Legislature(1995 - 1996)
03/22/1995 01:48 PM House TRA
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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.
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