Legislature(1995 - 1996)

03/22/1995 01:48 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         March 22, 1995                                        
                           1:48 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chairman                                   
 Representative Jeannette James                                                
 Representative Tom Brice                                                      
 Representative Jerry Sanders                                                  
 Representative Bill Williams                                                  
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Eileen MacLean                                                 
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 * HB 260:   "An Act relating to marine pilots and the Board of                
             Marine Pilots; extending the termination date of the              
             Board of Marine Pilots and providing for an effective             
             date."                                                            
                                                                               
             HEARD AND HELD                                                    
                                                                               
 (* First public hearing)                                                      
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JEFF BUSH, Deputy Commissioner                                                
 Department of Commerce & Economic Development                                 
 P.O. Box 110800                                                               
 Juneau, Alaska  99811                                                         
 Telephone: (907) 465-2500                                                     
 POSITION STATEMENT:  Supported CSHB 260 (TRA)                                 
                                                                               
 DAN TWOHIG, Marine Pilot Coordinator                                          
 Board of Marine Pilots                                                        
 Division of Occupational Licensing                                            
 Department of Commerce & Economic Development                                 
 P.O. Box 110800                                                               
 Juneau, Alaska  99811                                                         
 Telephone: (907) 465-2548                                                     
 POSITION STATEMENT:  Provided technical information                           
                                                                               
 RON LORENSEN, Attorney                                                        
 Law Offices of Simpson, Tillinghast, Sorensen and Lorensen                    
 Northern Transport Canadian Limited                                           
 One Sealaska Plaza, Suite 300                                                 
 Juneau, Alaska  99811                                                         
 Telephone: (907) 586-1400                                                     
 POSITION STATEMENT:  Provided legal information                               
                                                                               
 MICHAEL O'HARA, Pilot                                                         
 Southwestern Alaska Pilots Association; and                                   
 Board Member, Alaska Marine Pilots Association                                
 P.O. Box 1443                                                                 
 Palmer, Alaska  99645                                                         
 Telephone (907) 235-8783                                                      
 POSITION STATEMENT:  Supported CSHB 260 (TRA)                                 
                                                                               
 STUART MORK, Representative                                                   
 Alaska Marine Pilots Association                                              
 P.O. Box 730                                                                  
 Dutch Harbor, Alaska  99192                                                   
 Telephone: (907) 581-1240                                                     
 POSITION STATEMENT:  Supported CSHB 260 (TRA) with concern                    
                                                                               
 HANS ANTONSEN, Representative                                                 
 Southeastern Alaska Pilots Association                                        
 P.O. Box 6100                                                                 
 Ketchikan, Alaska  99901                                                      
 Telephone: (907) 225-9696                                                     
 POSITION STATEMENT: Supported CSHB 260 (TRA) with concern                     
                                                                               
 JOE KYLE, Representative                                                      
 Alaska Steamship Association                                                  
 234 Gold Street                                                               
 Juneau, Alaska  99801                                                         
 Telephone: (907) 586-3107                                                     
 POSITION STATEMENT: Supported CSHB 260 (TRA) with concern                     
                                                                               
 ERIC ELIASSEN, President                                                      
 Southwestern Alaska Pilots Association                                        
 P.O. Box 977                                                                  
 Homer, Alaska  99507                                                          
 Telephone: (907) 346-1417                                                     
 POSITION STATEMENT:  Supported CSHB 260 (TRA with concern                     
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 260                                                               
 SHORT TITLE: MARINE PILOTS                                                    
 SPONSOR(S): TRANSPORTATION                                                    
                                                                               
 JRN-DATE      JRN-PG              ACTION                                      
 03/15/95       745    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/15/95       745    (H)   TRANSPORTATION, LABOR & COMMERCE                  
 03/22/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-10, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Transportation Committee was called to order by Chairman            
 Gary Davis at 1:48 p.m.  Members present at the call to order were            
 Representatives Davis, Masek, Brice, and Williams.  Members absent            
 were Representative MacLean.                                                  
                                                                               
 HB 260 - MARINE PILOTS                                                      
                                                                               
 CHAIRMAN GARY DAVIS announced the agenda was to hear testimony on             
 HB 260.  He stated he had a Committee Substitute (CS) prepared for            
 HB 260 and requested a motion to adopt the CS as the working                  
 document.                                                                     
                                                                               
 REPRESENTATIVE BILL WILLIAMS made a motion to adopt the CS for HB             
 260(TRA).                                                                     
                                                                               
 CHAIRMAN DAVIS asked if there was objection.  Hearing none, CSHB              
 260(TRA) was adopted as the working document.  Chairman Davis                 
 stated there were a few items within the CS that he wanted to point           
 out.  He said Section 14 introduces new language relating to the              
 requirement for a marine pilot to pilotage services.  Section 17 is           
 new language relating to the requirement for a marine pilot to                
 provide service, if requested by a representative of a vessel, and            
 Section 18 introduces new language in paragraph (a), allowing                 
 binding arbitration between a pilot organization and a vessel when            
 there is not an existing agreement.                                           
                                                                               
 CHAIRMAN DAVIS stated it was his intention to hear debate and                 
 discussion on CSHB 260(TRA).  Chairman Davis introduced Jeff Bush             
 with the Department of Commerce and Economic Development.                     
                                                                               
 JEFF BUSH, Deputy Commissioner, Department of Commerce and Economic           
 Development (DCED); and Commissioner's appointee to the Board of              
 Marine Pilots, stated the department supports this legislation in             
 general, particularly the extension of the board and its regulatory           
 authority.  He commented there were a few points he wanted to                 
 elaborate on, but his intentions were not to go through the entire            
 bill in detail.                                                               
                                                                               
 MR. BUSH referred to Section 6, page 2, line 31, and expressed                
 concern for the words "chronic shortage."  He said this particular            
 provision was designed to allow for, what has been referred to, as            
 "cross regionalization."  He explained this term indicates that               
 generally a pilot can only be licensed in one region.  This would             
 allow for the situation where if there was a shortage of pilots in            
 a particular region, the commissioner could determine the shortage            
 and the board could make allowances for cross regionalization of              
 the pilots.  He indicated the department's concerns were with the             
 words "chronic shortage."  He said he was not sure exactly what               
 this term implies, but suggested the intentions were for the                  
 allowance of pilots to be able to work in other regions whenever a            
 shortage occurred, and not necessarily debating over what                     
 constitutes a chronic shortage.                                               
                                                                               
 MR. BUSH noted on page 3, several limitations as to how this                  
 shortage may occur and how it is subject to consultation with a               
 pilot organization.                                                           
                                                                               
 MR. BUSH referenced Section 8 on page 4, paragraph (6), and                   
 remarked this section would allow for an apprenticeship program to            
 allow pilots to obtain a pilots license through an apprenticeship             
 program.  He said the department is strongly in favor of this                 
 particular provision.  In general, this particular idea will be               
 supported by a majority of the people testifying.  He added it was            
 a situation consistent with most other jurisdictions that have                
 apprenticeship programs.  It also allows the licensing of pilots in           
 situations where they can't otherwise get master time at sea.                 
                                                                               
