Legislature(2003 - 2004)

02/20/2003 09:05 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                              MINUTES                                                                                         
                     SENATE FINANCE COMMITTEE                                                                                 
                         February 20, 2003                                                                                    
                              9:05 AM                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                       
                                                                                                                                
SFC-03 # 5, Side A                                                                                                              
SFC 03 # 5, Side B                                                                                                              
                                                                                                                              
CALL TO ORDER                                                                                                               
                                                                                                                                
Co-Chair Gary Wilken convened  the meeting at approximately 9:05 AM.                                                            
                                                                                                                                
PRESENT                                                                                                                     
                                                                                                                                
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Lyda Green, Co-Chair                                                                                                    
Senator Con Bunde, Vice-Chair                                                                                                   
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
Also Attending: ZACH WARWICK,  Staff to Senator Gene Therriault; PAT                                                          
DAVIDSON,   Legislative  Auditor,   Legislative  Finance   Division,                                                            
Legislative Affairs Agency;  CAPTAIN ROBERT WINTER, Southeast Alaska                                                            
Pilots'  Association;   JEFF  BUSH,   former  Deputy  Commissioner,                                                             
Department  of Community  and Economic Development,  and Member  and                                                            
current  Chair   of  the  Board  of   Marine  Pilots;  KATE   TESAR,                                                            
Representative,  Alaska  Yacht  Services   and Provisioning;   PETER                                                            
CHRISTENSEN,  Marine   Pilot  Licensing  Coordinator,   Division  of                                                            
Occupational  Licensing,   Department  of  Community   and  Economic                                                            
Development;  PAUL  FUHS, Representative,  Southwest  Alaska  Pilots                                                            
Association                                                                                                                     
                                                                                                                                
Attending via  Teleconference: From Offnet Sites:  DAVID SOKOL; DOUG                                                          
GREASON, Delta Marine                                                                                                           
                                                                                                                                
SUMMARY INFORMATION                                                                                                         
                                                                                                                                
SB 20-EXTEND BOARD OF MARINE PILOTS                                                                                             
                                                                                                                                
The  Committee  heard   testimony  from  the  bill's   sponsor,  the                                                            
Department  of Community  and Economic Development  and took  public                                                            
testimony. The bill was held in Committee.                                                                                      
                                                                                                                                
                                                                                                                                
     SENATE BILL NO. 20                                                                                                         
     "An Act extending the termination date of the Board of Marine                                                              
     Pilots; and providing for an effective date."                                                                              
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
ZACH  WARWICK,  Staff  to  Senator  Gene  Therriault,  informed  the                                                            
Committee that  this legislation would  extend the termination  date                                                            
of the  Board of  Marine Pilots  to June  30, 2007.  He noted  that,                                                            
while the Division of Legislative  Audit report [copy on file] dated                                                            
November 1, 2002,  supports this extension, the report  recommends a                                                            
review be conducted  regarding the current regulation  that requires                                                            
foreign-flagged  ships  exceeding  300  gross  tons to  hire  marine                                                            
pilots. In  addition, he continued,  the report recommends  that the                                                            
marine  pilot  exemption   for  Canadian  naval  ships   be  further                                                            
clarified.  He noted that  the Senate Labor  and Commerce  Committee                                                            
(SL&C) considered  the recommendations,  and reported the  bill from                                                            
committee   as   presented   with   the   determination   that   the                                                            
recommendations should be addressed in separate legislation.                                                                    
                                                                                                                                
Senator Hoffman asked whether  the SL&C committee addressed all four                                                            
of the Audit recommendations.                                                                                                   
                                                                                                                                
Mr. Warwick responded in  the affirmative. He reported that the drug                                                            
testing  recommendation has  been discussed  with the marine  pilots                                                            
associations.                                                                                                                   
                                                                                                                                
Co-Chair Wilken  specified that the Division of Legislative  Audit's                                                            
determinations  on the  drug testing  issue,  the Canadian  warships                                                            
issue, and  the 300 gross  weight tonnage  issue would be  addressed                                                            
separately.                                                                                                                     
                                                                                                                                
PAT DAVIDSON,  Legislative Auditor,  Division of Legislative  Audit,                                                            
testified to the four recommendations as follows.                                                                               
                                                                                                                                
     Recommendation No. 1                                                                                                       
     The Board  of Marine Pilots (BMP) should take  action to ensure                                                            
     regional  pilot associations  administer mandatory random  drug                                                            
     testing  programs  in  a  manner  consistent  with established                                                             
     regulatory standards.                                                                                                      
                                                                                                                                
