Legislature(1995 - 1996)

04/05/1995 01:11 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HB 260 - MARINE PILOTS                                                      
                                                                               
 CHAIRMAN GARY DAVIS announced the agenda was to hear testimony on             
 HB 260 and to review testimony for the amendments.  He introduced             
 Mr. George Utermohle from Legislative Legal Services and drafter of           
 the legislation.                                                              
                                                                               
 CHAIRMAN DAVIS referred to a memo from Mr. Utermohle and asked for            
 confirmation that the amendments contained in the letter will                 
 automatically be corrected within the legislation.                            
                                                                               
 Number 038                                                                    
                                                                               
 GEORGE UTERMOHLE, Legislative Counsel, Legislative Legal Services,            
 Legislative Affairs Agency, explained the amendments before the               
 committee were two typos which occurred in the bill and would be              
 corrected without further action from the committee.                          
                                                                               
 CHAIRMAN DAVIS referred to amendment one, which he said seemed to             
 be "boiler plate" language.  He stated he wanted to go through some           
 of these "boiler plate" amendments that were discussed previously.            
 He said even though amendment one on page 3, line 19, looks                   
 innocuous, he would rather wait to address this amendment to ensure           
 that everyone wishing to testify was present.  Chairman Davis                 
 thanked Mr. Utermohle and introduced Mr. Jeff Bush.                           
                                                                               
 JEFF BUSH, Deputy Commissioner, Department of Commerce and Economic           
 Development; and Commissioner's Designee for the Board of Marine              
 Pilots, explained the department essentially agrees with amendments           
 one, two, four, five, and six which have been described as                    
 technical changes.  However, he stated the department is "mildly              
 opposed" to amendment seven, which increases the size of the board            
 from seven to nine, by adding an additional pilot member and                  
 industry member.  He explained a board of nine members is more                
 unwieldy than a board of seven and costs more to have the meetings.           
 This would result in increased fees as the pilots themselves have             
 to pay the cost for maintaining their board.  He added the                    
 department has had complaints from the pilots that the fees are too           
 high.  He noted although the additional cost is not large, there              
 will be a cost associated with it.                                            
                                                                               
 Number 129                                                                    
                                                                               
 REPRESENTATIVE TOM BRICE stated he understood the pilots, through             
 their license fees, pay for this board.  He asked what contribution           
 to the board is made by the industry.                                         
                                                                               
 MR. BUSH explained the industry does sit on the board and agents              
 pay a licensing fee, as well.  He said he could request Mr. Dan               
 Twohig, the Marine Pilot Coordinator, to present specific numbers.            
                                                                               
 Number 141                                                                    
                                                                               
 REPRESENTATIVE BRICE asked for confirmation that the increase would           
 be appropriately spread out for each of the...                                
                                                                               
 MR. BUSH interjected it was difficult to apportion accurately                 
 because when it comes to costs, the pilots receive more service               
 from the board and the activities of the department, than the                 
 agents do.  The pilots are paying for their own licensing and                 
 examinations.  He explained the costs cannot be apportioned                   
 directly; however, an additional cost which could be factored                 
 directly to this increase of board members, theoretically could be            
 split 50/50, since in fact, if all we were talking about is                   
 increased board costs for industry and pilot increase, they could             
 be split.                                                                     
                                                                               
 MR. BUSH referenced the amendments proposed by Representative                 
 Sanders and said if he understands them correctly, one part calls             
 for the removal of the arbitration clause.  He stated it does                 
 remove the requirements for essentially mandatory service by pilot            
 associations as he understands it...                                          
                                                                               
 Number 191                                                                    
                                                                               
 REPRESENTATIVE EILEEN MACLEAN asked for clarification on which one            
 of Representative Sanders' amendments Mr. Bush was referring to.              
                                                                               
 MR. BUSH commented that Representative Sanders' amendments were not           
 numbered.                                                                     
                                                                               
 CHAIRMAN DAVIS said page 6, lines 4 through 9 of the amendment                
 submitted by Representative Sanders would be amendment eight; page            
 6, lines 26 through 30, will be amendment nine, also submitted by             
 Representative Sanders; and page 7, lines 7 through 30, will be               
 amendment ten, also by Representative Sanders.                                
                                                                               
 REPRESENTATIVE MACLEAN asked for clarification on a letter from Mr.           
 Utermohle regarding the drafting of some amendments.                          
                                                                               
 CHAIRMAN DAVIS asked if she was referring to the letter dated April           
 4, 1995.                                                                      
                                                                               
 REPRESENTATIVE MACLEAN responded, yes.                                        
                                                                               
 CHAIRMAN DAVIS stated the letter had been addressed, and those                
 amendments were drafting errors that have been corrected.                     
                                                                               
 REPRESENTATIVE MACLEAN asked if we are working with Version M of              
 the bill.                                                                     
                                                                               
 CHAIRMAN DAVIS responded in the affirmative.                                  
                                                                               
 Number 260                                                                    
                                                                               
 MR. BUSH noted he has not had the opportunity to consider the                 
 implications of no longer mandating pilotage, if in fact, that is             
 what these amendments do.  He said he would rather reserve comment            
 until later.  He reiterated his comments from previous testimony              
 regarding the state's concern to ensure that there are pilots on              
 board the vessels from a safety perspective.  If, in some way this            
 could be interpreted as allowing vessels to operate without pilots,           
 or could in some way create a situation where pilots would refuse             
 to serve, thereby necessitating an emergency situation where a                
 pilot would not be on board a vessel, the department would oppose             
 it from that perspective.  He said he was not sure of the                     
 implications of the amendments.                                               
                                                                               
 MR. BUSH expressed concern for amendments eight, nine, and the                
 first half of amendment ten, referencing Section 17 (d).  He stated           
 they all addressed the same issue.                                            
                                                                               
 CHAIRMAN DAVIS felt from the discussions the committee has had,               
 Section 14 (c) is clear; it was paragraph (d) that raised concern.            
 He explained the (d) paragraph which reads, "a person licensed                
 under this chapter who is a member of a pilot organization, shall             
 provide pilotage services to a vessel upon being dispatched by the            
 pilot organization."  He asked Mr. Bush if he interpreted this                
 section as the guts of mandating pilotage services.                           
                                                                               
 MR. BUSH said yes, and combined with page 7, Section 17, which                
 states that "a pilot organization shall dispatch a person who is              
 licensed under this chapter and who is a member under the                     
 organization to provide piloted services upon the request of a                
 representative of a vessel required to employ a pilot."  The                  
 association is required to dispatch under Section 17, and under               
 Section 14, the person who is dispatched is then required to serve.           
                                                                               
 Number 248                                                                    
                                                                               
 CHAIRMAN DAVIS expressed concern with Section 14 (d).  He indicated           
 the intent is that a pilot will provide service to a vessel.  He              
 explained those services are as mandated and does not require the             
 pilot to move the ship if he deems it unsafe.                                 
                                                                               
 MR. BUSH stated that Chairman Davis was correct...this was the                
 department's interpretation.  They interpret it that the pilot has            
 to provide reasonable pilotage services and use his best judgment             
 as to what the reasonable actions of the ship should be under                 
 particular circumstances.                                                     
                                                                               
 CHAIRMAN DAVIS said, "in previous discussions, there was concern              
 that it was a maneuver to move the ship or take direction from the            
 owners if it is not in the best interest of the ship."                        
                                                                               
 Number 285                                                                    
                                                                               
 REPRESENTATIVE SANDERS felt the reason they would like to see this            
 omitted is because it is viewed as an anti-competitive clause and             
 the idea is to have competition.  He said if you can't compel or              
 mandate that an individual has to show up - if it is a competitive            
 situation - if he doesn't show up, you just go on to the next pilot           
 or the next organization and get a different one at a different               
 price.                                                                        
                                                                               
 MR. BUSH stated they do not have true competition.  He explained              
 what they have is essentially a quasi-competitive system, where               
 currently there are six pilot associations covering four regions.             
 In two of those regions they only have one pilot association.  To             
 assume that competition exists in this area would be erroneous.  He           
 mentioned in the other two regions there are two pilot associations           
 in a competitive situation.  On the other hand, he felt it was                
 important to recognize even when there are only two competitors in            
 a closed market such as this, the level of competition is less than           
 perfect.                                                                      
                                                                               
 REPRESENTATIVE SANDERS suggested perhaps it should be changed so              
 where there is no competition, the pilots are compelled to provide            
 service; however, where there is competition, they should not be.             
                                                                               
 CHAIRMAN DAVIS stated that often, even in an area where there is              
 competition, there are still agreements and contracts signed.  This           
 would come into play even in cases such as the one mentioned.                 
                                                                               
 MR. BUSH stated that was correct.  He added it is obvious that we             
 have a system that is not perfect.  He said it was difficult for              
 him to dictate what exactly is the best way to solve the myriad               
 positions of the various parties.                                             
                                                                               
 Number 303                                                                    
                                                                               
 REPRESENTATIVE MACLEAN made reference to amendment three, which               
 would delete parts of Section 14, and add a new Section (c).  She             
 said she did not understand the difference between this amendment             
 and Representative Sanders' amendment.                                        
                                                                               
 CHAIRMAN DAVIS suggested that the amendments should be discussed in           
 an orderly manner and the issues should focus mainly on the                   
 concerns of the department.  He indicated he did understand the               
 connection with the section under that amendment, but commented               
 that it could get complicated because different amendments seem to            
 affect similar areas.                                                         
                                                                               
 REPRESENTATIVE MACLEAN stated since Section 14 was being discussed            
 she was requesting clarification on the amendments.                           
                                                                               
 CHAIRMAN DAVIS indicated that would be fine because Mr. Bush had              
 concerns with amendment three, as well.  Chairman Davis asked Mr.             
 Bush if he would address Representative MacLean's question.                   
                                                                               
 MR. BUSH said with respect to that particular change in amendment             
 3 as it relates to Section 14, as he understood it, the existing              
 Section (c) in the work draft is being removed and what is                    
 currently subsection (d) in the work draft will be made the new               
 subsection (c).  From a substantive standpoint, subsection (c) in             
 the work draft is being deleted at the request of the department.             
 He explained that subsection relates to "a person licensed under              
 this chapter, who is not a member of a pilot organization, and in             
 fact, it is a requirement of the chapter to be a member of a pilot            
 organization in order to obtain a license."  He indicated there was           
 no reason for that particular subsection; that is why they                    
 requested subsection (c) be deleted.                                          
                                                                               