 MR. BUSH referred to page 6, Section 14, lines 4 through 6                    
 regarding the newly proposed subsection (c).  He asked the                    
 committee members to consider deleting subsection (c).  This                  
 section refers to a person licensed under the chapter who is not a            
 member of a pilot organization.  He said, in fact other statutes              
 require all pilots to be members of an association in order to                
 obtain a license.  He indicated this particular subsection is                 
 inconsistent with the existing law.                                           
                                                                               
 Number 164                                                                    
                                                                               
 MR. BUSH said he had some serious concerns regarding Section 18 on            
 page 7.  He said he did not want to get into a debate over the                
 merits of binding arbitration; quite frankly, the Administration              
 takes no position on the merits of binding arbitration and will               
 leave it to the industry and the pilots, as well as the wisdom of             
 the legislature, to decide whether or not it is appropriate.                  
                                                                               
 MR. BUSH stated concerns for the newly proposed subsection (a), of            
 Section 18 on page 7, lines 16 and 17.  He explained if there is              
 going to be binding arbitration, he felt the state should not be              
 involved in it.  The way this particular subsection is written, it            
 states that a pilot or pilot organization and the vessel owners or            
 agents "may request the marine pilot coordinator to appoint an                
 arbitrator."  He said from an administrative and management                   
 standpoint, he did not feel it was appropriate for the marine pilot           
 coordinator to be the one appointing arbitrators.  He noted that is           
 provided for in current statute, and all of subsection (b) relates            
 to those sections relating to arbitration and an arbitration                  
 provision allowing for arbitration to be done between parties, if             
 arbitration is appropriate.                                                   
                                                                               
 MR. BUSH requested the deletion of subsection (a), and the                    
 situations that subsection (a) applies to be rolled into subsection           
 (b).  Therefore, in all cases where arbitration is going to be                
 held, it would be done under the provisions provided under the                
 current subsection (b), on page 7 of CSHB 260(TRA).                           
                                                                               
 MR. BUSH stated his final point referred to page 3, Section 6, line           
 3, relating to shortages in particular regions and once the                   
 commissioner determines there is a shortage of pilots in a region,            
 it states the board may "after consultation with and concurrence by           
 the recognized pilot organizations."  Mr. Bush noted the Department           
 of Commerce and Economic Development (DCED) has been advised that             
 "concurrence" cannot be required as a legal issue by a private                
 organization for state action.  He explained they do not have a               
 problem with the wording of "consultation," but there is a legal              
 problem in that before a state agency can take action that is                 
 delegated to it administratively by statute, requiring that they              
 have the approval of the private entity.  He stated the committee             
 may wish to take this matter up with the Department of Law or their           
 legal representatives.  Mr. Bush asked if there were questions.               
                                                                               
 Number 197                                                                    
                                                                               
 CHAIRMAN DAVIS stated that he, too, has concern with most of the              
 issues raised by Mr. Bush.  He indicated some of those concerns are           
 in the drafting and working back and forth with the drafting                  
 office.  He noted a couple of those points were not intended to be            
 in this draft.  The word "chronic" was one of them and Section 14,            
 subsection (c) was another he did not feel was needed.                        
                                                                               
 REPRESENTATIVE JEANNETTE JAMES indicated she did not have a problem           
 with the word "chronic" because it has a meaning which implies a              
 situation is ongoing as opposed to "acute" which implies initial              
 action.                                                                       
                                                                               
 Number 224                                                                    
                                                                               
 CHAIRMAN DAVIS concurred with Representative James and indicated              
 this would determine what sort of latitude we, the legislature,               
 wants to give the department.  He agreed it was important to let              
 the department determine the "shortage" so they could make the                
 determination of dispatching a pilot to a specific region.                    
                                                                               
 MR. BUSH responded to Chairman Davis's remarks by stating this was            
 the situation they are concerned with.  He noted they do not want             
 to have to wait for the third incidence, for example, because they            
 have requirements by law that every ship entering the waters within           
 the regulated regions has to have a pilot on board.  He indicated             
 from a safety perspective, we don't want to have to wait to react             
 to something that we see as a forthcoming problem, but we want to             
 be able to react when the shortage first occurs.                              
                                                                               
 MR. BUSH mentioned there are safeguards built in the bill, because            
 first the commissioner has to determine the existence of a                    
 shortage, and second, the board has to meet presumably, if in the             
 event a problem arises.  The board would then have to organize a              
 special session and recognize the fact there is a shortage and make           
 the decision to allow "cross regionalization" for that particular             
 case.  He remarked they would like to be able to react as quickly             
 as possible when the problem first arises.                                    
                                                                               
 Number 248                                                                    
                                                                               
 REPRESENTATIVE BILL WILLIAMS asked if Mr. Bush was familiar with a            
 report that was put out by the Office of Management and Budget,               
 (indisc.) Alaska Marine Pilot.                                                
                                                                               
 MR. BUSH indicated he was familiar with the report.                           
                                                                               
 REPRESENTATIVE WILLIAMS asked if Mr. Bush had any comments on this            
 report.                                                                       
                                                                               
 MR. BUSH stated this particular report was discussed at length, at            
 the last Board of Marine Pilots meeting.  He indicated as a member            
 of the board, he felt compelled to agree with the conclusions of              
 the board and this was also his position on that report.  Mr. Bush            
 indicated the conclusions of the report were not necessarily                  
 supported by the evidence presented; however, they were not taking            
 positions on whether or not the conclusions were valid, but more of           
 the approach utilizing the report which raised a question.  He                
 indicated there was a position directly counter to that taken by              
 the Federal Trade Commission (FTC).  They made basically the same             
 comment to the FTC's report.  He said his position, with respect to           
 the ideas raised in that report, was that they are currently                  
 working under a Marine Pilot Act, and this Administration would               
 like to move ahead under the existing Act and accept the Act as the           
 way the industry will be regulated and make changes to that act to            
 improve it, but not completely dismantle the system and start all             
 over.  He stated these were the implications raised by that report.           
 He stated they would not support that at this time.  Mr. Bush                 
 stated this particular board has been under a great deal of                   
 litigation and controversy.  He felt he could speak for the board             
 in that there seems to be a consensus for moving ahead and to spend           
 less time arguing over how we should be regulated, but rather                 
 concentrate on what improvements could be made to the regulatory              
 system.                                                                       
                                                                               
 Number 260                                                                    
                                                                               
 REPRESENTATIVE WILLIAMS inquired as to the outcome of that                    
 particular board meeting.  He said he had heard there was supposed            
 to be a bill presented, but no one was specific about the contents            
 of that bill.  He said the word he got from some people was that              
 everyone accepted what was in the bill.                                       
                                                                               
 MR. BUSH explained this particular board meeting Representative               
 Williams referred to, was his first board meeting and he had only             
 been on the job two days.  He stated he could not explain the                 
 background previous to that meeting, but he did mention that the              
 pilots and the industry converged on numerous occasions.  He added            
 these meetings were not the actual board meetings, they were side             
 groups that were meeting.  He said there were discussions on what             
 could be incorporated into a proposal that would be accepted by               
 everyone involved.  He indicated at least 90-95 percent of the CSHB           
 260(TRA) is the result of those efforts to some extent.  He added             
 there were people in the room that will disagree with particular              
 sections, but 90 percent of this act is what everyone has agreed to           
 as a good approach.  Mr. Bush commented to expect an industry with            
 the amount of money and diverse interests at stake as this one, to            
 all agree 100 percent would be unrealistic.  He concluded this is             
 why CSHB 260(TRA) has been brought before the legislature to decide           
 what is appropriate and what is not.                                          
                                                                               