Ms. Davidson  communicated that Recommendation  No. 1 addresses  the                                                            
need for adequate  drug testing follow-up on missed  drug testing as                                                            
well as further  clarification regarding the number  of pilots being                                                            
tested.  She  explained  that  under  authority   granted  in  State                                                            
statute,  the Board  of Marine  Pilots adopted  federal regulations                                                             
that require  50 percent  of licensed marine  pilots be tested.  She                                                            
continued  that the  federal  regulations  further  provide for  the                                                            
establishment    of   professional   associations    within   larger                                                            
consortiums  to increase  efficiency  in the process,  and that  the                                                            
consortiums have drug-testing  authority. However, she informed, the                                                            
audit determined that one  of the professional associations within a                                                            
consortium,  did not  meet the  50 percent  marine  pilot drug  test                                                            
sampling requirement.  She asserted that the 50 percent  mandate, as                                                            
adopted by the  Board, must be adhered to. She noted  that while the                                                            
Department  did not  agree with  the audit's  interpretation of  the                                                            
testing sampling  requirements, further discussion  established that                                                            
more exact guidelines must  be supplied to the consortiums to ensure                                                            
that the samplings meet the requirements.                                                                                       
                                                                                                                                
     Recommendation No. 2                                                                                                       
     The  BMP should establish  more informative  and comprehensive                                                             
     reporting  requirements so the  Marine Pilot Coordinator  (MPC)                                                            
     can confirm  that an appropriate number of licensed  pilots are                                                            
     consistently being subjected to random testing.                                                                            
                                                                                                                                
Ms. Davidson  stated that  Recommendation No.  2 specifies  that the                                                            
total  number  of   marine  pilots  subject  to  the   drug  testing                                                            
requirement,  the number  tested,  and the  results  of those  tests                                                            
should be  reported to  the Department's  Marine Pilot Coordinator.                                                             
She specified that it is  the responsibility of the Board to address                                                            
those individuals failing the test.                                                                                             
                                                                                                                                
     Recommendation No. 3                                                                                                       
     The legislature  should consider  amending current statutes  in                                                            
     order  to extend mandatory  drug and  alcohol testing  to pilot                                                            
     organization trainees and apprentices.                                                                                     
                                                                                                                                
Ms. Davidson communicated  that the third recommendation  calls upon                                                            
the Legislature  to determine whether  the existing statutes  should                                                            
be modified,  specifically as the  current regulations address  drug                                                            
testing for licensed pilots but not for trainees or apprentices.                                                                
                                                                                                                                
     Recommendation No. 4                                                                                                       
     The Board  of Marine Pilots should seek statutory  authority to                                                            
     allow  the board the  discretion to  grant waivers of  pilotage                                                            
     requirements to large pleasure crafts.                                                                                     
                                                                                                                                
Ms. Davidson continued  that the fourth recommendation suggests that                                                            
the  Legislature  should consider  statutory  changes  to allow  the                                                            
Board to grant  marine pilot exemptions  for specified vessels.  She                                                            
voiced the concern "that  economic activity is either being diverted                                                            
from  the State"  or vessels  are  traveling  in the  State but  not                                                            
complying with  existing regulations. She asserted  that "there does                                                            
not appear  to be any enforcement  activity  and it is difficult  to                                                            
have laws on the books" when no one is enforcing them.                                                                          
                                                                                                                                
Senator  Bunde announced  that  no marine  pilot has  failed a  drug                                                            
test.                                                                                                                           
                                                                                                                                
Ms.  Davidson  affirmed that  the  audit  revealed no  problem  with                                                            
marine pilots failing drug tests.                                                                                               
                                                                                                                                
Senator Hoffman  asked whether the number of licensed  marine pilots                                                            
is  sufficient  to service  all  pleasure  crafts, were  the  marine                                                            
pilotage regulation enforced.                                                                                                   
                                                                                                                                
Ms. Davidson  responded  that this  issue was not  addressed  in the                                                            
audit. She noted that,  due to insufficient data, it is difficult to                                                            
determine  the potential  number of  vessels that  might require  an                                                            
onboard marine  pilot. She stated that Appendix B  on page 35 of the                                                            
audit report depicts  the extent of the audit's questioning  on this                                                            
issue.                                                                                                                          
                                                                                                                                