 CHAIRMAN DAVIS suggested rolling amendment three up into an area of           
 "nonobjection" by the department.                                             
                                                                               
 MR. BUSH stated this was true, but noted just the first part of               
 amendment three.  The rest of amendment three relates to the                  
 dispute resolution provisions.  He indicated rather than comment              
 directly on these provisions, which appear to be technical changes            
 to the proposed work draft dispute resolution sections covered in             
 Section 18, he said he would speak on behalf of the Administration,           
 but would defer responsibility for his testimony to the Department            
 of Law and have them available to answer any legal questions.  He             
 explained lawyers in the Attorney General's Office, particularly              
 Mr. Forbes, who is the state's antitrust attorney, are raising                
 issues on dispute resolution systems proposed in this bill.  These            
 systems more than likely will not survive scrutiny under the                  
 federal antitrust law, under the Sherman Act.  He said he would try           
 to simplify this issue because he did not understand it                       
 particularly well either.  He explained the way that the                      
 associations have in the past avoided antitrust concerns at the               
 federal level, is by designing a so-called "state action                      
 exemption."  He gave an example with public utilities, whereby if             
 the state determines a price through state action, then the Sherman           
 Anti Trust Act does not apply for federal antitrust purposes.                 
 However, if the state does not set a price, then they're subject to           
 antitrust considerations.  He explained in this particular case,              
 the associations would then be subject to antitrust considerations,           
 at the federal level, because there is no federal exemption for               
 marine pilots.  He indicated there is a state antitrust exemption             
 for marine pilots, but not a federal exemption.                               
                                                                               
 MR. BUSH said we come back to the state then, at least according to           
 the Department of Law, being required to either set price or a                
 maximum tariff, similar to what was imposed up until last summer              
 when it sunsetted, may be sufficient to overcome the Sherman Act              
 considerations.  He explained this was the argument when there was            
 a maximum tariff and the Department of Law is still prepared to               
 stand by that argument; that a maximum tariff may be enough to                
 overcome federal antitrust concerns.  But there has to be state               
 action when setting a price.  Then it becomes a question of whether           
 or not a maximum tariff becomes a state action in setting the price           
 or not.  He said that was something they could certainly argue.               
                                                                               
 ME. BUSH continued that a set tariff becomes even more of a clear             
 case issue where antitrust considerations would not come in to                
 play.  He remarked from the state's perspective, quite honestly,              
 this issue is not particularly a concern because as he testified              
 earlier, he and the state are not concerned with the pricing issues           
 with respect to the pilot organizations.  He stated his concerns              
 were with making sure pilots were available, making sure they're              
 well-trained and that there is a safety factor involved.  Those are           
 the state's interests.  He added when it comes to pricing that was            
 a matter, in his opinion, between the industry and the pilots.  He            
 noted he was raising this concern because the state's antitrust               
 specialists have said the associations may be subject to antitrust            
 litigation and penalties, if a price is not set at the state level            
 in some way.                                                                  
                                                                               
 CHAIRMAN DAVIS said it was his understanding that the remaining               
 sections of amendment three deleted references to Section 14 (c).             
 He added this is currently in the dispute resolution section in               
 conjunction with a few minor word changes that have come up as                
 being problematic during past debates.                                        
                                                                               
 Number 403                                                                    
                                                                               
 REPRESENTATIVE MACLEAN inquired as to why Section 18 was not                  
 deleted, on the issue of dispute resolution?                                  
                                                                               
 CHAIRMAN DAVIS explained there had been some other discussion as to           
 possible changes to it.  He indicated this would be discussed with            
 the Department of Law.  Chairman Davis then introduced Mr. Mike               
 O'Hara.                                                                       
                                                                               
 MIKE O'HARA, Member, Board of Marine Pilots; and ship pilot from              
 Region 2, stated both as a member of the board and the Southwestern           
 Alaska Pilots Association (SWAPA) they support all the amendments             
 to the work draft.  He referred to the "inspected" part of                    
 amendment 1, and said the reason that's important is because from             
 a 1,000 to 1,600 gross ton uninspected vessel is essentially a                
 large fishing boat  Whereas, if it is inspected, it could be a                
 ferry.  He added it is U.S. Coast Guard inspected and includes all            
 the safety requirements taken care of by the Coast Guard as opposed           
 to a fishing vessel which does not have the same criteria for                 
 safety.  He indicated he was in agreement with the terms "chronic"            
 and "concurrence."                                                            
                                                                               
 CHAIRMAN DAVIS asked for clarification with the word "inspected"              
 inserted, would this include the fishing vessels?                             
                                                                               
 MR. O'HARA said it would include fishing vessels over 1,600 tons.             
 Those would be classified as ships, such as the larger trawlers.              
 The smaller ones are considered boats and all are uninspected with            
 minimal licensing and safety requirements.                                    
                                                                               
 CHAIRMAN DAVIS asked if the purpose of adding the word "inspected"            
 is to broaden the area of ships that would be included.                       
                                                                               
 MR. O'HARA stated Chairman Davis was correct.  It would broaden the           
 area of the ships included, as well as the licenses for the people            
 on those ships.  It would ensure that those ships are Coast Guard             
 inspected; for example the ferry boats in Southeast Alaska.  He               
 indicated there was a letter to the board regarding regionalization           
 and cross regionalization and commented that the whole issue of               
 regionalization is safety.  He mentioned that Mr. Tex Edwards will            
 testify on this subject and will indicate that it is a safety issue           
 and local knowledge of a particular area.  He referred to the                 
 letter recommending cross regionalization, and said in his opinion            
 it is bravado and  "we just don't need cowboys driving tankers."              
                                                                               
 Number 455                                                                    
                                                                               
 REPRESENTATIVE JEANNETTE JAMES stated she understood the safety               
 issue of cross regionalization and asked if there was some sort of            
 testing procedure for a pilot to take to indicate their familiarity           
 with a specific area.                                                         
                                                                               
 MR. O'HARA indicated there were a number of examinations that a               
 pilot must take in order for them to obtain a license.  He                    
 explained a federal license is the first step, which is a minimum             
 entry requirement for licensing.  The federal pilotage test is                
 strictly a memorization of numerous books, coast pilot charts, a              
 light list, etc., but it does not take into account the things that           
 a pilot has to know for a particular area, because that is mostly             
 local knowledge; it is the entry level.  He explained he had been             
 a pilot in Region 2 and Region 3, but he gave up his license in               
 Region 3 because he had not been out in the area for a number of              
 years, and no longer felt he was familiar with that area.  He had             
 the license, but he felt he was just not up to speed in that                  
 particular area.  He stated he could at anytime go to Region 3 and            
 say, "I want to be a pilot in a different region" and he would                
 refamiliarize himself with that region.  Any pilot who has a                  
 license for another region may go and join that region.  All they             
 have to do is become familiar with the particular region.  He asked           
 Representative James if she was asking if it was possible for some            
 one to know exactly where all the reefs are, to which he answered             
 no, and not stay current.  He stated in his opinion it could not be           
 done.                                                                         
                                                                               
 REPRESENTATIVE JAMES asked if they had maps and charts.                       
                                                                               
 MR. O'HARA said yes, they have charts which are, in most cases                
 accurate, and in many cases they are not.  For example, he referred           
 to Region 3, the Togiak area, where the charts are very poor.  This           
 is also the case with the Upper Cook Inlet Region where often, the            
 shoals have a tendency to shift.  He remarked on a situation where            
 a federal ship pilot was surprised that the shoal had shifted, but            
 it was not a surprise to the pilots who frequented the area with              
 tankers.  He explained that is why there is a mechanism for                   
 "shifting regions," but that local knowledge has to be maintained.            
                                                                               
 REPRESENTATIVE JAMES asked for confirmation on whether or not there           
 is a test for pilots, insofar as their knowledge of that particular           
 region, or was this more of an honor system.                                  
                                                                               
 MR. O'HARA stated the minimal license is a federal license, then              
 the pilot must pass a state licensing examination.  The state                 
 license is a more detailed examination and covers the actual "real            
 life" job of piloting, such as the location of the shoals and where           
 they have shifted to, and the direction of that shift.  He                    
 explained it is information that the coast pilot is unable to keep            
 current on.  Local knowledge and information that the local pilots            
 have acquired over the years is information not found in books,               
 such as natural ranges, things to watch out for in the fog, snow              
 and ice, and how to handle a ship in the ice.  He explained these             
 were things that were region specific.  A person can't come from              
 Ketchikan, which is essentially ice free, and go to Anchorage and             
 expect to know how to handle a ship in ice.  He said it just can              
 not be done.  He added the ice changes and within a week the                  
 conditions can be entirely different.  He exemplified the fact that           
 just a couple of weeks ago there was a cold spell, and within a               
 weeks time the sea ice was six feet thick.  A person coming from              
 another area, cannot be familiar with that.  He stated he lives in            
 the Anchorage area and knows what it is like.                                 
                                                                               
 REPRESENTATIVE JAMES asked for confirmation on the existence of a             
 test that presents all these aspects that would test the pilot on             
 their familiarity with a particular area.  She asked Mr. O'Hara if            
 he chose to go back to Region 3, would he have to pass a test for             
 that area.                                                                    
                                                                               
 Number 515                                                                    
                                                                               
 MR. O'HARA said yes, he would.  He would have to go and familiarize           
 himself with the area and pass an examination.                                
                                                                               
 REPRESENTATIVE MACLEAN asked Mr. O'Hara how he felt about Sections            
 17 and 18, regarding arbitration dispute resolution.                          
 MR. O'HARA explained as a member of Region 2, the official position           
 of SWAPA is that in regions having only one group, some sort of               
 conflict resolution would be appropriate.  As a board member, he              
 felt there was a need for a conflict resolution, but could not say            
 this was the solution.  He indicated he did not know what the                 
 solution would be, but there has to be a way to enforce the                   
 compulsory pilotage.  He referred to Section 14 (c), stating "a               
 person licensed under this chapter who is not a member of a pilot             
 organization shall provide pilotage services..." and indicated if             
 a pilot goes to a ship and refuses to provide pilotage service                
 based on safety, he is still providing pilotage services.  The                
 pilot is obligated to use his best judgment as to whether or not it           
 would be unsafe to move the ship due to a possible grounding or for           
 whatever reasons and said those are pilotage services; even if the            
 pilot doesn't work - he's working by saying "no, we're not going to           
 do it today, we'll wait for a couple hours."  He felt as a board              
 member, he would like to see some legislation for enforcing the               
 compulsory pilotage.                                                          
                                                                               