 Number 320                                                                    
                                                                               
 CHAIRMAN DAVIS commented on the binding arbitration section being             
 the most controversial section of the bill.  Chairman Davis stated            
 from "his viewpoint it appears a conflict resolution, should a                
 conflict arise where the state's safety, the purpose of the marine            
 pilots legislation altogether is for the safety of the state."  He            
 stated he wanted to get a historic perspective from the need for              
 that conflict resolution.  He asked if there has been an instance             
 that can be cited to further justify the inclusion of a conflict              
 resolution.                                                                   
                                                                               
 MR. BUSH stated he could not answer Chairman Davis's question                 
 because he does not have enough of the history.  He acknowledged              
 that up until last summer, there was a maximum tariff in the law              
 and that ended up precluding the need for this.  It essentially set           
 prices in most cases.                                                         
                                                                               
 CHAIRMAN DAVIS indicated the tariff provision sunsetted.                      
                                                                               
 REPRESENTATIVE TOM BRICE referred to the tariff provision                     
 sunsetting and asked why this was brought around to replace it.  He           
 asked if the department knew of other states that are addressing              
 dispute resolution between the pilots and industry through binding            
 arbitration.                                                                  
                                                                               
 Number 346                                                                    
                                                                               
 MR. BUSH replied no, the department was not aware of any that use             
 this method and stated he confirmed this with the marine pilot                
 coordinator.                                                                  
                                                                               
 CHAIRMAN DAVIS acknowledged there was a meeting with all persons              
 involved and binding arbitration was mentioned in that meeting as             
 being acceptable; then at a later date it was determined to be                
 unacceptable.  He indicated that the legislation came mostly from             
 that particular meeting, and if there are changes and arguments               
 against it, then that's where it came from.                                   
                                                                               
 CHAIRMAN DAVIS stated for the record Representative Jerry Sanders             
 arrived at 1:52 p.m.  Chairman Davis then introduced Dan Twohig.              
                                                                               
 Number 361                                                                    
                                                                               
 DAN TWOHIG, Marine Pilot Coordinator, Division of Occupational                
 Licensing, Department of Commerce and Economic Development, stated            
 his position was created under statute, in the Pilot Act, to be               
 hired by the Department of Commerce and Economic Development, to              
 assist the Board of Marine Pilots with administering and enforcing            
 the law.  He explained aside from issuing licenses to pilots, he is           
 also the Executive Secretary of the Marine Pilot Board as well as             
 the state's investigator on Maritime incidents.  He said based on             
 that, he works for Mr. Bush and is in attendance to answer any                
 technical questions the committee might have regarding the Pilot              
 Act.                                                                          
                                                                               
 REPRESENTATIVE BRICE inquired about an amendment for the expansion            
 of Alaska Piloting licensing past the international border into               
 Canada and said he would assume that's what we are talking about.             
 He asked Mr. Twohig if he had the opportunity to comment on this.             
                                                                               
 MR. TWOHIG stated that Representative Brice's comment was not                 
 correct.  He explained the amendment creates an exemption                     
 specifically for Canadian flag vessels operating in the North Slope           
 out of the Mackenzie River.  He stated the current situation                  
 requires Canadian tugs and barges that provide fuel oil to                    
 communities on the North Slope to use pilotage services.  The                 
 Canadian pilots are asking for an exemption from the pilotage                 
 requirements.                                                                 
                                                                               
 REPRESENTATIVE BRICE asked if the Department of Commerce and                  
 Economic Development has formulated any position regarding this               
 issue.                                                                        
                                                                               
 MR. TWOHIG stated he was not the appropriate person to address that           
 question.  He remarked this was an ongoing lawsuit and he is the              
 investigator, so he would be unable to answer that question.                  
                                                                               
 Number 395                                                                    
                                                                               
 REPRESENTATIVE JAMES referred to the comment made by Mr. Bush                 
 regarding the marine pilot coordinator being the one to establish             
 who would be the binding arbitrator.  She acknowledged that she had           
 serious problems with binding arbitration regarding this issue and            
 it was difficult for her to understand the need for binding                   
 arbitration.  She indicated the whole issue was complicated and               
 difficult to understand "why we are, where we are with the marine             
 pilots," and when there is competition, it seems very difficult               
 that there would have to be binding arbitration.  Representative              
 James indicated it appears competition would exclude that.  She               
 referred to Mr. Bush's comment that he did not think the department           
 ought to be involved at all in the binding arbitration and,                   
 therefore, it should not be the marine pilot coordinator that would           
 designate who the binding arbitrator was.  She asked Mr. Twohig               
 what his thoughts were on that issue, and if not the marine pilot             
 coordinator, then who would be the arbitrator.                                
                                                                               
 MR. TWOHIG stated he did not have a firm grasp on the issue of                
 binding arbitration.  He stated he had read the arbitration                   
 statutes and agreed with Mr. Bush and the department's position               
 that the marine pilot coordinator should not be the person to                 
 arbitrate.  Mr. Twohig indicated his position allows him to speak             
 with everyone involved and, in turn, everyone speaks with him.  He            
 indicated he would rather not be in the middle of financial                   
 arguments in any way, shape or form.  He added it was his                     
 understanding from his interpretation of the binding arbitration              
 statute, that there is a mechanism incorporated for electing an               
 arbitrator which is accomplished within the court system.                     
                                                                               
 Number 430                                                                    
                                                                               
 REPRESENTATIVE JAMES asked in the meantime do boats just sit there            
 the entire time this is happening?                                            
                                                                               
 MR. TWOHIG indicated he did not feel this would be the situation.             
 He explained the pilots and pilot organizations are recognized by             
 the Pilot Board to operate.  He stated one of the requirements to             
 be a recognized pilot organization is to promote a safe and                   
 efficient pilotage service.  He stated he did not believe that a              
 pilot would refuse to do a job over the question of how many                  
 dollars would be at stake.  He added he could not imagine this                
 happening because it would be too expensive to arbitrate things               
 like that, but reiterated that he did not really understand                   
 arbitration, the need for it, or its function in this case.  Mr.              
 Twohig stated he was in agreement with Mr. Bush that the marine               
 pilot coordinator should not get involved.                                    
                                                                               
 REPRESENTATIVE JAMES concurred with Mr. Twohig's point and added              
 she did not see the need for binding arbitration.                             
                                                                               
 REPRESENTATIVE JERRY SANDERS asked Mr. Twohig if he attended the              
 meeting where the assumption was made that everyone agreed to                 
 binding arbitration.                                                          
                                                                               
 MR. TWOHIG stated that he was not invited to this meeting.                    
                                                                               
 REPRESENTATIVE SANDERS asked if Mr. Twohig felt that everyone was             
 in agreement to binding arbitration at that time.                             
                                                                               
 MR. TWOHIG responded that he would rather let the people in the               
 room speak their own minds.                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked Mr. Twohig if binding arbitration was           
 discussed at this particular meeting prior to when he spoke on this           
 bill?                                                                         
                                                                               
 MR. TWOHIG asked for clarification on which meeting Representative            
 Williams was referring to.                                                    
                                                                               
 REPRESENTATIVE WILLIAMS stated he was referring to the Pilot Board            
 meeting.                                                                      
                                                                               