     Appendix B                                                                                                                 
     Department of Community and Economic Development                                                                           
     Board of Marine Pilots                                                                                                     
     Survey Results                                                                                                             
     Question 4: Do you think that the licensing requirements are                                                               
      sufficient to ensure a competent pool of marine pilots?                                                                   
     Response                     Marine Pilots                                                                                 
     Yes                                 89 %                                                                                   
     No                                  11 %                                                                                   
                                                                                                                                
Co-Chair  Wilken  directed  Ms. Davidson  to  attend  any  Committee                                                            
hearing involving a Division of Legislative Audit report.                                                                       
                                                                                                                                
Ms. Davidson concurred.                                                                                                         
                                                                                                                                
Co-chair Wilken  commented that, were  modifications to the  current                                                            
regulations considered,  the on-going issue regarding whether or not                                                            
Canadian  warships  should  have a  licensed  marine  pilot  onboard                                                            
should be addressed.                                                                                                            
                                                                                                                                
Co-Chair  Wilken asked Captain  Winter to  explain the relationship                                                             
between  United States  and Canadian  warships as  well as US  Coast                                                            
Guard and Canadian Naval warships.                                                                                              
                                                                                                                                
CAPTAIN  ROBERT WINTER,  Representative,  Southeast  Alaska  Pilots'                                                            
Association, declared that  the US Navy supports an exemption of all                                                            
"friendly  naval  warships"  from  the  marine  pilot  requirement;                                                             
however,  he announced,  the Southeast  Alaska  Pilots' Association                                                             
(SEAPA) does  not support  a blanket exemption  because of  language                                                            
barriers and  other safety concerns.  He expressed that SEAPA  would                                                            
support  an  exemption  for Canadian  naval  vessels  homeported  in                                                            
British Columbia which are familiar with Alaskan waters.                                                                        
                                                                                                                                
Co-chair Wilken  clarified that extending waivers  to Canadian naval                                                            
vessels based in British Columbia would be acceptable to SEAPA.                                                                 
                                                                                                                                
Captain  Winter  concurred  and voiced  that  regulations  currently                                                            
provide this  exemption. He  furthered that  "there is a  reciprocal                                                            
agreement"  between the United  States and  Canada that allows,  for                                                            
instance,  a US Coast  Guard vessel  from Alaska  to transverse  the                                                            
inside waters  of British  Columbia provided  there is a minimum  of                                                            
two navigational  officers onboard who have "a two-trip"  experience                                                            
in  those waters.  However,  he  declared,  Canadian  naval  vessels                                                            
routinely request a marine pilot be on board.                                                                                   
                                                                                                                                
Senator  Bunde  asked  how a  Canadian  officer  would  acquire  the                                                            
necessary training to operate in Alaska waters.                                                                                 
                                                                                                                                
Captain Winter  replied that Canadian officers could  accomplish the                                                            
required training  by serving on ships transversing  Alaskan waters.                                                            
However,  he clarified,  SEAPA would  support a  waiver for  British                                                            
Columbia based naval vessels without this documentation.                                                                        
                                                                                                                                
JEFF BUSH, former  Deputy Commissioner, Department  of Community and                                                            
Economic Development,  and Member and recent Chair,  Board of Marine                                                            
Pilots testified  in support of the BMP extension.  He applauded the                                                            
findings  of the  audit and  urged the  Legislature  to address  the                                                            
issues  raised  in  the  report,  specifically   the  exemption  for                                                            
Canadian  naval vessels and  the waiver for  yachts. He voiced  that                                                            
the Board and the consortiums  have discussed the drug testing of 50                                                            
percent  of  marine pilots  regulation,  and  he  noted that  he  is                                                            
"comfortable" with the progress being made.                                                                                     
                                                                                                                                
Mr.  Bush advised  that  the  requirement  specifying  that  vessels                                                            
exceeding 300  tons must have a marine pilot onboard  was enacted in                                                            
1995  in response  to  safety  concerns regarding  a  "quite  large"                                                            
Greenpeace  vessel,  the Rainbow  Warrior,  which was  operating  in                                                            
Alaskan waters  without a  marine pilot. He  opined that, "that  one                                                            
bad situation" spawned  legislation "that created more problems than                                                            
we needed." He commented  that it costs up to $3,000 a day to have a                                                            
marine pilot on board,  and he asserted, this expense in conjunction                                                            
with the discomfort  of having "a  stranger live onboard"  a private                                                            
vessel deters  large yachts from visiting  the State and  negatively                                                            
affects  the  State's   economy.  He  voiced  that,   "it  would  be                                                            
appropriate  to address  this  situation and  find a  way" to  allow                                                            
these vessels to come to Alaska.                                                                                                
                                                                                                                                
