Legislature(2007 - 2008)BELTZ 211

02/28/2008 09:00 AM Senate STATE AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SJR 12 CRUISE SHIP PORT TIMES: JONES ACT TELECONFERENCED
Moved CSSJR 12(STA) Out of Committee
*+ SB 276 STATE CONSTRUCT'N PROJECT LABOR AGREEMENT TELECONFERENCED
Heard & Held
*+ SB 208 SEX OFFENSES: 'WITHOUT CONSENT' DEFINED TELECONFERENCED
<Bill Hearing Postponed>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ SB 218 CHILD SAFETY SEATS & SEAT BELTS TELECONFERENCED
<Bill Waived from Committee>
            SJR 12-CRUISE SHIP PORT TIMES: JONES ACT                                                                        
                                                                                                                              
9:02:44 AM                                                                                                                    
CHAIR MCGUIRE announced the consideration of SJR 12.                                                                            
                                                                                                                                
SENATOR BUNDE  moved to  adopt the  committee substitute  (CS) to                                                               
SJR 12, labeled 25-LS1292\E, Kane.  Hearing no objection, Version                                                               
E was before the committee.                                                                                                     
                                                                                                                                
SENATOR GENE  THERRIAULT, Alaska  State Legislature, said  SJR 12                                                               
opposes proposed  changes to the interpretation  of the Passenger                                                               
Vessel Services  Act of 1886  by the U.S. Department  of Homeland                                                               
Security  (DHS), which  would affect  the  cruise itineraries  of                                                               
foreign-flagged  vessels transporting  passengers  to Alaska.  In                                                               
November,  DHS  published  a  new  interpretation  requiring  all                                                               
foreign-flagged  cruise ships  to spend  at least  48 hours  in a                                                               
foreign  port, spend  at least  50 percent  of the  time that  is                                                               
spent at U.S.  ports at foreign ports, and  require passengers to                                                               
depart  at  a  foreign  port.   The  industry  brings  a  million                                                               
passengers to Alaska each year,  and this new interpretation will                                                               
mean  158 fewer  voyages and  349,000 fewer  passengers. It  will                                                               
result in a loss of  $222 million that supports Alaska businesses                                                               
in coastal communities  and beyond. The public  comment period is                                                               
closed so  the statement  will not  be officially  submitted into                                                               
the public record,  but a decision has not been  rendered. The CS                                                               
makes it clear that Alaska  opposes the interpretation, but if it                                                               
is adopted, SJR 12 asks that Alaska be exempted.                                                                                
                                                                                                                                
9:06:05 AM                                                                                                                    
SENATOR BUNDE asked if this  interpretation was developed because                                                               
of  some  problems with  foreign-flagged  cruise  ships going  to                                                               
Hawaii and spending a few hours in Mexican ports.                                                                               
                                                                                                                                
SENATOR THERRIAULT  said the new interpretation  does spring from                                                               
a problem in Hawaii.  American-flagged ships provide intra-island                                                               
service, and  "over time the  large cruise ships  that seasonally                                                               
come to  the state of  Alaska, some of  them were going  from the                                                               
West Coast over  to Hawaii, around the islands, and  to avoid the                                                               
problem with the old ruling, they  would then go to Mexico, touch                                                               
base at  a port  there overnight,  and then go  back to  the West                                                               
Coast."   That  is   what  triggered   this.  The   determination                                                               
continually  refers to  the Hawaiian  market, and  at the  end it                                                               
refers to any cruise itinerary, thereby sweeping in Alaska.                                                                     
                                                                                                                                
9:08:02 AM                                                                                                                    
WAYNE  STEVENS, President,  State Chamber  of Commerce,  said his                                                               
board  supports SJR  12. It  is on  record opposing  the proposed                                                               
criteria to  determine if  foreign-flagged passenger  vessels are                                                               
in  violation  of  the  Passenger  Services  Vessels  Act.  While                                                               
intended to solve  a problem in Hawaii,  the interpretation isn't                                                               
limited  to Hawaii  and could  be interpreted  to include  cruise                                                               
runs to Alaska  from Seattle or San Francisco. This  is one third                                                               
of the  cruises coming to Alaska.  It will not affect  ships from                                                               
Vancouver,  B.C.  The  loss  of  ships  will  be  devastating  to                                                               
Alaska's  communities and  delicate  economy. The  interpretation                                                               
could be in effect for the  2008 summer season. The loss of jobs,                                                               
revenue, and  taxes will be  crippling. If cruise ships  spend 48                                                               
in foreign ports and 50 percent  of port time in foreign ports on                                                               
round-trip  voyages from  Seattle  to Alaska,  it  will make  the                                                               
existing seven-day  itineraries impossible. The  only alternative                                                               
will be for ships  to spend less time in Alaska  and more time in                                                               
Canada.  The proposed  changes are  a significant  departure from                                                               
industry  practice   and  not   an  interpretation   of  existing                                                               
regulations.  These  proposed  changes will  affect  all  tourism                                                               
communities.  Cruise  passengers  typically fly  from  Alaska  to                                                               
connect to  the ships. The solution  to a problem in  Hawaii will                                                               
be of significant detriment to Alaska and its cruise industry.                                                                  
                                                                                                                                