 MR. TWOHIG stated the subject of binding arbitration did come up in           
 public comment from a couple different sources.                               
                                                                               
 REPRESENTATIVE WILLIAMS asked what his feelings were on how                   
 everyone in the room felt about the issue of binding arbitration.             
                                                                               
 MR. TWOHIG stated to his recollection, it was discussed as Mr. Bush           
 had said, more outside the meeting than inside the meeting.  He was           
 not privileged to a lot of those meetings and indicated there was             
 a pilot alliance meeting that occurred which he did not attend.  He           
 acknowledged that he was not the appropriate person to address the            
 contents of those meetings.                                                   
                                                                               
 Number 449                                                                    
                                                                               
 REPRESENTATIVE BRICE referred to the term "cross regionalization,"            
 and asked Mr. Twohig if he could explain that issue and how it                
 relates to current statute and how the bill addresses that.                   
                                                                               
 MR. TWOHIG explained the Marine Pilot Act of 1991 stated that a               
 licensed pilot may not pilot in more than one pilotage region                 
 unless the board made the determination that it would be in the               
 best interest of the state.  He said the question that kept                   
 surfacing was that the board never was able to put anything                   
 together stating these are the circumstances that would be in the             
 best interest of the state.  There has been several cases of                  
 litigation involving cross regionalization of licenses where people           
 wanted to work in one port, only in a different region.  He felt              
 with the opportunity that this bill opened up, the various                    
 factions, mostly the pilots who are concerned about it, have been             
 trying to fix that problem by defining what's the best interest of            
 the state and for the board.  He noted what they are doing is                 
 defining instances where there is a shortage.  He said the way the            
 legislation is currently written might answer the problems involved           
 with the exception of the statement "in concurrence by the                    
 associations."                                                                
                                                                               
 Number 471                                                                    
                                                                               
 CHAIRMAN DAVIS recognized that there were quite a few pilots from             
 out of town.  He wanted to ensure plenty of time for them to                  
 testify.  Chairman Davis requested the remainder of the meeting be            
 dedicated to hearing testimony from the pilots.  He then introduced           
 Mr. Ron Lorensen.                                                             
                                                                               
 RON LORENSEN, Attorney, Law Firm of Simpson, Tillinghast, Sorensen            
 and Lorensen, indicated he represents a Canadian shipping company             
 known as Northern Transportation Company, Ltd. (NTCL).  Mr.                   
 Lorensen explained that for the past couple of years NTCL has been            
 delivering fuel by tug and barge to a number of communities on the            
 North Slope.  The deliveries come out of the Mackenzie River as               
 soon as the ice breaks up, ultimately traveling to the Arctic Ocean           
 and along the coast making deliveries to both Alaska and Canada.              
                                                                               
 MR. LORENSEN explained the way the Pilotage Act is currently set              
 up, there is an exemption created for United States tugs under 300            
 tons.  He explained a tug that is under 300 tons is not required to           
 use a pilot in North Slope operations or elsewhere.  He indicated             
 this exemption was currently specific to U.S. tugs only and does              
 not apply to Canadian tugs.  He mentioned that Representative                 
 MacLean may be presenting a proposed amendment to "level the                  
 playing field" in this regard for Canadian tugs of the same weight            
 class to also be exempt from the requirement of using marine                  
 pilots.  Mr. Lorensen added there is litigation underway that he              
 filed on behalf of NTCL last year, based on the U.S. Commerce                 
 Clause and a notion called "discrimination against foreign                    
 commerce."  He stated that he would be able to establish that                 
 requiring pilots to be used for foreign vessels in exactly the same           
 conditions and exactly the same operations that a U.S. vessel is              
 not required, acts as a discrimination against foreign commerce.              
 He remarked NTCL used a pilot in its operations at Point Hope last            
 summer and indicated the cost of that operation totaled $6,000.  He           
 indicated this was not an insignificant financial requirement being           
 imposed.  He emphasized this proposal would level that playing                
 field by making both Canadian and U.S. tugs of the same class,                
 conducting the same types of operations, exempt from the pilotage             
 requirement.  Mr. Lorensen noted he had prepared some briefing                
 material for the committee.                                                   
                                                                               
 Number 516                                                                    
                                                                               
 REPRESENTATIVE BRICE referred to the licensing standards between              
 Canada and the U.S., and asked whether these standards such as                
 obtaining a captain's license, were fairly equitable.                         
                                                                               
 MR. LORENSEN stated he was not in a position to answer that                   
 question.  He explained the captains of the NTCL vessels have                 
 substantially more experience navigating in the arctic waters and             
 are more familiar with the conditions of the North Slope than the             
 typical tug captain coming in from Seattle on a Crowley tow, for              
 instance.  He stated given the arctic conditions, the requirements            
 are fairly stringent, but stated he could not confirm this.                   
                                                                               
 Number 532                                                                    
                                                                               
 MICHAEL O'HARA, Pilot, Southwestern Alaska Pilots Association; and            
 Board Member, Alaska Marine Pilots Association, indicated he was in           
 attendance to speak on behalf of himself, not the board.  He                  
 acknowledged his support for the continuation of the Marine Pilot             
 Board as (indisc.) it sunsetted.  He said in his opinion, it has              
 upgraded the licensing standards of pilots in the state over the              
 last four years.  He disagreed with Mr. Bush on the word "chronic"            
 and felt it was a situation that should be open for the                       
 commissioner to scrutinize as far as whether that situation exists            
 or not.                                                                       
                                                                               
 MR. O'HARA referred to page 3, Section 8, AS 08.62.093 (b) (2)                
 which states, "two years of service as a master on vessels of not             
 less than 1,000 gross tons," and said in his opinion this is a                
 severe degradation of the entry level standards.  He indicated he             
 has spoken with the marine pilot coordinator regarding this issue             
 and has recommended the insertion of the word "inspected" so the              
 statement read, "on inspected vessels."  He noted the inspected               
 vessels have a higher threshold of safety and remarked this was a             
 concern of the state.                                                         
                                                                               
 MR. O'HARA referred to page 4, Section 8, paragraph (6) which                 
 states, "five years of experience gained in a board approved deputy           
 marine pilot apprenticeship program."  He said he had written a               
 letter to Representative Davis regarding the value of command                 
 experience.  He explained a 1,600 gross ton license is essentially            
 a one-year-at-sea, on-an-ocean-license.  If a graduate from                   
 maritime school sails for one year as third mate and then obtains             
 a second mates license, he can get a 1,600 ton master license.  He            
 stated it was an equal license and this is commonly done.  So,                
 essentially the candidate would have one year sea experience with             
 no command experience and would then enter the apprenticeship                 
 program.  He said he understood the department's desire to have an            
 apprenticeship program, but suggested to the committee that this              
 apprenticeship program be included as a possibility as another                
 method rather than having it as a way of becoming a deputy marine             
 pilot.  He explained this would enable the pilot association to               
 have an apprenticeship program and train an applicant to the                  
 current standards, so that person could meet the requirements of              
 Section 8, AS 08.62.093.                                                      
                                                                               
 MR. TWOHIG asked if he could interject and explain that what Mr.              
 O'Hara was referring to was an amendment to AS 08.62.175 (d) (3)              
 (C) which says, "promote training programs for deputy marine pilots           
 which may include an apprenticeship program"  which does not make             
 it mandatory for all associations to have one.                                
                                                                               