Mr. Bush  expressed  support  for a marine  pilot  waiver fee  being                                                            
implemented. He  communicated that, due to the expense  of operating                                                            
the  small Division  of  Occupational  Licensing  program,  two-year                                                            
marine pilot  licenses cost approximately  $2,500, and he  suggested                                                            
that $500 would  be "a reasonable"  waiver fee. He stated  that this                                                            
fee would "alleviate"  the expense  of the marine pilot license  fee                                                            
and set  a precedent for  other states. He  specified that  this fee                                                            
level would be acceptable to marine pilots.                                                                                     
                                                                                                                                
KATE TESAR, Representative,  Alaska Yacht Services and Provisioning,                                                            
reviewed her  professional experience  with marine pilot  operations                                                            
and the yachting  and cruise ship industries. She  informed that she                                                            
was involved  in the  "major rewrites"  of the  Marine Pilot  Act of                                                            
1991 and 1995,  and she spoke in favor of extending  the termination                                                            
date of  the Board.  She informed  the Committee  that Alaska  Yacht                                                            
Services  and Provisioning  has  determined  that the  marine  pilot                                                            
requirement  as it applies to foreign-flagged  yachts exceeding  300                                                            
gross  tonnage,  is  "an impediment"  to  business.  She  urged  the                                                            
Committee  to  modify  this  regulation,   and  she  echoed  earlier                                                            
testimony  that   this  law,  while  mandated  on   the  books,  "is                                                            
unenforceable"  and is an economic  obstruction because vessels  are                                                            
choosing not to visit Alaska.                                                                                                   
                                                                                                                                
Ms. Tesar  informed  the Committee  that the 1991  revisions  to the                                                            
Marine  Pilot Act  were  the "direct  result"  of the  Exxon  Valdez                                                            
tanker  oil spill  "catastrophe,"  and  that  prior to  the  further                                                            
changes  in the  Act in  1995,  all pleasure  craft  of domestic  or                                                            
foreign  registration  were  allowed  to travel  in  Alaska  without                                                            
marine  pilots  onboard.  She  stressed  that  this  issue  must  be                                                            
reevaluated  due to the changes in  the industry and the  unforeseen                                                            
growth  in  the number  of  large  yachts being  built.  She  voiced                                                            
concern about  the negative economic  impact resulting from  the Act                                                            
and affirmed that the audit report recommendations are valid.                                                                   
                                                                                                                                
Ms. Tesar reviewed the  State of Washington vessel waiver system and                                                            
noted its inclusion  of a waiver application fee.  She voiced that a                                                            
similar fee should be instituted  in Alaska to offset the expense of                                                            
the marine  pilot license  fee. She furthered  that, as part  of the                                                            
waiver application  process in Washington,  the state evaluates  the                                                            
"authority  and  expertise"  of the  vessel's  captain.  She  voiced                                                            
support for this concept.                                                                                                       
                                                                                                                                
Ms. Tesar  spoke to  the difficulty  experienced  by pleasure  craft                                                            
crew in coordinating  yacht traffic in Alaska. She  explained that a                                                            
vessel must  contact the State's piloting  associations twenty-four                                                             
hours  in advance  of  arrival  while large  cruise  ships  schedule                                                            
approximately  a year in advance to  ensure that accommodations  are                                                            
in place. She  reviewed that each  of the 430 cruise ships  dockings                                                            
in Juneau  in 2002 required  a minimum of  one, and more often  two,                                                            
marine  pilots on  board.  She expressed  that  the  volume of  ship                                                            
traffic in  the summer months places  a tremendous demand  on marine                                                            
pilots.                                                                                                                         
                                                                                                                                
Ms. Tesar voiced  that safety concerns  including such things  as an                                                            
event occurring  that could negatively  affect the tourist  industry                                                            
could be addressed  by instituting  an intelligence tracking  system                                                            
for vessels traveling between  the US and Canada. She stated that US                                                            
Customs, US  Immigration and Nationalization  Service (INS),  the US                                                            
Coast  Guard  and  other  intelligence   agencies  are  involved  in                                                            
discussions  regarding  foreign flagged  vessels in  US waters.  She                                                            
noted,  however,  that many  vessels  that are  built  and owned  by                                                            
citizens of the  United States are registered in a  foreign country,                                                            
particularly Great Britain.                                                                                                     
                                                                                                                                