 REPRESENTATIVE MACLEAN asked how dispute resolutions were currently           
 handled.                                                                      
                                                                               
 MR. O'HARA indicated the board has not done a good job at handling            
 dispute resolutions.  He noted that approximately two years ago,              
 they had to appear in court over what they thought was a dispute              
 resolution, and the judge dismissed the case.  What the board                 
 declared as an emergency, the judge said it was not.  He added they           
 had no mechanism.                                                             
                                                                               
 Number 543                                                                    
                                                                               
 REPRESENTATIVE JAMES stated in her opinion there were only two                
 solutions.  One is to have true competition, which there is not;              
 the other is to set a tariff and not have competition.                        
                                                                               
 MR. O'HARA explained Alaska is unique in that it is breaking                  
 ground.   Other states are looking at the progress that Alaska has            
 made.  Other states have tried it, but have backed down.  For                 
 example, Connecticut re-instituted the regulated pilotage.  He                
 mentioned from a safety standpoint, which is where their concerns             
 lie, it is currently working.  He indicated there were high                   
 standards for entry, and even though there is a lot of concern over           
 the cost, basically the safety aspect is working.  He felt that the           
 1991 act has done the job, and whatever is done to this particular            
 legislation, whether it is kept quasi-competitive or goes to a                
 regulated or open market, that is the basis of whatever decision is           
 made.  He reiterated his comments on safety issues and that the               
 safety aspect, as far as he was concerned, is currently working.              
                                                                               
 Number 566                                                                    
                                                                               
 REPRESENTATIVE JAMES asked if we still had the regions and did not            
 have competition and had only tariffs in the regions, would this              
 not work from a safety perspective as well?                                   
                                                                               
 MR. O'HARA said yes, it would work if.....                                    
                                                                               
 REPRESENTATIVE JAMES interjected that if safety is the issue, then            
 it would seem like the other problems would go away and the safety            
 issue is addressed to a greater extent.                                       
                                                                               
 MR. O'HARA indicated this was true and if there were fixed tariffs            
 in place or there were maximum tariffs as there was before, the               
 competition would be based on service.                                        
                                                                               
 REPRESENTATIVE JAMES asked if this was something Mr. O'Hara was               
 opposed to.                                                                   
                                                                               
 MR. O'HARA said as a board member or as a Region 2 pilot, he was              
 not opposed to it.  He indicated he was not sure how this fit in              
 with the political attitude of the state for competition, but                 
 safety-wise there was no conflict.                                            
                                                                               
 CHAIRMAN DAVIS asked for testimony from Benee Braden.                         
                                                                               
 BENEE BRADEN indicated she would pass.                                        
                                                                               
 Number 586                                                                    
                                                                               
 CHAIRMAN DAVIS stated he would now take testimony via                         
 teleconference from Valdez.                                                   
                                                                               
 TEX EDWARDS, Executive Committee Member, Prince William Sound                 
 Regional Citizens' Advisory Council (RCAC); and also representing             
 the city of Homer on that council, stated the RCAC's mission is               
 citizens promoting environmentally safe operations of the Alyeska             
 terminal and associated tankers.  He said they are certified as an            
 alternative council under Section 5002 of the Oil Pollution Act of            
 1990.  Their work is guided by their contract with Alyeska Pipeline           
 Service Company and with the Oil Pollution Act of 1990.                       
                                                                               
 MR. EDWARDS indicated RCAC is an 18-member organization                       
 representing communities and boroughs impacted by the 1989 Exxon              
 Valdez Oil Spill.  Other areas include commercial fishing groups,             
 Alaska Native interest groups, environmental, aquaculture and                 
 business organizations.  He stated that safety, as Mr. O'Hara has             
 indicated, is RCAC's primary concern and should be the primary                
 concern regulating marine pilotage.  Safe marine pilotage is of               
 critical importance to the residents of Prince William Sound.  RCAC           
 has experienced the impact of minor adjustments to marine pilotage            
 with the Exxon Valdez oil spill.  He indicated as stated in                   
 legislative intent and findings, marine pilotage is to assure the             
 protection of lives, property and the marine environment of the               
 state.                                                                        
                                                                               
 MR. EDWARDS continued to explain that RCAC feels the licensed                 
 marine pilots should have extensive local knowledge to pilot                  
 certain vessels on inland and coastal waters.  The safety concern             
 is the primary issue for the public and should be for the state of            
 Alaska.  RCAC has no vested economic interest in pilotage.  RCAC              
 urges the legislature to remain focused on the impacts dealing with           
 safety issues regarding the bill under consideration.  During                 
 recent years the Department of Commerce and Economic Development,             
 Division of Occupational Licensing, and the Marine Coordinator have           
 made significant improvements toward making licensing examination             
 and training more objective.                                                  
                                                                               
 MR. EDWARDS agreed with Mr. O'Hara's statement.  RCAC applauds and            
 supports the progress.  However, the department has also been                 
 hampered in their efforts to improve marine pilotage by the                   
 constant litigation.  RCAC hopes that the housekeeping portions of            
 this legislation will reduce the conflicts in the system and allow            
 the state to focus more clearly on the important issues affecting             
 safety.  RCAC looks forward to constructive interaction and                   
 continued improvement.  He indicated RCAC is very appreciative of             
 the excellent safety record of SWAPA, which has avoided many of the           
 growing pains and accompanying problems occurring in Southeast and            
 Western Alaska.  He stated he believed this is accredited to the              
 members and the training program of SWAPA and not so much how the             
 program is regulated by the state.                                            
                                                                               
 MR. EDWARDS commented that SWAPA has maintained high professional             
 standards in recruiting, training and licensing pilots.  He added             
 Alyeska has also evaluated the qualifications of new pilots calling           
 at the Trans Alaska Pipeline System (TAPS) terminal, and the                  
 combination of these two influences have helped to maintain                   
 rigorous, professional standards for pilot services on TAPS trade             
 tankers.  Introducing competition or cross regional pilotage in the           
 Prince William Sound area would be a gross error.  The competition            
 that Holland American Line helped to create in Southeastern Alaska            
 may have contributed to the grounding of the New Amsterdam.  He               
 indicated this situation is not what they want to achieve in Prince           
 William Sound or anywhere else.  The state needs to be proactive in           
 ensuring the training, examinations, licensing and safe operating             
 standards are rigorously regulated.  The state has usually taken a            
 "hands-off" approach toward regulating some of these areas and has            
 not intervened unless there was a problem.  He said proponents of             
 competition advocating regulating safety directly into the public             
 needs to be assured that this will happen, whether it is within a             
 competition system or within a regulated monopoly.                            
                                                                               
 MR. EDWARDS continued to explain that by allowing training and                
 licensing standards to be eroded decreases public confidence.  The            
 Board of Marine Pilots should set high professional training,                 
 licensing and safety standards that cannot be lowered by shippers             
 or by competing pilot groups.  He indicated in some of the hearings           
 there has been debate regarding competition and whether competition           
 exists.  He explained true economic competition cannot exist in an            
 industry where the use of pilotage services are mandatory.  Pilots            
 must belong to a pilot association and that association must                  
 provide services.  He said arguing over whether competition exists            
 is of little use.  The larger issue is whether competition between            
 pilot groups and between pilots and shippers has a detrimental                
 impact on safety.  More important, is the question of whether or              
 not competition would compromise the ability of pilots to make                
 professional decisions unencumbered by reprisal or the fear of                
 reprisal, either in the form of loss of market share to competing             
 pilot groups or reduction in negotiated fees.                                 
                                                                               
 MR. EDWARDS said RCAC questions whether there is sufficient                   
 measures in state law to protect Prince William Sound and the                 
 states' resources from the problems that appear to be the result of           
 competition.  He stated RCAC believes that the pilot associations             
 should not be able to reduce training and licensing standards in              
 order to increase membership.  He indicated it appeared to them               
 that the affect on safety by competition is negative and it seems             
 relevant that Alaska is one of the few states that provides for the           
 setting of pilot fees based on competition.  He added it appears to           
 be a purely economic issue that continues to detract attention from           
 the more important issues of recruiting, licensing, training and              
 safety.  In addition, because the supporters of competition are               
 advocating binding arbitration, one would question whether the                
 quasi-competition system for setting pilotage fees has worked.                
                                                                               
 MR. EDWARDS said competition has been used as leverage for the                
 shippers to keep pilotage rates at a minimum.  It is understandable           
 that the shippers would seek reasonable pilot rates, but the                  
 ultimate concerns should be safety assured by maintaining                     
 professional standards and not balancing economic issues.                     
                                                                               
 TAPE 95-13, SIDE B                                                            
 Number 000                                                                    
                                                                               
 MR. EDWARDS addressed Section 2 pertaining to board membership. If            
 the board is not setting tariffs, RCAC questions the continued                
 requirement for industry representation.  He indicated maybe the              
 board should be a safety, training and licensing board with pilot             
 and public members from the pilot regions.  Currently, there are              
 only two members each for public, pilots and industry representing            
 Southeast and Southcentral Alaska.  He suggested the purpose of the           
 marine board is to protect the public's interest.  He stated RCAC             
 opposes any reduction in public members by number or by percentage            
 of the board.                                                                 
                                                                               
 Number 023                                                                    
                                                                               
 MR. EDWARDS referenced Section 8 regarding qualifications for the             
 deputy pilots license, and said RCAC supports the Department of               
 Commerce and Economic Development and Mr. O'Hara's amendments to              
 avoid reduction in training and entry standards.  He then referred            
 to Section 13, regarding the rotation of recognition of a pilot               
 association where periods about the technical problem if a                    
 membership in an association is required, and questioned what                 
 happens if recognition is revoked and there is no legal mechanism             
 for pilots to offer services.  Mr. Edwards then referred to Section           
 15 regarding sanctions against pilots for drug or alcohol use.  He            
 indicated in previous hearings there was testimony that this new              
 section allows a pilot's liability to be unlimited in any situation           
 for which the board can sanction a pilot and is thus arbitrary and            
 too harsh.  He stated if, in fact, the section provides for                   
 unlimited liability in situations in which the pilot could be                 
 sanctioned for drug or alcohol use, RCAC supports that because it             
 is a safety issue.  He said he would be happy to answer any                   
 questions.                                                                    
                                                                               