 CHAIRMAN DAVIS said he would make note of that.                               
                                                                               
 Number 552                                                                    
                                                                               
 MR. O'HARA concurred with Mr. Bush regarding Section 14, AS                   
 08.62.157 (c) which states, "a person licensed under this chapter,            
 who is not a member of a pilot organization..."  He felt this was             
 not a good idea and stated the entire statute was designed for                
 pilot associations for services in a (indisc.) type region.  He               
 referred to Representative Brice's question about the concept of              
 cross regionalization and asked if Representative Brice had a                 
 feeling for the concept of regions and why they exist.                        
                                                                               
 Number 591                                                                    
                                                                               
 REPRESENTATIVE BRICE stated not being a pilot himself, it would be            
 difficult for him to say, but he indicated he was aware of the                
 distinction between Southeast waters and Northwestern waters, and             
 Bristol Bay waters are a lot different than Shelikoff Straits.                
                                                                               
 MR. O'HARA commented that it was a safety issue and it is local               
 knowledge.                                                                    
                                                                               
 CHAIRMAN DAVIS referred to Section 8 regarding the determination of           
 requirements to become a deputy marine pilot, and said it gets                
 fairly complicated and there is a flow chart included in committee            
 members packets that explains how some of these experience modes              
 fit together.                                                                 
                                                                               
 MR. O'HARA stated with regards to the conflict resolution, the                
 board has been hamstrung by the whole issue of tariffs for the last           
 five years that he has been on the board.  He commented that                  
 whatever it is, there has to be some way to resolve conflicts.  He            
 added he liked the idea of arbitration, but that's not necessarily            
 the way to do it, but emphasized the need for some sort of method             
 to settle these issues.  He added the state is now out of the                 
 tariff regulation business.  He reiterated his concerns and                   
 problems with the issue of conflict resolution.                               
                                                                               
 REPRESENTATIVE SANDERS asked Mr. O'Hara if he was at the meeting              
 where everyone assumed that everyone agreed on the issue of binding           
 arbitration.                                                                  
                                                                               
 MR. O'HARA stated he attended one meeting between industry and                
 pilots and asked Representative Sanders if that was the meeting he            
 was referring to.  He added he did not attend any meetings where              
 legislators were present regarding this issue.                                
                                                                               
 REPRESENTATIVE SANDERS said he was referring to the meeting where             
 the issue of binding arbitration was originally discussed.                    
                                                                               
 MR. O'HARA stated he did attend that meeting.                                 
                                                                               
 REPRESENTATIVE SANDERS asked if Mr. O'Hara was under the impression           
 there was total agreement on the binding arbitration issue.                   
                                                                               
 MR. O'HARA directed attention to Captain Eliassen who could explain           
 in detail, about the subject.  Mr. O'Hara said it was made clear              
 that certain associations could easily support the issue of binding           
 arbitration and others would not.                                             
                                                                               
 CHAIRMAN DAVIS clarified that the meeting he was talking about                
 which helped result in this resolution, there were legislators                
 present and a representative of what they referred to as an                   
 alliance, a group that had been put together to try and incorporate           
 all the inclusions in legislation that would work together and                
 everyone could agree on.  It was that meeting he had referred to.             
 He added there had been a lot of meetings among the pilots and                
 industry prior to that.                                                       
                                                                               
 REPRESENTATIVE SANDERS asked Chairman Davis if there were pilots at           
 the meeting he attended and was there agreement on the binding                
 arbitration issue.                                                            
                                                                               
 CHAIRMAN DAVIS stated it was his understanding when he left the               
 meeting that there was agreement.                                             
                                                                               
 Number 635                                                                    
                                                                               
 STUART MORK, Representative, Alaska Marine Pilots Association,                
 stated that Alaska Marine Pilots has never supported the issue of             
 binding arbitration.  He explained out west there is competition              
 and it has always been our feeling that in a situation where                  
 competition exists, if an agent or someone comes to us and says               
 they have job for a marine pilot for a certain price, if we are not           
 able to accept the job they would simply go to their competitors,             
 and if they refuse then the agent would return and eventually the             
 issue would be resolved.  He explained by going to binding                    
 arbitration, this is not compatible with a competitive situation in           
 regard to our experiences in the Western region.  Mr. Mork                    
 indicated the National Research Council (NRC) did a study called              
 "Minding The Helm."  He stated one of their conclusions was that              
 the states that have tried competitive pilotage schemes are all               
 backing away from it.  He referred to a situation in Florida, where           
 they wrote in their policy and intent, that competition was not               
 compatible with safety and efficiency.  He referred to the proposed           
 legislation, Sections 14 and 17.  Section 14 states that pilots               
 must accept any dispatch given by any agent.  Section 17 states if            
 a price cannot be negotiated, then they will go to binding                    
 arbitration.  He stated they have done some preliminary research              
 and were unable to find an incidence where the state has said two             
 private parties must go to binding arbitration.                               
                                                                               
 TAPE 95-10, SIDE B                                                            
 Number 000                                                                    
                                                                               
 MR. MORK continued...that pilots must take every job and then                 
 settle the price through arbitration.  That's essentially setting             
 a fixed tariff.  So the state is saying, if this goes through, the            
 pilots will do the work, they'll do it for a fixed amount of money.           
 We don't see where the competitive nature lies in this.  The                  
 shippers are asking for guaranteed service from the pilots, at a              
 guaranteed price and the pilots do not profit from this; therefore,           
 they are just standing by.  He noted the pilots would not have the            
 same protection and benefits that the industry people are asking              
 for in this case.  He commented that before they could sign on to             
 this program, they would like to see it carried further and say,              
 "if you are going to take every job that comes your way, it will              
 have to be an equitable dispatch among all the pilots in the                  
 region."  Mr. Mork declined to comment anymore, but added from a              
 philosophical perspective, it has to be able to work both ways for            
 the pilots or else it can't work.  He then asked if there were any            
 questions.                                                                    
                                                                               
 Number 030                                                                    
                                                                               
 CHAIRMAN DAVIS asked for clarification from Mr. Mork that his                 
 intentions were to connect Sections 17 and 18, which indicates when           
 a representative of a vessel requests that a pilot is mandated to             
 do the work.  He remarked this is sort of a binding situation.                
                                                                               
 MR. MORK clarified that they only have one contract and seven                 
 shippers that they deal with in their region.  He said they                   
 currently have one contract with one shipper and this accounted for           
 21 percent of the work in the region.  Everything else is on a job-           
 by-job basis.  He stated he potentially foresees they could go to             
 binding arbitration on every job.  Mr. Mork gave an example of                
 receiving a request to go to Atka and they make the determination             
 that this would not be cost effective for them, but because of                
 legislation, they have to accept the job.  He added their lowest              
 priced ship move is $316, and if they have to go to binding                   
 arbitration over $300, they would stand to lose a great deal.  He             
 indicated he was not sure who would pay, but more than likely it              
 would be both parties involved.  He remarked the cost of the                  
 arbitration alone would be more than the value of that shipment.              
 He added he was not talking about contracts in their particular               
 case, but rather shipments.                                                   
                                                                               
 Number 061                                                                    
                                                                               
 CHAIRMAN DAVIS asked if there were any questions for Mr. Mork.  He            
 then introduced Mr. Hans Antonsen.                                            
                                                                               
