                                              
spending.  She said  SJR 12 requests that Alaska  be exempted from                                                              
this  new   interpretation,  and   that  the  state   opposes  the                                                              
interpretation if it is not exempted.                                                                                           
                                                                                                                                
5:10:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH inquired  whether  the ships  currently                                                              
servicing  communities in  Alaska  can qualify  for the  exemption                                                              
that is  listed in  the Federal  Register, Volume  72, under  III.                                                              
Current Law and Policy, which states:                                                                                           
                                                                                                                                
     (2)  has  been issued  a  certificate  of  documentation                                                                   
     with  a   coastwise  endorsement   or  is  exempt   from                                                                   
     documentation but  would otherwise be eligible  for such                                                                   
     a certificate and endorsement.                                                                                             
                                                                                                                                
MS. BRAKES deferred to Chris Poag with the Department of Law.                                                                   
                                                                                                                                
5:11:45 PM                                                                                                                    
                                                                                                                                
JOHN BINKLEY,  President, Alaska  Cruise Association,  stated that                                                              
the Alaska  Cruise Association's membership  is made up  of cruise                                                              
lines that  bring visitors to Alaska,  as well as  Alaska business                                                              
that rely  on the cruise ship  industry for their livelihood.   He                                                              
said  the  association  supports  CSSJR  12(STA)  and  thanks  the                                                              
committee  for   hearing  the  resolution  and  the   sponsor  for                                                              
bringing  it forward.    The resolution  would  put  the State  of                                                              
Alaska on  record as  opposing this  proposed interpretation  that                                                              
would bring  significant harm to  many communities  and businesses                                                              
throughout the  state.  The  economic impact from  this rulemaking                                                              
would be  devastating to  some Southeast  Alaska communities.   He                                                              
urged the committee to support the resolution.                                                                                  
                                                                                                                                
5:13:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FAIRCLOUGH  reiterated   her  question  about  the                                                              
Federal Register exemption.                                                                                                     
                                                                                                                                
MR.  BINKLEY  said  the  cruise   lines'  legal  departments  have                                                              
studied this  thoroughly and  he has not  heard any mention  of an                                                              
exemption that could  be applied for.  He related  that the cruise                                                              
lines are  hopeful that one of  the following actions  will occur:                                                              
1) the rulemaking  does not apply  to Alaska and is  only specific                                                              
to  Hawaii,  2)   the  rule  does  not  occur,  or   3)  there  is                                                              
legislation  clarifying that  Alaska and  other jurisdictions  are                                                              
exempt from the interpretation.                                                                                                 
                                                                                                                                
5:14:51 PM                                                                                                                    
                                                                                                                                
RON PECK,  President, Alaska  Travel Industry Association  (ATIA),                                                              
informed  the committee  that  ATIA is  a  trade association  that                                                              
advocates  on  behalf of  its  more  than 1000  member  businesses                                                              
involved  in  the travel  and  visitor  industry.   He  said  ATIA                                                              
wholeheartedly  endorses SJR  12.   The proposed  reinterpretation                                                              
would  dramatically  impact  cruise  itineraries  in  Alaska,  the                                                              
visitor experience  in the state, and severely  impact a multitude                                                              
of  independently-owned  Alaska  businesses throughout  the  state                                                              
that  work  with  the  cruise  industry   in  offering  land-based                                                              
experiences  for cruise  visitors.   He  read ATIA's  unanimously-                                                              
passed resolution opposing the proposed federal rule change.                                                                    
                                                                                                                                
5:17:19 PM                                                                                                                    
                                                                                                                                
CHRIS POAG,  Assistant Attorney General, Commercial/Fair  Business                                                              
Section,  Civil  Division  (Juneau),   Department  of  Law  (DOL),                                                              
responded to  Representative Fairclough's previous  question about                                                              
the Federal  Register.  He explained  that what she is  reading is                                                              
the actual  federal law.   However,  what is being  reinterpreted,                                                              
or  formally interpreted  by the  proposed  regulation packet,  is                                                              
the  federal  regulation.    In  the actual  law  the  "or"  being                                                              
referred to  does not modify the  "and" that comes after  (1), the                                                              
first requirement.                                                                                                              
                                                                                                                                
5:18:10 PM                                                                                                                    
                                                                                                                                
MR.  POAG, in  response  to  Representative Johnson,  defined  the                                                              
term coastwise  as meaning that when  a ship stops at  a U.S. port                                                              
it is  a coastwise stop.   He said  this is about  foreign-flagged                                                              
vessels stopping in  U.S. ports and when they are  allowed to stop                                                              
under  this  federal  law.    This  is  a  reinterpretation  of  a                                                              
regulation  that currently  allows for  these vessels  to stop  in                                                              
Alaska  because they  return  to  the port  they  started from  in                                                              
Seattle,  but made  a  stop  in a  nearby  foreign  port which  is                                                              
Vancouver    [British   Columbia,    Canada].      However,    the                                                              
reinterpretation   for  the  Hawaii   ports  is  implicating,   or                                                              
arguably affecting, the Alaska vessels as well.                                                                                 
                                                                                                                                
5:19:22 PM                                                                                                                    
                                                                                                                                
CHAIR JOHANSEN closed public testimony.                                                                                         
                                                                                                                                
REPRESENTATIVE  NEUMAN  moved  to  report  CSSJR  12(STA)  out  of                                                              
committee  with individual  recommendations  and the  accompanying                                                              
fiscal  notes.   There  being  no  objections, CSSJR  12(STA)  was                                                              
reported from the House Transportation Standing Committee.                                                                      

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