 Number 045                                                                    
                                                                               
 REPRESENTATIVE SANDERS strongly agreed with Mr. Edwards.                      
 Representative Sanders indicated a mistake must have been made in             
 1991 and questioned the fact of ever getting it resolved.  He asked           
 Mr. Edwards how he felt about amendment ten, regarding the deletion           
 of Section 17 (d) and Section 18 in their entirety.                           
                                                                               
 MR. EDWARDS declined to answer Representative Sanders' question               
 because he was not familiar with that section and did not                     
 understand the ramifications of the amendment.                                
                                                                               
 CHAIRMAN DAVIS stated Section 18 is the dispute resolution and as             
 currently written is the binding arbitration language.                        
                                                                               
 MR. EDWARDS said if we have a regulated monopoly, or like a                   
 utility, or if we have the competition, either way it appears there           
 will be the need to take care of some of the disputes.  He                    
 indicated there does need to be a source of arbitration either way,           
 and agreed that the pilot board may not be the place to accomplish            
 this.  Mr. Edwards suggested a single individual arbitrator,                  
 perhaps a retired admiralty lawyer or someone with a marine                   
 background.  He also suggested the possibility of a separate three            
 person panel that would meet on rare occasions when needed; perhaps           
 a retired pilot or someone from the shipping community that is                
 retired, or a public member.  He said if we are operating this from           
 a safety standpoint, then sooner or later these issues will resolve           
 themselves as far as fees.  He hoped that there will be more talk             
 of a cost of living adjustment.  He indicated the need for an                 
 independent arbitrator, whether it be a three person panel or an              
 individual.                                                                   
                                                                               
 Number 112                                                                    
                                                                               
 HANS ANTONSEN, Member, Southeastern Alaskan Pilots Association                
 (SEAPA) in Region 1, commended Mr. Edwards on his insight towards             
 this issue.  Mr. Antonsen stated he disagreed with Mr. O'Hara's               
 comments regarding a fixed or maximum tariff satisfying their needs           
 as well as the state's for protection from antitrust issues.  He              
 felt SEAPA is the more appropriate association to speak on                    
 antitrust issues because they have previously dealt with a couple             
 of lawsuits regarding antitrust issues; lawsuits that were involved           
 with the act as it was pre '91 and when we had even a stronger                
 degree of oversight, as we do now.                                            
                                                                               
 MR. ANTONSEN said he did not believe there was anything within the            
 state act that can provide the state or pilot associations with               
 protection from antitrust concerns.  He stated they have been                 
 involved to the extent of asking the state to do a amicus brief for           
 a case that was in federal court.  He felt the department can speak           
 in regards to the lawsuit that was brought against them as well.              
 He noted the game plan, when it comes to antitrust and pilotage               
 issues, is to remove it to a federal court where there are triple             
 damages, antitrust, and no protection or specific language in                 
 federal law that grants pilot organizations protection from                   
 antitrust.  Mr. Antonsen said we have that in state, but not in               
 federal.  He indicated there is a conflict, and referred to either            
 Mr. Bush or Mr. O'Hara who stated Mr. Forbes did testify that a               
 maximum tariff may give some protection, a fixed tariff would give            
 better protection; but either way, "may" or "better" did not get              
 the lawsuit off their case when they applied to those grounds.  He            
 explained they ended up having to deal with it on their own and               
 were let down by the state.  The state indicated yes, this is what            
 pilots have as far as protection in the state ground (indisc.).               
 Mr. Antonsen indicated their attorney is present to address these             
 issues in more detail regarding antitrust.                                    
                                                                               
 MR. ANTONSEN agreed with the deletion of Section 17 and 18, and               
 remarked that we keep trying to solve hypothetical problems and not           
 real issues.  He said there has been no tariffs since last year,              
 and since then, his association has been involved in negotiations             
 with various shipping companies and have negotiated contracts, some           
 dealing with conflict resolution and some that do not.  He said he            
 found it interesting that on some occasions it was industry that              
 requested the omittance of binding arbitration or conflict                    
 resolution on the grounds it was testified previously.  He said we            
 have the courts, and if there is disagreement, we should be able to           
 resolve our differences that way.  He said if they think there has            
 been some price fixing, the pilots by this time are scared to death           
 of the specter of antitrust with triple damages and with no support           
 from the state - no offense intended to this body.                            
                                                                               
 MR. ANTONSEN said in response to Representative James' question               
 regarding the answer to their problem that either they have                   
 competition or they go to a fixed tariff, perhaps committee members           
 were not familiar with the act that the Florida Legislature enacted           
 and signed into law sometime last year.  He explained the state of            
 Florida was wrestling with the competition problem and finally                
 determined that competition was not the answer.  Mr. Antonsen asked           
 to read into the record a brief preamble from the Journal of House            
 of Representatives dated April 4, 1994.  This is stated in the                
 Florida statutes, which provides what he believes is a clearly                
 articulated position of a state that has dealt with competition and           
 perhaps had reached the point where Alaska is currently, as far as            
 where to go from here and how to solve these problems.                        
                                                                               
 MR. ANTONSEN read into the record:  "Under piloting regulation,               
 general provisions 310.0015, piloting is an essential service of              
 such paramount importance that its continued existence must be                
 secured by the state and may not be left opened to market forces.             
 Because safety is the primary objective in the regulation of                  
 piloting by the state and because of the significant economies of             
 scale in delivering the service, the requirement of a large capital           
 investment in order to provide required service and the fact that             
 pilots are supplying services that are considered to be essential             
 to the economy and the public welfare, it is determined that                  
 economic regulation, rather than competition in the market place              
 will better serve to protect the public health, safety, and                   
 welfare.  The rate setting process and the issuance of licenses               
 only in numbers deemed necessary or prudent by the board and other            
 aspects of the economic regulation of piloting established in this            
 chapter are intended to protect the public from the adverse effects           
 of unrestricted competition which would result from an unlimited              
 number of licensed pilots being allowed to market their services on           
 the basis of lower prices rather than safety concerns.  This system           
 of regulation benefits and protects the public interest by                    
 maximizing safety, avoiding uneconomic duplication of capital                 
 expenses and facilities, and enhancing state regulatory oversight.            
 The system seeks to provide pilots with reasonable revenues, taking           
 into consideration the normal uncertainties of vessel traffic and             
 port usage sufficient to maintain reliable, stable piloting                   
 operations.  Pilots of certain restrictions and obligations under             
 this system including but not limited to the following; pilots may            
 not refuse to provide piloting services to any person or entity               
 that may lawfully request such services except for justifiable                
 concerns related to safety or in the case of a vessel planning a              
 departure, for nonpayment of piloting.  Pilots may not unilaterally           
 determine the pilotage rates they charge, such pilotage rates shall           
 instead be determined by the pilotage rate review board in the                
 public interest as set forth in Section 310.151.  Pilots shall                
 maintain or secure adequate pilot boats, office facilities,                   
 equipment, dispatch systems, communication equipment and other                
 facilities and equipment in support services necessary for a modern           
 dependable piloting operation.  The pilot or pilots in a port shall           
 train and compensate all member deputy pilots in that port.                   
 Failure to train or compensate such deputy pilots shall constitute            
 a ground for disciplinary action under Section 310.101.  Nothing in           
 this subsection shall be deemed to create an agency or employment             
 relationship between a pilot or deputy pilot in a pilot or pilots             
 in a port."                                                                   
                                                                               
 MR. ANTONSEN summarized this report by stating the public is                  
 determined that competition will not serve the state's needs.  This           
 is what the state needs out of piloting to ensure that commerce               
 does not stop, training is not degraded and the job gets done.  He            
 added what he keeps hearing from pilots and industry is that people           
 keep saying we are 90 percent there.  He believed going the                   
 remaining 10 percent will give the state what it needs for security           
 from antitrust concerns.                                                      
                                                                               
 Number 259                                                                    
                                                                               
 CHAIRMAN DAVIS asked if there was any questions.  He then announced           
 Ms. Gayle Horetski.                                                           
                                                                               
 GAYLE HORETSKI, Assistant Attorney General, Civil Division,                   
 Department of Law, said she was available for questions.                      
                                                                               
 CHAIRMAN DAVIS referred to a comment made by Mr. Bush regarding the           
 question of the state action exemption in that "we could not escape           
 antitrust problems with the current language until we have the                
 ability to set a rate."  He asked Ms. Horetski if this was correct.           
                                                                               
 MS. HORETSKI explained this issue has been looked at by the                   
 Department of Law and by the Department of Commerce and Economic              
 Development.  There have been some developments in this area since            
 the 1991 act was adopted.  She explained one of the developments is           
 the U.S. Supreme Court decision dated June 1992.  The name of that            
 particular case is the Federal Trade Commission v. TICOR Title               
 Insurance Company.  Basically, the Federal Trade Commission (FTC)            
 filed a complaint against title insurance companies alleging that             
 they were price fixing such items as title searches.  She explained           
 the states that were involved in this case went before the Supreme            
 Court, and had a mechanism where title insurance companies had a              
 rate bureau and would submit rates to the state.  The state                   
 legislature had 60 days or some period of time to accept or reject            
 those rates.  She added there was state oversight of these rates.             
                                                                               
 MS. HORETSKI continued to explain the title insurance company                 
 received this complaint from the FTC, they said "wait, we are                 
 regulated by the state and are under the state action exemption to            
 federal antitrust liability."  In the TICOR Title Insurance Company           
 case, the Supreme Court said "okay, we understand that there is a             
 state articulated policy in your state that allows for the setting            
 of these rates -- (indisc.) articulated rates, it was a statute is            
 what it was -- and we understand there is a mechanism that would              
 allow state oversight of these rates."  However, the decision of              
 the Supreme Court was that in those cases, the state was "rubber              
 stamping" these rates and not checking them for any substantive               
 analysis as to whether or not it would be reasonable.  She added it           
 benefitted the title insurance companies because they would set the           
 rates wherever they wanted.  She explained the U.S. Supreme Court             
 said there was not sufficient active state regulation of that                 
 industry to bring these companies under antitrust liability under             
 the state action exemption.  She expressed concerns from the                  
 Departments of Law and Commerce and Economic Development that the             
 state will not be liable for antitrust action under federal law.              
 She explained the pilots and the pilot associations have very real            
 potential liability if there is no mechanism for state oversight of           
 the provision of the services provided.                                       
                                                                               