 HANS ANTONSEN, Representative, Southeastern Alaska Pilots                     
 Association (SEAPA), referred to page 2, Section 3, line 12,                  
 paragraph (2) with regards to (indiscernible) drug testing.  He               
 stated they did not have a problem with random drug testing.  He              
 stated he was aware that the intent of the board was to eliminate             
 the wording "random alcohol testing."  He indicated a lot of time             
 was spent last year at pilot board meetings discussing the                    
 logistics of "random alcohol testing" and found this could not be             
 done.  He acknowledged this was an effort to eliminate the "random            
 alcohol testing" from this legislation and make it mandatory drug             
 and alcohol testing, but not necessarily "random alcohol testing."            
 He thought it might be unintended wording on the part of the                  
 department that they included "test based upon reasonable cause,"             
 on page 2, line 13, Section 3, AS 08.62.040 (b) (2), and then later           
 on line 14 which states, "the Board may delegate responsibility for           
 administration of all or a portion of a testing program to pilot              
 organizations,"  or essentially, that the pilot organizations are             
 to test for probable cause and be self-policing.  He stated he did            
 not see this as a realistic scenario to expect of any pilot                   
 association to self-police themselves accurately, to represent the            
 safety for the state.  He added if they do, then we are opening               
 ourselves up from a whole tangled liability issue from their own              
 pilots for enforcing those procedures.  He indicated this language            
 is possibly suitable for a company/employee relationship but with             
 an association of pilots, he felt it went far beyond the bounds of            
 authority of an association to police its own members.                        
                                                                               
 MR. ANTONSEN indicated they spent a great deal of time with their             
 attorneys to streamline their present random drug testing policy so           
 that it is strictly between the program manager, administrator,               
 which in their case is ALTEST (ph) laboratory in Anchorage and the            
 pilot, and between the pilot and the state and the board.  He                 
 remarked they were not involved in the policing aspect of it.  He             
 thought it was a safer way to go from a litigation standpoint.  Mr.           
 Antonsen then addressed page 4, line 3, paragraph (6), regarding              
 the apprenticeship program.  He stated SEAPA generally concurs with           
 the desires of the department to at least consider being able to              
 grant someone entry into the field, even if they have not held all            
 the license requirements for the full duration of getting their               
 experience.  He emphasized they did not want to endorse watering              
 down the entry level requirements either, and felt that                       
 commensurate with Mr. O'Hara's comments, they would be very                   
 desirous of entering into some process by which they could work out           
 a resolution to include an apprenticeship program without watering            
 down the entrance level requirement or experience requirements in             
 the remaining portions of Section 8.                                          
                                                                               
 MR. ANTONSEN referred to page 4, Section 10, line 15, and stated he           
 believed this reference to allow deputy marine pilots to train, or            
 supervise the training of other pilots, and not require a full                
 license to do training, applies specifically to Region 4.  If he              
 remembered correctly, the department's suggestion dealt with the              
 Kuskokwim region where there were no fully licensed pilots to do              
 the training.  He stated to the best of his knowledge, in the rest            
 of the regions this was not a problem.  There were many fully                 
 licensed pilots with many years of experience that could complete             
 the training.  He reiterated his point on there being no need to              
 water down the training further by having less qualified pilots to            
 do the training.  He then referred to page 6, Section 14, paragraph           
 (c).  Mr. Antonsen concurred with the desires to delete paragraph             
 (c).  He further remarked that this was seen as part and parcel of            
 their lack of understanding as to where binding arbitration would             
 be necessary.  If we're going to say pilots must serve and any                
 pilot or pilot organization, if requested by a company, must                  
 dispatch and then we're going to tell you what it's going to                  
 charge, we're at a loss as to how that goes along the same                    
 direction that the legislature says, lets compete.  He indicated              
 they were more than happy to entertain the issue of binding                   
 arbitration, and compulsory services, but part and parcel to that,            
 is going down the line towards a regulated profession.  He                    
 indicated SEAPA's standpoint from the very beginning is the same as           
 with 90 percent of other associations and organizations in the                
 United States.  He added this would be the way to go in the                   
 interest of the state.                                                        
                                                                               
 MR. ANTONSEN asked if he could address the question that many                 
 committee members had regarding a meeting that was held and what              
 the understanding was.  He said they had many meetings this last              
 week with several Representatives and Senators concerning that                
 meeting.  Mr. Antonsen stated he was not present at that meeting              
 but their President, Captain Gurry, was in attendance.  Mr.                   
 Antonsen said it was Captain Gurry's understanding from that                  
 meeting, which he believed was in Speaker Phillip's office with               
 legislators and representatives from The Alliance in attendance,              
 that while binding arbitration was discussed, it was language that            
 was given to the pilots at the last moment and Captain Gurry's                
 response was, "thank you very much for sharing, but we'll need time           
 to digest this.  It's quite complicated and legalistic and we'll              
 really need a chance to look at this."  Mr.  Antonsen noted he had            
 just spoken with Captain Gurry hours ago and clarified the fact               
 there was never any understanding that binding arbitration was                
 something that is a great deal.  Mr. Antonsen stated that Captain             
 Gurry did mention that within the context of the existing contract,           
 binding arbitration is simply one more way of contract resolution.            
 Mr. Antonsen said that SEAPA has, in its contracts and its                    
 negotiations, at present time that are ongoing, addressed this                
 issue for conflict resolution, addressed the issue of continuing to           
 provide pilotage while a disagreement is there and even beyond the            
 terms of the contract, when we cannot come to a decision to extend            
 the contract beyond the term of the contract, to continue to                  
 provide service at no large increases.  It's stability for us and             
 stability for the industry, so we can work these things out. He               
 added it was his understanding that if there is a safety problem              
 where for example, a ship comes in unannounced and due to an                  
 inability to resolve a price with the pilot, the ship may not get             
 serviced.  He stated he did not see this situation occurring.  He             
 explained the cruise ships and shipping industry has always known             
 ahead of time.  He stated the situation of unannounced ships might            
 be the cargo industry, but he stated they always deal and have                
 contracts with the agents that represent those shipping companies             
 for accomplishing a job, for a price.  Mr. Antonsen reiterated his            
 observation of not seeing where this presents a safety issue. He              
 added SEAPA has never turned down or not served an assignment.                
                                                                               
 Number 212                                                                    
                                                                               
 CHAIRMAN DAVIS stated he, too, spoke with Captain Gurry for                   
 verification of their viewpoints on not favoring binding                      
 arbitration.  He announced Mr. Joe Kyle.                                      
                                                                               
 JOE KYLE, Representative, Alaska Steamship Association,(ASA)                  
 explained that every carrier in the state of Alaska is required to            
 use the services of a state licensed pilot with the exception of              
 the Prince William Sound oil carriers.  He said in terms of total             
 ship moves in the state, their membership represents the vast                 
 majority of ship movements requiring the services of a state                  
 licensed pilot.  He said some of the testimony already presented              
 indicated that the trades in the state are very diverse and at                
 times have conflicting needs in terms of the piloting.  He                    
 explained in Southeast Alaska, the cruise ship industry tends to be           
 very predictable.  They know up to a year in advance how many                 
 pilots will be required, when they will be needed and where.  There           
 is a similar situation in Cook Inlet with the oil carriers.  He               
 said the problem arises out in the Western region where the traffic           
 of ships is dependent upon the Bering Sea fisheries.  He noted                
 because they are unable to predict the time and quantity of the               
 salmon and herring runs, as well as not knowing what impacts the              
 fishery management scheme will have on the Bering Sea federal                 
 fisheries, it was a lot less predictable to determine pilot needs             
 in the Bering Sea.  Nevertheless, there was one pilot act that                
 encompassed the entire state.  Mr. Kyle reiterated his comments               
 made earlier regarding conflicting interests with the industry and            
 various regions having peculiar needs.  It becomes difficult to               
 satisfy and hammer all the needs into a single act.  He added the             
 legislature tried this in 1991, and made the philosophical decision           
 that there would be a competitive piloting situation in Alaska,               
 rather than a regulated monopoly.  He explained some of the                   
 testimony today stated "you gave us competition and we are telling            
 you the problems and how to work it out."                                     
                                                                               