9:11:14 AM                                                                                                                    
CHAIR  MCGUIRE asked  what  the chamber  is  doing nationally  to                                                               
influence the regulation writers in Washington D.C.                                                                             
                                                                                                                                
MR. STEVENS said the chamber has been commenting.                                                                               
                                                                                                                                
CHAIR MCGUIRE asked about the chances of success.                                                                               
                                                                                                                                
MR. STEVENS said there is potential to get it overturned.                                                                       
                                                                                                                                
SENATOR  BUNDE  asked  about  Seattle  losing  business,  and  if                                                               
Washington State is doing anything.                                                                                             
                                                                                                                                
MR. STEVENS said he believes they are commenting.                                                                               
                                                                                                                                
9:12:35 AM                                                                                                                    
JEREMY GEISER, President, Juneau  Chapter, Alaska Travel Industry                                                               
Association, said he  is also the manager  for Gastineau Guiding.                                                               
If a  third of  the port  calls are lost  in Juneau,  his company                                                               
will lose  one third  of its  business including  some year-round                                                               
jobs.  All  of  those  jobs  will go  to  British  Columbia.  The                                                               
proposed  interpretation  will  impact the  communities,  visitor                                                               
services, and  indirect businesses.  Each organization  stands to                                                               
suffer  economic  hardships,  and  the resolution  will  send  an                                                               
important message.                                                                                                              
                                                                                                                                
CHIP  THOMA,  Juneau, said  all  the  cruises that  emanate  from                                                               
Vancouver are legal,  but the Seattle ones are  illegal under the                                                               
Passenger  Services  Act.  The  complication  can  be  solved  by                                                               
Vancouver building  more dock spaces  and taking over  the entire                                                               
trade. The  problem with the  Seattle-based cruises is  that once                                                               
they leave Seattle, they don't  spend any time in Canadian waters                                                               
until they come back and  provide an eight-hour tour of Victoria.                                                               
The ships  then go back to  Seattle. That is the  token stop. The                                                               
San Diego trade  stops in Ensenada, Mexico, in the  middle of the                                                               
night for  a few hours. He  said he supports the  resolution, but                                                               
it  should be  more focused.  On line  6, of  page 1,  instead of                                                               
saying  the cruise  ship  industry,  it should  say  the Port  of                                                               
Seattle. On line  8, after "cruise ships", it  should say "cruise                                                               
ships from Seattle".                                                                                                            
                                                                                                                                
9:16:41 AM                                                                                                                    
DON HABEGER,  Regional Vice  President, Royal  Caribbean, Juneau,                                                               
said the industry is on the  record in opposition to the proposed                                                               
regulations. The best trade organization  for getting cruise ship                                                               
messages out is "our membership"  and the Association of American                                                               
Port Authorities.  They say the  rule would  drastically restrict                                                               
vacation  options for  cruise passengers,  and they  specifically                                                               
mention  Alaska. It  would limit  cruise  markets to  itineraries                                                               
with a single  U.S. port of call, driving all  Alaska business to                                                               
Canada and  Hawaii business to  Mexican Ports. It  will eliminate                                                               
Key  West Florida,  and numerous  East  Coast and  Gulf ports  of                                                               
call. He said  there is a controversy in the  Hawaiian market. He                                                               
comes from  the foreign-flagged  side of  the industry,  and they                                                               
have  a  different  niche in  that  market.  The  foreign-flagged                                                               
cruises  to Hawaii  are  14-15  days long  and  have a  different                                                               
clientele. The  U.S.-flagged ships in Hawaii  are typically seven                                                               
nights. He thinks there is room  for both in Hawaii. The proposed                                                               
regulation  will   drastically  change  the  business   in  North                                                               
America. He supports the resolution.                                                                                            
                                                                                                                                
9:19:47 AM                                                                                                                    
SENATOR FRENCH  asked if the  governor received an answer  to her                                                               
letter sent in December, 2007.                                                                                                  
                                                                                                                                
HEATHER  BRAKES,  Staff  to   Senator  Therriault,  Alaska  State                                                               
Legislature, said she believes she has not.                                                                                     
                                                                                                                                
SENATOR  BUNDE moved  to report  the CS  to SJR  12, labeled  25-                                                               
LS1292\E,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s). There being  no objection, CSSJR 12(STA)                                                               
passed out of committee.                                                                                                        
                                                                                                                                

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