 MS. HORETSKI stated there is some oversight in terms of licensing;            
 but the issue is, who sets the rates that the public pays and that            
 was the issue that was in the FTC v. TICOR case.  She commented if          
 it is not being done by the state through a careful, rigorous,                
 thoughtful process, then the companies do not receive antitrust               
 protection.  She added this was the concern of the pilot                      
 associations.  They are going to end up having this litigation if             
 there is no rate setting mechanism, whether that is accomplished              
 with a fixed tariff or a maximum tariff.                                      
                                                                               
 MS. HORETSKI continued to explain if there is no mechanism at all             
 then it would create serious concerns regarding possible liability.           
 She indicated under federal antitrust law, a private party may file           
 an action.  If that action is successful the private party may                
 recover double damages; that is in the federal law.  She said it              
 does not have to be the state attorney general or the FTC or                  
 somebody pursuing the pilot associations.  She felt this would not            
 happen, but one group can sue another or one person could sue the             
 association creating numerous lawsuits.  She concluded that these             
 were their concerns.                                                          
                                                                               
 Number 317                                                                    
                                                                               
 REPRESENTATIVE SANDERS stated "lets just throw this into Alaska               
 Public Utilities (APUC), they never have any problems over there."            
                                                                               
 MS. HORETSKI explained in the past there was some discussion of               
 having someone other than the board set the tariffs and                       
 theoretically that would be acceptable.  It does not have to be the           
 board.  She commented it does make sense to have it be the board in           
 terms of expertise; however, it would be a perfectly legal option,            
 so long as the legislation was drafted that way.  She noted there             
 was a maximum tariff that did expire.  She said she had sample                
 language from the old maximum tariff language in existing statutes.           
 She indicated how this is drafted was as a fixed tariff.  She                 
 indicated it appears in descending order of protection, in that               
 where there is a fixed tariff, clearly there is state oversight of            
 the rates because the state, the board, the APUC or whoever, has              
 set these rates.  She explained to go a step lower with the maximum           
 tariff issue, then it becomes unclear due to the possibilities of             
 private parties arguing with each other.  She remarked there is               
 still some state oversight in the sense that the price cannot rise            
 above a certain level.  Presumably, there would not be any gouging            
 of shipping companies because these rates would be set fairly.  She           
 explained in further descending order, there is a proposal of an              
 alternate dispute mechanism, whether that be arbitration, mediation           
 or whatever.  She noted it begins to resemble the issues that were            
 struck down in the FTC v. TICOR case.  She added it is not                  
 oversight in the sense of setting the rates ahead of time; it is if           
 there is argument over these issues and eventually reaching some              
 sort of conclusion.  She added this was not good state control over           
 the prices.                                                                   
                                                                               
 Number 352                                                                    
                                                                               
 REPRESENTATIVE BRICE asked if arbitration could lead to a situation           
 similar to TICOR.                                                             
                                                                               
 MS. HORETSKI stated their concern is that a dispute mechanism that            
 does not set a tariff would not provide the pilot associations with           
 the protection under federal antitrust law.  She added under state            
 law it is acceptable because there is a specific exemption in AS              
 45, but that is not true under federal law.                                   
                                                                               
 Number 370                                                                    
                                                                               
 DOUG MACPHERSON, President, Alaska Coastal Pilots Association,                
 stated they are in support the bill and the amendments presented.             
 He said they were particularly supportive of the notion, primarily            
 of the additional pilots and industry members on this board.  He              
 referred to the question of cost which had been brought up and                
 submitted that adding a pilot and industry member to this board               
 will not cost, rather it will pay.  He explained the major costs of           
 this board have resulted from lopsided representation from pilots             
 and industry members, who are not represented on the board.  He               
 indicated the pilots have had their interests trampled on and                 
 subjected the board to litigation in defense of their rights.  He             
 noted if they were represented, this would stop.  He asked the                
 committee to take this into account.                                          
                                                                               
 MR. MACPHERSON referred to Mr. Edwards' comments and stated Mr.               
 Edwards seemed to know more than the National Transportation Safety           
 Board (NTSB) and the Coast Guard put together regarding how                   
 accidents are generated and what causes them.  Mr. MacPherson said            
 this distressed him greatly, since the New Amsterdam grounding was            
 mentioned prominently by Brad Pearce while he was working in the              
 Department of Management and Budget.  Mr. MacPherson said it                  
 bothered him to see these types of conclusions drawn when reports             
 have not yet been generated.  He suggested a lot of money could be            
 saved by resorting to Mr. Edwards' methods and not have the NTSB or           
 the Coast Guard involved; he could do all the investigations for              
 us.                                                                           
                                                                               
 MR. MACPHERSON indicated that fixed tariffs would put an end to               
 competition and piloting, and would probably return us to the                 
 situations in the past, which was not a good situation; it was an             
 unsafe situation.  He said "if you were well connected and had all            
 your political ducks in a row, you could have all the accidents you           
 wanted and somehow no one would ever mention them, or if they did             
 get mentioned, it was in the most mild mannered sense."  He stated            
 with competition, the pilots are under a microscope and the                   
 competitors are not necessarily anxious to see an accident occur,             
 but they are anxious to see a person answer for one when one does.            
                                                                               
 MR. MACPHERSON indicated the Federal Trade Commission (FTC) has               
 concluded, on a nationwide study that there is no correlation                 
 between competition and safety.  He commented this was stated in a            
 report by Charles Harwood which has been distributed locally.  He             
 indicated there is a fairly scholarly body of work from the NTSB              
 that suggests that there is no way to tell if a competitive pilot             
 is a unsafe pilot.  He added with regards to the dispute resolution           
 issue, they are going to continue to take a neutral stance on that            
 issue because he felt there is a better way to solve the problems             
 at hand than to have the state intervene.  He stated that pilot               
 organizations are joint ventures by nature, and it is not clear at            
 this time that any pilot organization has ever had an antitrust               
 action brought against the organization regarding tariffs.                    
                                                                               
 MR. MACPHERSON explained when 20 people decide to join an                     
 organization, they do so to lower prices to benefit the consumer.             
 Otherwise they would need to have 20 people with 20 pilot boats, 20           
 phone numbers, 20 offices and 20 secretaries and the prices would             
 increase.  He said these joint ventures are usually not subjected             
 to antitrust action, the state exemption notwithstanding.  He                 
 indicated with regards to competition, it does exist in other                 
 states.  Alaska is not breaking any ground in that area.                      
 Competition is widely held, throughout the Eastern Seaboard as well           
 as Honolulu and Oregon with state pilots.  To say otherwise is not            
 true.  He mentioned they were dealing with the issue of dispute               
 resolution.  He suggested that since the idea of fixed tariffs has            
 been mentioned repeatedly, the standard could be easily accepted by           
 the industry.  He commented he could not speak for industry, it               
 might be the maximum tariff but cautioned his suggestion.  He                 
 explained a fixed tariff is unacceptable to his organization and              
 would end competition which would result in the previous situation.           
                                                                               
 Number 477                                                                    
                                                                               
 REPRESENTATIVE JAMES asked Mr. MacPherson for clarification                   
 regarding his statement on competition improving safety.  She asked           
 if there was another mechanism that could guarantee safety.                   
                                                                               
 MR. MACPHERSON explained safety is improved in a competitive                  
 situation, because it is unacceptable to do unsafe things to a                
 ship, in other words shortcuts cannot be made.  The consequences of           
 a minor accident are so severe, that for a person to compromise               
 their position, if someone agrees to do something unsafe because he           
 might say "I'm a competitor and do not want to lose any business."            
 This situation he stated is beyond his knowledge.                             
                                                                               
 REPRESENTATIVE JAMES stated it appeared to her that with                      
 competition, there would be more of an inclination to take action             
 than not, because competition establishes a relationship with the             
 pilot and industry that is different than what anyone else has.               
 She stated it was her belief that every marine pilot in the state             
 would not be of such a mind to do those things.  She stated she               
 trusted them and believed their integrity is great.  It appeared to           
 her that with competition, one would be depleting the ability to              
 ensure maximum safety because of the relationship with the industry           
 because of the competition.                                                   
                                                                               
 MR. MACPHERSON said from a competitive stance and being in a client           
 relationship with a company, he could not see how that would                  
 degrade a safety position.  He explained a client cannot be placed            
 in an unsafe position; in fact, if you even make them feel                    
 uncomfortable, they will look around for someone else to do the               
 work that won't make them feel uncomfortable.  He said the facts              
 are not there to bear that out.  He stated he has been faced with             
 this situation on a couple of occasions, and the client was                   
 relieved not to take the chance.  He gave an example where he had             
 requested not to sail the ship and the pilots would say "God, we              
 were hoping you would say that." to which he would reply "of course           
 I would say that if it is a bad situation."  He analogized the                
 situation of a doctor telling a patient that he/she would operate             
 on the patient, but would do it some shortcut way, and the patient            
 responding that they wanted only the best and finest practices                
 employed on their body.  The client's ships are the client's body,            
 and a doctor is as mandatory as a pilot.                                      
                                                                               
 REPRESENTATIVE JAMES asked for clarification on the fact, if we got           
 out of the competition area and went with fixed tariffs, would this           
 eliminate the pilot associations and the need for them.  She stated           
 she saw a purpose for them because who then would do.......                   
                                                                               
 MR. MACPHERSON interjected there would be one pilot association in            
 each region, ultimately.                                                      
                                                                               
 REPRESENTATIVE JAMES indicated they would have to do the                      
 dispatching.                                                                  
                                                                               
 MR. MACPHERSON said yes, they would.                                          
                                                                               
 Number 480                                                                    
                                                                               
 REPRESENTATIVE WILLIAMS asked Mr. MacPherson to elaborate on the              
 issue of maximum tariffs.                                                     
                                                                               