 MR. KYLE remarked at least some pilot groups are willing to try and           
 make the competitive situation work, whereas others are determined            
 to show that it can't work and should be a regulated monopoly.  Mr.           
 Kyle stated this was the more common way piloting is administered             
 throughout the U.S. - as a regulated monopoly rather than a                   
 competitive situation.  He felt CSHB 260(TRA) was a good compromise           
 in amending the 1991 Act.  He added it took them a while to accept            
 the idea of binding arbitration as a way to resolve conflict                  
 disputes.  He stated this was not normally something the industry             
 would be willing to support.                                                  
                                                                               
 MR. KYLE explained they compromised to this because they felt they            
 could be faced with the situation where, since the maximum tariff             
 has expired, there is no ceiling on what can be charged to us.  He            
 presented a scenario of showing up at the dock with a cargo hull              
 full of fish or the sea buoy with a load of passengers, and if                
 their contract has lapsed, they then ask what the tariff is.  They            
 are offered an exorbitant rate compared to what they were paid a              
 week before.  They would then go to the other pilot association in            
 the area and are offered the same exorbitant rate.  He explained              
 they are then offered the choice of moving the ship into state                
 waters without a pilot, at which time they have great liability               
 from underwriters and note holders.  He indicated they would lose             
 insurance for that particular movement and would be against anybody           
 who had a note on their ship.  He explained when ships are moved              
 into state waters, there is a requirement to have a pilot using               
 (indisc.) commercial instruments.  He summarized by saying they are           
 looking for any mechanism that would protect them so they could               
 have the services of the state pilot when a ship has to be moved              
 into state waters.  He felt this would be for the good of the state           
 because the pilots serve a dual function; one for commerce and                
 safety; and the other for the state to protect the environment,               
 property and people when the ships are in state waters.  He                   
 explained the maximum tariff put a ceiling on what people could               
 charge.  The rates beneath those ceilings were negotiable and if an           
 agreement was not reached, the pilots could charge them that                  
 maximum tariff.  He indicated despite their best efforts, the                 
 maximum tariff expired last session due to two pilot groups that              
 strongly opposed the maximum tariffs.  He added it is the same two            
 groups that currently oppose binding arbitration.  He indicated he            
 attended all the meetings that the industry and legislators were              
 included in approximately one month ago.                                      
                                                                               
 MR. KYLE stated if anyone had any questions regarding the outcome             
 of the meeting, he would be happy to present his perspective of               
 those meetings.  Mr. Kyle stated he agreed with Mr. Bush's comments           
 regarding the words "chronic" and "concurrence" and the shortage of           
 pilots.  He also mentioned the pilots association and the industry            
 should be consulted because they would know before the pilots in              
 most cases, what the ship loads might be as well as the traffic               
 loads, and help predict if in fact a shortage is eminent.  He                 
 reiterated his feelings on binding arbitration being a compromise             
 position for them, that they negotiated down to that mechanism in             
 the interest of helping to formulate a consensus bill through the             
 legislature so they would not have to have a big "Donney Brook" as            
 they did several years ago.  He added he would hold the rest of his           
 comments in the interest of time.  He also commended the committee            
 for coming up with the best compromise bill they will see this                
 year.                                                                         
                                                                               
 Number 310                                                                    
                                                                               
 REPRESENTATIVE WILLIAMS asked if Mr. Kyle had read the "Brad                  
 Pierce" report.                                                               
                                                                               
 MR. KYLE stated he had read it.                                               
                                                                               
 REPRESENTATIVE WILLIAMS asked if he had heard Mr. Bush's comments             
 on the report.  He then asked Mr. Kyle's comments on this report.             
                                                                               
 MR. KYLE explained the same person that wrote that report also                
 coauthored the "Cowper Study" back in the aftermath of the Exxon              
 Valdez oil spill.  He made reference to the New Amsterdam accident            
 that occurred in the summer of 1994, which was used in that                   
 particular report as the author's "launch pad" to demonstrate that            
 a regulated monopoly would be the best way to handle state                    
 piloting.                                                                     
                                                                               
 REPRESENTATIVE WILLIAMS asked how often would an unannounced ship             
 come in where the tariff was (indisc.)                                        
                                                                               
 MR. KYLE stated their fear of this situation occurring, goes back             
 to the summer of 1993, when out in the Western region they were               
 told by one pilot association that if you don't sign written                  
 contracts with us, we'll no longer service your ships.  He said the           
 industry members rebelled at having to sign a written contract with           
 one pilot association and refused.  The pilots then stated they               
 would no longer service the ships.  This situation lead to the                
 state having to declare an emergency and a temporary restraining              
 order (TRO) was initiated and the Steamship Association wound up in           
 superior court.  He reiterated this was where their fear stems from           
 on pilots not responding to a dispatch.                                       
                                                                               
 REPRESENTATIVE WILLIAMS asked for clarification on when this took             
 place.                                                                        
                                                                               
 MR. KYLE stated it was the summer of 1993, for a chronic period of            
 time.                                                                         
                                                                               
 REPRESENTATIVE WILLIAMS inquired about the comments made by Mr.               
 Antonsen stating they had provisions in their agreement protecting            
 them from the above situation ever arising.                                   
                                                                               
 MR. KYLE stated that most of the contracts, within the existing               
 contracts, include binding arbitration provisions.  He stated their           
 concerns were what happens when a contract lapses.                            
                                                                               
 REPRESENTATIVE WILLIAMS asked for confirmation on what Mr.                    
 Antonsen's comments were regarding the fact there was no binding              
 arbitration, but there was an agreement that organizations would              
 service the ships at whatever the cost, and they would deal with it           
 later.                                                                        
                                                                               
 MR. KYLE commented that would be great if they would go without               
 knowing what they ever get paid for.                                          
                                                                               
 Number 364                                                                    
                                                                               
 ERIC ELIASSEN, President, Southwest Alaska Pilots Association                 
 (SWAPA), commented on the meeting which was held in Representative            
 Phillips' office.  He stated he did the majority of the speaking              
 for the pilot alliance and stated he is also the chairman of the              
 pilot alliance.  He indicated to the best of his recollection, Mr.            
 Antonsen stated Captain Gurry's position correctly.  He indicated             
 to Chairman Davis and Speaker Phillips, that there were two of                
 their associations present at that meeting.  SEAPA at the time was            
 not on board because they wanted to read through the binding                  
 arbitration material and have it reviewed by a lawyer, and Alaska             
 Marine Pilots did not have a delegate present.                                
                                                                               