 MR. MACPHERSON said he could not speak for whether the maximum                
 tariff is the answer or not, but it is preferable to a fixed                  
 tariff.  He explained a fixed tariff would "kill off" what we stand           
 for.  He prefers the competitive situation as it is currently where           
 there is no maximum tariff.  He stated the board may waste a lot of           
 time trying to work with the issues of maximum tariffs.  It takes             
 an enormous amount of time and their attention away from more                 
 important issues such as licensing and professional standards, as             
 well as enforcement of those standards.  He indicated setting a               
 tariff can be an all-consuming proposition.  He remarked that he              
 wished he could retract that statement because he only meant it as            
 a suggestion that was "out in left field," from his point of view.            
 He stated he was hoping to keep the tariff sunsetted and let the              
 parties work it out among themselves.                                         
                                                                               
 Number 510                                                                    
                                                                               
 LARRY COTTER, Representative, Alaska Steamship Association (ASA),             
 explained they represent virtually every shipping entity that                 
 employs marine pilots in Alaska, with the exception of the Prince             
 William Sound area.  He added ASA supports all of the amendments,             
 with the exception of Representative Sanders' amendments.  He felt            
 it was inevitable that there will be discussion on the issues of              
 binding arbitration and competition.  He stated the number one                
 priority is safety.  He suggested although everyone that has                  
 testified has indicated the importance of safety, it may be a                 
 higher priority for ASA because in the event of a grounding, their            
 association members will end up incurring millions and millions of            
 dollars of expenses as a result.                                              
                                                                               
 MR. COTTER continued to explain aside from the public policy                  
 perspective resulting from a safety problem, there is an enormous             
 economic incentive to ASA's companies to ensure that all the                  
 vessels move as safely as possible.  With regards to that issue, he           
 referred to Mr. O'Hara's comment on his belief that the safety                
 record in Alaska has been excellent.  He felt that the Board of               
 Marine Pilots has improved training requirements and other aspects            
 that are designed to improve the safety of the pilots that are                
 licensed to operate in Alaska.  ASA has been supportive of those              
 improvements and activities.  He indicated the safety issues are              
 indeed paramount and that people are satisfied with safety                    
 procedures.  If they are not, then that should be worked at through           
 the training programs, licensing requirements and the skill levels            
 of the pilots.  He stated along with all these issues, service is             
 also very important to ASA.  He indicated ASA needs to be able to             
 provide excellent service to the state, the industry and the                  
 public.  This is the only way they survive in a competitive                   
 atmosphere.  He explained when service is considered, then the                
 dollar plays a role.  He stated in this case the dollar bill is               
 called "the cost."                                                            
                                                                               
 MR. COTTER referred to a previous question regarding whether or not           
 the shipping companies would absorb some of the cost associated               
 with adding a couple of new pilot board members; the answer is,               
 yes.  He suggested the answer lies with the industry generally                
 paying for everything that is associated with pilot associations.             
 He referred to the language under the expired act, and said the               
 maximum tariff can take into account dispatch expenses,                       
 transportation expenses and other associated expenses directly                
 related to the provision of pilotage services.  He explained these            
 costs that result from whatever tariff is applied, ASA absorbs                
 those costs and to some extent, will pass them on to their                    
 customer.  He indicated with their competitive atmosphere, they               
 cannot pass them on to the consumer because they have to compete              
 and essentially swallow the expenses themselves.  He stated it                
 seems only fair to them that to the extent that the number one                
 issue--safety--is addressed to everyone's satisfaction, they then             
 have some latitude to deal with the issue of cost.  This should               
 allow it to be affordable in the sense that if there is more than             
 one pilot association, they are free to compete with each other as            
 long as they can meet the safety and public service standards.                
                                                                               
 CHAIRMAN DAVIS said his question would be in relation to the                  
 Department of Law's comments relating the antitrust regulations and           
 the existing language under conflict resolution.                              
                                                                               
 MR. COTTER stated they were supportive of conflict resolution.                
 This was not their first choice, but they were willing to support             
 it.  If conflict resolution is not going to pass muster in the                
 event that it can't satisfy antitrust concerns that the                       
 associations have, then their fall back position will be to support           
 the continuation of the maximum tariff language that was in the               
 bill which expired a year ago.  He noted that the assistant                   
 attorney general said for the occurrence of state oversight                   
 activity, substantive analysis needs to be undertaken as regards to           
 the setting of the tariff.  He referred to the old statute and                
 stated it does require a number of findings regarding costs and how           
 those costs are directly related to providing various services.  He           
 stated if the Board of Marine Pilots has reviewed the required                
 analysis relative to those requirements, then substantive analysis            
 has occurred.                                                                 
                                                                               
 Number 584                                                                    
                                                                               
 REPRESENTATIVE BRICE asked who would be paying for the dispute                
 resolution.  Would it be the person bringing the dispute to the               
 table asking for binding arbitration or would it be decided during            
 the resolution or an even split?                                              
                                                                               
 MR. COTTER indicated it was his opinion, there would be a 50/50               
 split.  This was typical in arbitration disputes or dispute                   
 resolution where both parties absorb half the cost associated with            
 the arbitration.                                                              
                                                                               
 REPRESENTATIVE BRICE expressed concern for pilot associations that            
 are very small, and if they went to arbitration, this would result            
 in taking all possible profits that the associated people might               
 have been able to receive.  He then questioned the cost regarding             
 the fact that if pilot associations are going to have costs hanging           
 over their heads, he felt it would have a "chilling effect" on                
 their ability to address disputes in an economical and reasonable             
 manner.                                                                       
                                                                               
 MR. COTTER remarked the idea is that you do not get to arbitration.           
 He added "good efforts by good people result in good agreements."             
 He hoped dispute resolution is a rare case, and noted in the past             
 he was the president of a labor union in Alaska.  It was a small              
 union but they did not hesitate to pay for their half of                      
 arbitration, if that was necessary.  He suspected this was true of            
 the pilot associations.                                                       
                                                                               
 Number 618                                                                    
                                                                               
 PETER GARAY, Alaska Marine Pilot in Region 3, which encompasses               
 everything west of Kodiak, the Aleutians, the peninsula, and                  
 Bristol Bay and northward to the Canadian Arctic.  He supported               
 Section 2, line 4, regarding the regions being represented on the             
 board versus judicial districts.  He noted pilots on the board                
 should be from the particular area they are working in.  He said in           
 their situation in Region 3, and the judicial district of Region 2,           
 which canvasses the entire area, so if there is only one pilot from           
 the judicial district and two as it is currently with the Southwest           
 pilots, when there is an opening on the board they would not, at              
 this time be able to take advantage of that opening due to the fact           
 there is already a judicial seat taken.                                       
                                                                               
 MR. GARAY explained there should be pilots from their particular              
 region who can bring the problems that are affecting their region             
 to the attention of the state.  He felt they would be able to                 
 articulate the arguments best to the people involved, rather than             
 sitting out in the audience, lobbying the particular board members            
 regarding what is right or wrong with the various problems in that            
 particular region.  Region 3 is a large region and there are a                
 number of problems in Region 3 that they ultimately come back to              
 the state with, and attempt to resolve.                                       
                                                                               
 MR. GARAY disagreed with Mr. O'Hara's statement regarding his                 
 perspective on safety issues with the system of pilotage and how it           
 is working.  He noted he had examples to show from a safety                   
 standpoint, it is not working and stated it was "dirty laundry."              
 He stated he was prepared to give examples on why safety is not               
 being served out there well.  He said several concerns regarding              
 safety were brought up to the Board of Marine Pilots last year and            
 from a board member's point of view, things appeared fine out in              
 this region.  Mr. Garay emphasized the fact this was not true.                
                                                                               
 MR. GARAY asked to address some of the tools of the competitive               
 system of pilotage.  He sees it as service and price.  He explained           
 last year they had their first victory when the maximum tariff                
 "went away," in that they finally had a tool they could use where             
 they could go with a price.  He noted if they did not feel they               
 were getting their fair share of the work or were asked to perform            
 some service out in the Aleutians that would not be profitable,               
 they would have the option to charge whatever they had to in order            
 to make it profitable.  He emphasized it was a tool and indicated             
 he did not think that anyone could point to an Alaska marine pilot            
 and say they have used that tool irresponsibly.                               
                                                                               
 TAPE 95-14, SIDE, A                                                           
 Number 000                                                                    
                                                                               
 MR. GARAY continued to explain, there is fair amount of allocation            
 of the work in this competitive environment to ensure his group of            
 pilots can cover the entire region.  He stated they would like to             
 hang on to that tool, and if not, then the next step would be to go           
 to a fixed tariff.  He agreed that a fixed tariff is a step in the            
 right direction, as long as they continue to economically regulate            
 the entire system of pilots.  He indicated there were other steps             
 necessary, because if just the tariff is fixed, particularly in               
 Region 2, then we are competing for service.  He noted this was a             
 "gray" area because of service/safety, and when they say they are             
 not going to do a job or they can't do a job for whatever reason,             
 somewhere incorporated, is the issue of safety.  He indicated if              
 they don't do it, the option will be given to the other group.                
 They may or may not elect to do it, but the option is there.  He              
 said the next step to be addressed would be the need for service.             
 He indicated there was testimony given on the issue of competition.           
 He stated this was interesting because someone earlier spoke of               
 having a "quasi-competitive" situation and if we truly want to                
 break new ground in this state of Alaska, then there should be a              
 competitive system that is completely unregulated.  He said this              
 would be a real experiment and indicated he would hate to see it go           
 that way, but he would do okay.  He added there would definitely be           
 different prices charged for different customers.  He stated he               
 would just as soon continue to go toward regulation.  There often             
 is an analogy drawn that they are like doctors and lawyers.  They             
 compete and everyone gets band-aids put on their kids' thumbs and             
 indicated pilots should be like doctors and lawyers and when it               
 suits people, they make the argument that we are like fireman and             
 policeman.  He asked the committee if they would like to have a               
 fireman or policeman come to your house who is the low ball bidder.           
 He suggested the pilots were like fireman or policeman because they           
 are a necessary service.  He asked the committee to consider the              
 question of the pilots being doctors or lawyers or fireman and                
 policeman and if we are doctors and lawyers, then we should compete           
 like doctors and lawyers and get rid of all the regulation and let            
 us fight it out.  If we are to be like fireman and policeman, then            
 regulate us.  Mr. Garay asked for questions.                                  
                                                                               
 Number 075                                                                    
                                                                               
 CHAIRMAN DAVIS indicated that was all the people signed up to                 
 testify.  He asked Dan Twohig to approach the table for further               
 questioning as the amendments are addressed.  He asked for a motion           
 to move amendment one.                                                        
                                                                               
 REPRESENTATIVE JAMES made a motion to move amendment one, and asked           
 for unanimous consent.                                                        
                                                                               
 CHAIRMAN DAVIS asked if there was any objection.  He asked Mr.                
 Twohig to comment on this amendment.                                          
                                                                               
 Number 095                                                                    
                                                                               
 DAN TWOHIG, Marine Pilot Coordinator, stated that he and Mr. O'Hara           
 constructed amendment one.  After having consulted with the                   
 Department of Law, he suggested inserting "Coast Guard" in front of           
 the word "inspected."                                                         
                                                                               
 CHAIRMAN DAVIS indicated this would be regarded as a friendly                 
 amendment.  He noted the friendly amendment would read "Coast Guard           
 inspected."  He asked if there was any objection to amendment one.            
 Hearing none, amendment one passed.                                           
                                                                               
 REPRESENTATIVE MACLEAN made a motion to move amendment two and                
 asked for unanimous consent                                                   
                                                                               
 CHAIRMAN DAVIS asked if there was objection to amendment two.  He             
 indicated there was discussion and debate as far as the deletion of           
 the word "chronic" on page 2, lines 30 and 31.  Hearing no                    
 objection, amendment two passed.                                              
                                                                               
 REPRESENTATIVE MACLEAN made a motion to divide amendment three.               
 She explained lines 1 through 6 would be amendment three (a).                 
 Lines 7 through 20 would be amendment three (b).                              
                                                                               
 CHAIRMAN DAVIS asked if there was objection to dividing the                   
 amendment.  Hearing none, the motion passed.                                  
                                                                               
 REPRESENTATIVE MACLEAN made a motion to move amendment three (a).             
                                                                               
 CHAIRMAN DAVIS stated amendment three (a) deletes subsection (c) of           
 Section 14, on page 6.  Chairman Davis asked if there was                     
 objection.  Hearing none, amendment three (a) passed.                         
                                                                               
 Number 142                                                                    
                                                                               
 CHAIRMAN DAVIS indicated amendment three (b) which would also be              
 deleted along with Section 14, but noted the substance of amendment           
 three (b) is further discussed.  He stated with the concurrence of            
 the committee, amendment three (b) would be held as opposed to                
 discarding it completely at this time.  He announced amendment                
 four, on page 7, line 6.                                                      
                                                                               
 REPRESENTATIVE MACLEAN made a motion to move amendment four.                  
                                                                               
 CHAIRMAN DAVIS asked if there was objection.  Representative James            
 objected.                                                                     
                                                                               
 REPRESENTATIVE JAMES asked for clarification on amendment four.               
                                                                               
 MR. TWOHIG explained that Section 8 of CSHB 260 adds a new                    
 subsection (6) which creates the opportunity for pilot associations           
 to develop an apprenticeship program.  He stated a concern that               
 some of the pilot associations had is that the apprenticeship                 
 program would be mandatory upon them.  He referred to AS 08.62.175            
 (d)(3)(C), adds a section under....175 has to do with regional                
 marine pilot organizations and it creates a clause stating these              
 training programs "may" include deputy marine pilot apprenticeship            
 programs; thus making it not mandatory upon each pilot association.           
 He explained if they don't need this program because of the way               
 their training program currently operates, then they should not be            
 mandated to have one because there are other methods of entering              
 the program.                                                                  
                                                                               
 REPRESENTATIVE JAMES asked if some of the pilot organizations would           
 be without a training program by doing this.                                  
                                                                               
 MR. TWOHIG stated no, it would not.                                           
                                                                               
 Number 193                                                                    
                                                                               
 REPRESENTATIVE MACLEAN asked for unanimous consent for amendment              
 four, because it was a good amendment for the inclusion of training           
 programs for the marine pilot apprenticeship program.                         
                                                                               
 REPRESENTATIVE JAMES stated she would withdraw her objection.                 
                                                                               
 CHAIRMAN DAVIS asked if there was objection.  Hearing none,                   
 amendment four passed.  He announced amendment five.                          
                                                                               
 REPRESENTATIVE MACLEAN asked to move amendment five, which again              
 deals with the apprenticeship program.  She indicated the amendment           
 does not require the pilot organizations to establish an                      
 apprenticeship program, but suggests they may establish a deputy              
 marine pilot apprenticeship program.                                          
                                                                               
 CHAIRMAN DAVIS asked if there was objection to amendment five.                
 Hearing none, amendment five passed.                                          
                                                                               
 REPRESENTATIVE MACLEAN asked to move amendment six and strongly               
 recommended the amendment be passed.  She explained the purpose of            
 this amendment was that it makes allowances for the vessels to                
 travel to the destination closest to Point Hope.                              
                                                                               
 CHAIRMAN DAVIS explained it limits the authorization in statute.              
 He asked if Mr. Twohig would care to comment.                                 
                                                                               
 Number 221                                                                    
                                                                               
 MR. TWOHIG stated he "drew those lines" and the actual boundary is            
 a place called Cape Thompson, which is up to and including Point              
 Hope.  He noted the line was drawn for safety reasons, considering            
 the local knowledge involved in different parts of that region.               
                                                                               
 REPRESENTATIVE BRICE asked if the area is north of Red Dog                    
                                                                               
 MR. TWOHIG stated yes, it was north of Red Dog.                               
                                                                               
 CHAIRMAN DAVIS asked if there was objection to amendment six.                 
 Hearing none, amendment six passed.                                           
                                                                               
 REPRESENTATIVE MACLEAN asked to divide the question on amendment              
 seven.  Lines 1 through 6, would be amendment seven (a) and lines             
 7 through 16 would be amendment seven (b).  She explained the                 
 reason for this was because she did not understand why there are              
 three industry representatives.  She inquired as to the marine                
 pilot representatives.  She said lines 7 through 16 do not deal               
 with lines 1 through 6.  She stated this was why she divided the              
 question.                                                                     
                                                                               
 CHAIRMAN DAVIS suggested before we act on a motion to divide the              
 question, he asked Mr. Utermohle to explain the inclusions in line            
 7 through 16.  It appeared to him that this was strictly relating             
 to the selection of the additional members.                                   
                                                                               
 MR. UTERMOHLE explained the second half of amendment seven,                   
 provides for the initial terms of the appointment of the new                  
 members.  In order to maintain a staggered system whereby a new               
 member will be appointed each year, this provides that the first              
 pilot member be appointed for a three year term in order that he              
 may fit into a gap between the two members currently sitting on the           
 board.  He explained one member is currently on the board for                 
 another two years, and the other one is on the board for four                 
 years.  This would put another member's term to expire in three               
 years.  Regarding the industry representative, he said this would             
 provide for an initial term of four years.  He referred to the                
 language on lines 4 through 6 of the amendment and stated this                
 provides that the board would consist of three industry                       
 representatives.  He noted they were replacing the agent and                  
 manager members of the board with industry representatives, and               
 would provide there be three of them, which would be an increase              
 over the two.                                                                 
                                                                               
 REPRESENTATIVE MACLEAN said the reason for her concern was the                
 creation of membership on the board.  Under this particular work              
 draft, there are two pilots licensed under this chapter who may be            
 on the board, but the industry representatives are being increased            
 to three.  She indicated there would be three industry                        
 representatives and two pilots.                                               
                                                                               
 CHAIRMAN DAVIS corrected Representative MacLean's comments and                
 referred to page 1, line 9, which provides for three pilot                    
 representatives and the other part gives the selection times to               
 continue the proper rotation of the appointments.                             
                                                                               
 REPRESENTATIVE MACLEAN withdrew her motion to divide the amendment.           
 She added she was just concerned about the possibility of creating            
 an uneven board.                                                              
                                                                               
 CHAIRMAN DAVIS stated currently there are two pilots, two industry            
 representatives and two public members.  This amendment would                 
 establish provisions for three pilots, three industry members and             
 maintain the two public members.  He indicated there has been                 
 discussion regarding this issue from the alliance group that                  
 attempted to come to terms with a lot of this legislation.  He said           
 this amendment was strongly considered, but a consensus was not               
 reached.  He stated it was his understanding there was not a lot of           
 strong objection to these issues.                                             
                                                                               
 REPRESENTATIVE WILLIAMS made a motion to move amendment seven.                
                                                                               
 CHAIRMAN DAVIS asked if there was objection.                                  
                                                                               
 REPRESENTATIVE JAMES objected for discussion.  She stated with her            
 experience with boards, a nine member board is verging on an                  
 unworkable board.  She expressed concern for the larger these                 
 boards get, the more chance there is for misrepresentation when               
 there is not a full board and there is only a quorum, because the             
 quorum is not identified as to who has to be present.  She                    
 expressed there being an imbalance of people as far as the                    
 representation to a certain degree of influence.  She noted if                
 they're not getting the proper recognition on the board, it would             
 be her personal opinion to make it smaller, rather than bigger.               
 She added cost is not the issue.  She reiterated her concerns that            
 the bigger the board, the more problems there are.  The smaller the           
 board, the better opportunity and less chance for one side to have            
 a stronger input, especially if there are specifically designated             
 seats.  Representative James withdrew her objection.                          
                                                                               
 CHAIRMAN DAVIS asked if there was objection on amendment seven.               
 Hearing none, amendment seven passed.                                         
                                                                               
 REPRESENTATIVE JERRY SANDERS made a motion to move amendment eight.           
                                                                               
 REPRESENTATIVE MACLEAN objected.  She said the reason was because             
 we just adopted amendment three (a) and we incorporated subsection            
 (d) to (c) and stated she was satisfied with this. It recognizes              
 that a person licensed under this chapter is a member of a pilot              
 organization.  She indicated the amendment seemed harmless and                
 would maintain her objection.                                                 
                                                                               
 CHAIRMAN DAVIS stated he, too, would speak against the deletion of            
 subsection (d).  As indicated, amendment three (a) did delete                 
 Section 14 (c) and (d) is now (c).                                            
                                                                               