 MR. ELIASSEN explained he was the chairman of the alliance and they           
 were not on board with the arbitration issue.  Mr. Eliassen stated            
 to the best of his knowledge, if they pursued contract negotiations           
 fruitfully, there would be the possibility of them coming on board            
 later.  He added he was not representing any of the other                     
 associations since there were representatives present.  He                    
 indicated that he would represent Southwest Alaska Pilots                     
 Association which is a pilot association in region 2.  He added it            
 was the only state pilot association in region 2 and added there              
 were two federal pilot associations that operate in the Cook Inlet            
 area.                                                                         
                                                                               
 MR. ELIASSEN stated their position on arbitration is they                     
 understand the industry's viewpoint that there should be some sort            
 of capping mechanism.  He explained in their situation they are one           
 association, so there is in effect no competition and no maximum              
 tariff.  He stated theoretically, they could increase their rates             
 one billion percent.  He added this may be tempting in the short              
 term, but we would be out of business very quickly.  He added they            
 have no intentions of doing that.  They negotiate agreements with             
 industry now.  In order to get out of this impasse, he suggested              
 arbitration could be included in those regions that have only one             
 pilot association, because there is no competition.  He indicated             
 they would be amenable to that proposal in their region.  He agreed           
 with Mr. Bush's characterization of the process of working with the           
 industry and other associations in formulating a compromise bill.             
 However, although there was some disagreement, it appeared that for           
 the most part, it was acceptable.                                             
                                                                               
 MR. ELIASSEN referred to page 2 of CSHB 260(TRA) and concurred with           
 Representative James on the term "chronic."  He explained if a                
 pilot is unable to meet the ship and that ship has anchored                   
 somewhere but has to sail, which as happened in the past, if there            
 is a one time occurrence that triggers the pilot commissioner                 
 making a determination that there is a shortage, they felt this               
 would not be appropriate, because it could be imminent.  He said              
 you have to look at actual imminence.  He presented a scenario of             
 the industry giving them notice that in six months or a year there            
 will be twelve more ships to service.  If there is not the                    
 capability to service those ships, this would be considered an                
 imminent chronic shortage.  He explained this situation would not             
 happen if it was a one time occurrence.  The idea of cross                    
 regionalization is anathema to the idea of state pilotage.  He                
 indicated that no where else in the country do they have pilots               
 working from one region to another.  He stated the whole idea of              
 state pilotage is to obtain intimate knowledge with that particular           
 local operating environment.  He explained our regions are actually           
 too big in the state of Alaska.  However, the way we are set up and           
 the way the trade is set up, it is the only way we have been able             
 to work it out where due to the seasonal nature of the traffic and            
 with the cruise ships and the fishing season, it becomes imperative           
 to have the quality of pilots in that particular region, and be               
 able to provide service to that entire region.  He added this was             
 a big enough responsibility.  There is no need to go from region to           
 region.  He stated his desire would be, if the board or                       
 commissioner finds a shortage, then they would work with the                  
 consultation of that recognized pilot association and try to work             
 up some internal mechanism to treat the shortage.                             
                                                                               
 MR. ELIASSEN made reference to the top of page 3, and stated he was           
 in agreement with this statement, but expressed concern regarding             
 page 3, lines 6 through 8, stating, "the Board shall ensure that              
 sufficient pilots are available to provide pilotage services in the           
 effected pilotage region to all vessels required to employ a pilot            
 under this chapter."  He questioned whether this statement would be           
 specific enough where it would allow the board to work within that            
 region.  He did not agree with the idea of bringing the pilots from           
 region to region.  For example, in Miami which is 25 miles away               
 from Fort Lauderdale, if a ship travels from Miami to Fort                    
 Lauderdale, the pilot does not go down there and take it in and out           
 of there, being that it is only a few mile stretch.  He stated it             
 was a different group because they possess the intimate knowledge             
 of that area.  He questioned the exact purpose of this act and                
 explained the intent was to try and assure the safe and efficient             
 pilotage service in Alaska.  He explained this was where the idea             
 of regionalization becomes important.                                         
                                                                               
 MR. ELIASSEN referred to CSHB 260(TRA), page 3, Section 8,                    
 paragraph (2), and stated he concurred with Mr. O'Hara regarding              
 the degrading of the existing standards with this statement.  He              
 stated Mr. O'Hara had consulted with Mr. Twohig and suggested they            
 might come up with something more appropriate.  He suggested to               
 either keep the existing wording--but he does not agree on how it             
 is worded.  He stated it was not clear.  He then referred to page             
 4, Section (6), line 3, which states, "five years of experience               
 gained in a board approved deputy marine pilot apprenticeship                 
 program," and questioned the purpose of this statement and                    
 indicated that the training committee has a file full of qualified            
 applicants.  He stated it was not that there were not enough                  
 applicants that satisfy the minimum entry requirements.  He said if           
 we're looking for Alaskans, I think there's a different way to                
 resolve this.  The state has it in their purview to sponsor two               
 scholarships per year, or have the Senators sponsor people to the             
 U.S. Merchant Marine Academy.  And when they complete the academy,            
 the state could place them with the state ferry system and work               
 until they have upgraded their license and increased their ratings,           
 and at the same time they would be obtaining their federal pilotage           
 endorsements.  This would satisfy the existing regulations without            
 watering them down and would be able to apply them to the Pilot               
 Associations....                                                              
                                                                               
 CHAIRMAN DAVIS interjected and apologized for having to interrupt             
 Mr. Eliassen.  Chairman Davis asked if it would be an inconvenience           
 for Mr. Michael Spence and Benee Braden to hold their testimony on            
 CSHB 260(TRA) until the next meeting, due to the fact there was               
 another meeting scheduled in this room at this time.                          
                                                                               
 BENEE BRADEN stated she would wait to testify at the next hearing             
 on HB 260.                                                                    
                                                                               
 MICHAEL SPENCE asked if he would have the opportunity at the next             
 occasion to testify.                                                          
                                                                               
 CHAIRMAN DAVIS stated yes, of course.  He then asked Mr. Eliassen             
 to continue.                                                                  
                                                                               
 MR. ELIASSEN continued and referred to page 6, Section 14,                    
 paragraph (c), and stated they were opposed to this section.  He              
 then referred to paragraph (d) of the same section and indicated              
 the wording seemed vague.  He questioned whether or not the pilot             
 or association is individually susceptible, if he does not make his           
 ship.  He presented a scenario where the pilot is detained due to             
 a car accident en route or a weather related situation.  Mr.                  
 Eliassen reiterated the vagueness of that particular section.  He             
 questioned the occurrence of a situation where the pilot is                   
 unintentionally unable to service the vessel.  He then referred to            
 page 8, paragraph (5), Section 19, AS 08.62.180, line 15, which               
 states, "vessels of Canada, built in Canada and manned by Canadian            
 citizens including Canadian cruise ships..." and suggested the                
 deletion of the words "including Canadian cruise ships."  He felt             
 this had the potential for becoming a major loophole.                         
                                                                               
 CHAIRMAN DAVIS thanked Mr. Eliassen and stated he would keep the              
 committee members and others informed of when the next meeting                
 would be held on CSHB 260(TRA)                                                
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House                      
 Transportation Committee, Chairman Davis adjourned the meeting at             
 3:12 p.m.                                                                    
                                                                              
                                                                               

Document Name Date/Time Subjects