 REPRESENTATIVE MACLEAN explained the language of the new subsection           
 (c), under Section 14, states "a person licensed under this                   
 chapter, who is a member of a pilot organization shall provide                
 pilotage services to a vessel upon being dispatched by the pilot              
 organization of which is a member."  She indicated this was                   
 Representative Sanders' amendment.                                            
                                                                               
 CHAIRMAN DAVIS explained that on page 6, currently in Section 14              
 (d) remains in the bill; it has just been re-lettered (c), since              
 (c) was deleted.                                                              
                                                                               
 REPRESENTATIVE SANDERS asked if (c) was deleted.                              
                                                                               
 CHAIRMAN DAVIS stated "if you take (d) and make it a (c) that is              
 what we currently have."                                                      
                                                                               
 REPRESENTATIVE MACLEAN said the original (c) was deleted, so (d)              
 became a (c) and the new (c) reads "a person licensed under this              
 chapter shall provide pilotage services to a vessel upon being                
 dispatch by the pilot organization of which is a member."                     
                                                                               
 Number 380                                                                    
                                                                               
 REPRESENTATIVE BRICE explained that Representative Sanders'                   
 amendment is still necessary, because we are still mandating that             
 a pilot has to go out regardless of the standards or the situation            
 in which the negotiation between industry and the pilot                       
 organization exists.  He thought this caused some concern in that             
 it is neither fish nor fowl as far as whether or not it is going to           
 be fixed rate versus some other type of maximum tariff rate.                  
                                                                               
 REPRESENTATIVE MACLEAN referred to amendment ten which deletes                
 Section 17 (d) and 18 in their entirety, which she supports.  She             
 added there should be some guidelines for the pilots and this is              
 the lesser of the sections.                                                   
                                                                               
 CHAIRMAN DAVIS indicated this just falls under the entire act                 
 regarding that the state wants to mandate that pilotage services be           
 provided.  He indicated this is what amendment ten is stating.                
                                                                               
 REPRESENTATIVE BRICE disagreed with Chairman Davis, and indicated             
 it was stating that the pilot would be mandated to serve.                     
                                                                               
 CHAIRMAN DAVIS asked Representative Brice what would be the problem           
 with that.  He added we are mandating that pilotage services will             
 be provided.                                                                  
                                                                               
 REPRESENTATIVE BRICE said no, and explained what we are mandating             
 is that, regardless of the situation relating to contracts and                
 negotiations, we would compel a pilot to possibly go without a                
 contract, without knowing the limits of the tariff, and regardless            
 of the payment situation.                                                     
                                                                               
 REPRESENTATIVE SANDERS asked if the pilot's organization would                
 dispatch him under those conditions?                                          
                                                                               
 MR. TWOHIG stated in order to make Sections 17 and 18 work, there             
 has to be a requirement of a pilot to accept the job when he's                
 called.  He explained from the state's perspective, it is a policy            
 call as to whether or not the legislature wants to have competition           
 or not.  He noted the requirement of the pilot to respond when                
 dispatched also is dependent on if the pilot looks out the window             
 and say "hey, the weather is bad, we're not going."  He indicated             
 there has been testimony presented today where Captain MacPherson             
 said this would not happen.  Mr. Twohig stated unfortunately it has           
 happened.  He explained a pilot organization was requested to move            
 a vessel, the wind was blowing 40 to 60 knots, the pilot looked out           
 the window and made the decision not to provide service because it            
 was not safe.  The industry went to the other pilot organization              
 and asked for their opinion; the guy flipped a coin and said okay             
 I will do it....                                                              
                                                                               
 CHAIRMAN DAVIS interjected that was hearsay.                                  
                                                                               
 REPRESENTATIVE SANDERS acknowledged there was a pilot that wanted             
 to testify on this particular amendment.                                      
                                                                               
 Number 451                                                                    
                                                                               
 MR. ANTONSEN, pilot, Southeast Alaska Pilots Association explained            
 they were not being asked...that when the association is requested            
 that they have to dispatch, I think the (indisc.) of the amendment            
 has already been addressed and currently reads, when an association           
 is dispatching to a ship, a pilot will be dispatched.  He said they           
 were not talking about industry saying "we want to use your                   
 services, even though we do not have a contract, you have to go."             
 He stated this has been amended to clarify that if an association             
 is providing dispatch to that particular ship, the pilot when                 
 dispatched shall serve.                                                       
                                                                               
 CHAIRMAN DAVIS asked to clarify that Mr. Antonsen had no objection            
 to the inclusion of subsection (d) that is now (c).                           
                                                                               
 MR. ANTONSEN stated that was correct.                                         
                                                                               
 Number 463                                                                    
                                                                               
 REPRESENTATIVE BRICE asked if this is what the new Section 14                 
 states?                                                                       
                                                                               
 MR. UTERMOHLE explained the amendment would delete the requirement            
 that a pilot has to provide pilotage services when dispatched by              
 his pilot organization.  He thought the larger issue is whether or            
 not the pilot organization is required to dispatch a pilot                    
 regardless of whether or not they have an agreement with the                  
 vessel.  He explained as this bill is currently drafted, it is                
 envisioned that such a situation may arise.  This is why the                  
 binding arbitration requirements are there, to ensure once the                
 services are provided in the absence of an agreement, arbitration             
 will occur and the pilots do get paid, if there is not a previous             
 agreement.                                                                    
                                                                               
 Number 479                                                                    
                                                                               
 REPRESENTATIVE SANDERS made a motion to withdraw amendment eight.             
                                                                               
 REPRESENTATIVE JAMES questioned whether the state should be telling           
 an association what their association members should do.                      
                                                                               
 CHAIRMAN DAVIS asked if there was objection on the withdrawal of              
 amendment eight.  Hearing none, amendment eight was withdrawn.                
                                                                               
 REPRESENTATIVE SANDERS made a motion to move amendment nine.                  
                                                                               
 CHAIRMAN DAVIS asked if there was objection.                                  
                                                                               
 REPRESENTATIVE MACLEAN objected for discussion and asked for                  
 clarification regarding the deletion of subparagraph (3), lines               
 26-30, on page 6.  Then moving it to page 7, with the same language           
 and insert paragraph (d).  She asked if shouldn't it read (7)?                
                                                                               
 CHAIRMAN DAVIS asked Mr. Utermohle to respond to Representative               
 MacLean's comment.  He indicated currently it reads (c) (3).                  
                                                                               
 Number 491                                                                    
                                                                               
 REPRESENTATIVE MACLEAN suggested that the amendments needed to be             
 renumbered accordingly.  She explained amendment three is now                 
 deleted, amendment four would become amendment three and amendment            
 five would become amendment four, and amendment six would become              
 amendment five.                                                               
                                                                               
 CHAIRMAN DAVIS asked for clarification on these issues from Ms.               
 Horetski.                                                                     
                                                                               
 Number 509                                                                    
                                                                               
 MS. HORETSKI said she would just explain what the amendment did and           
 the reason for moving it from paragraph 3 to (d) and the operative            
 language is "shall" versus "may."  She referred to the lead in                
 language on page 6, line 21, Section 16 (c) states, "a pilot                  
 organization recognized by the Board shall...."  Ms. Horetski                 
 emphasized this implied it is mandatory and existing law.  She                
 stated there was concern that paragraph (3) as proposed to be                 
 amended, required the association to enter into agreements.  She              
 indicated if it is moved to subsection (d) then there is going to             
 be different lead in language where it states "may" instead of                
 "shall" and indicated this was the operative changes.                         
                                                                               
 CHAIRMAN DAVIS asked for clarification that the intent was to have            
 a paragraph (d).                                                              
                                                                               
 Number 561                                                                    
                                                                               
 REPRESENTATIVE MACLEAN withdrew her objection, but requested to               
 renumber the amendments accordingly.                                          
                                                                               
 MR. UTERMOHLE explained this amendment will require some                      
 restructuring of the language of the bill.  He commented the                  
 appropriate changes will be made as a new subsection.                         
                                                                               
 CHAIRMAN DAVIS withdrew his objection as well.  He stated without             
 any objection, amendment nine passed.                                         
                                                                               
 REPRESENTATIVE SANDERS made a motion to move amendment ten and                
 stated the following sections need to be renumbered.                          
                                                                               
 CHAIRMAN DAVIS objected for discussion.  He expressed concern for             
 the section regarding binding arbitration.  He felt it necessary              
 that there should be some sort of procedure in statute to indicate            
 an "emergency situation" because the state is concerned most with             
 safety issues.  He stated part of the concerns have been the                  
 legality of the approach taken.  He stated he would not object to             
 the amendment.  He noted through the debate and discussion today,             
 additional complications have arisen.  He stated because of the               
 need for legislation and because of additional committees where               
 specific items can be addressed and further expounded upon, it was            
 not his intent to pass anything on to another committee at this               
 time.  He stated it was his intent to complete the groundwork here            
 and hopefully come to some sort of consensus.   He felt the                   
 committee did what it could.  He asked if there was objection to              
 amendment ten.                                                                
                                                                               
 REPRESENTATIVE MACLEAN supported amendment ten and the deletion of            
 Section 17 (d) and 18 in their entirety.  She explained that                  
 currently, the state laws indicate that the courts are the entities           
 that decide the disputes between the marine pilots association and            
 any other disputes that may arise.                                            
                                                                               
 REPRESENTATIVE WILLIAMS stated he also supported amendment ten.               
                                                                               
 REPRESENTATIVE JAMES stated she supported the amendment as well.              
 She believed there was language that could be incorporated into the           
 bill that would meet the desired effect without having this                   
 particular language.                                                          
                                                                               
 CHAIRMAN DAVIS asked if there was objection.  Hearing none,                   
 amendment ten passed.                                                         
                                                                               
 MR. TWOHIG stated from the turmoil he created a moment ago, he                
 misunderstood amendment eight; he thought it was tied into                    
 amendment ten and misspoke.                                                   
                                                                               
 CHAIRMAN DAVIS announced without objection, amendment three (b)               
 will be withdrawn.                                                            
                                                                               
 REPRESENTATIVE JAMES made a motion to move CSHB 260(TRA) as amended           
 out of the House Transportation Committee with individual                     
 recommendations and attached fiscal notes.                                    
                                                                               
 CHAIRMAN DAVIS asked for objection.  Hearing none, CSHB 260(TRA) as           
 amended, is passed out of the House Transportation Committee.                 

Document Name Date/Time Subjects