Ms.  Tesar stated  that US  Customs  requires that  foreign  flagged                                                            
vessels  apply  for a  US  cruising  permit.  She noted  that  local                                                            
intelligence  gathering networks are  comprised of such entities  as                                                            
the  local  port  authority,  port  service   industries  and  local                                                            
businesses  that watch for  suspicious activity  among vessels.  She                                                            
stated that were a waiver  system in place, it would provide further                                                            
intelligence regarding  what ships are transversing  Alaskan waters.                                                            
                                                                                                                                
Ms. Tesar referred  the Committee  to the Marine Exchange  of Alaska                                                            
information  [copy  on  file]  that  is  included  in  the  members'                                                            
packets.  She explained  that this information  provides  additional                                                            
tracking  system  options  such  as  the  "Automated  Secure  Vessel                                                            
Tracking  System" which  uses satellite  communication  to report  a                                                            
vessel's position.                                                                                                              
                                                                                                                                
Ms. Tesar asserted  that an increase  in yacht traffic in  the State                                                            
could infuse  "lots of new  money" into the  economy. She  testified                                                            
that yachts  spend approximately  "30 percent  over the cost  of the                                                            
trip itself  in communities"  on  such things  as restaurants,  port                                                            
fees and shopping. She  stressed that due to the uncertainty of safe                                                            
travel  in  other  foreign  destinations,   Alaska  is  a  "premiere                                                            
destination" and  action should be taken to encourage  this traffic.                                                            
She pointed  out the letters of support  from tourism businesses  in                                                            
support of the  tonnage exemption. She stated that  the State should                                                            
be addressing  the recommendations  in the  Audit report as  well as                                                            
determining "how to attract  these desirable independent" vessels to                                                            
Alaskan waters in a safe navigational manner.                                                                                   
                                                                                                                                
Senator Bunde  observed that while foreign flagged  vessels over 300                                                            
tons are  required to have  marine pilots  aboard, similar  sized US                                                            
flagged vessels are exempt from the requirement.                                                                                
                                                                                                                                
Ms. Tesar confirmed  that any size private vessel  registered in the                                                            
US is exempt from the marine pilot requirement.                                                                                 
                                                                                                                                
Senator  Bunde characterized  the  gross ton  measurement system  as                                                            
"archaic,"  and he  suggested  that,  were the  regulation  revised,                                                            
consideration  be given to include the language "length  of vessel."                                                            
He warned that utilizing  waiver fees to offset marine pilot license                                                            
fee  should be  further  explored,  as this  language  would  entail                                                            
dedicated funds.                                                                                                                
                                                                                                                                
Senator Hoffman  asked whether the number of licensed  marine pilots                                                            
is sufficient  to provide pilots for both cruise ships  and pleasure                                                            
crafts.                                                                                                                         
                                                                                                                                
Ms. Tesar voiced  that "anecdotally" she has heard  of problems with                                                            
the availability  of a sufficient  number of marine pilots,  and she                                                            
spoke of a situation whereby  a retired marine highway ferry captain                                                            
has had to refuse calls  to pilot small vessels primarily because he                                                            
is not a member  of a marine pilots association. She  continued that                                                            
there  are approximately  37  licensed  marine pilots  in  Southeast                                                            
Alaska with approximately  13 more licenses to be  issued within the                                                            
next few  years. She deferred  to yacht boat  owners and the  marine                                                            
pilot associations to better answer the question.                                                                               
                                                                                                                                
Senator Hoffman  asked the  fee level that  would be required  for a                                                            
marine pilot waiver.                                                                                                            
                                                                                                                                
Ms. Tesar responded  that the waiver  fee schedule for the  State of                                                            
Washington,  "WAC 363-116-360  Exempt  vessels" [copy  on file],  is                                                            
included in the member's  packets. She clarified that a fee schedule                                                            
for Alaska has not been established at this time.                                                                               
                                                                                                                                
DAVID SOKOL  testified  from an offnet  site in  Omaha Nebraska.  He                                                            
communicated  that the 38-foot,  350-ton private  vessel he  owns is                                                            
registered  in   England,  was  built  in  the  United   States,  is                                                            
exclusively  a pleasure  craft, and  is not for  hire. He  announced                                                            
that six  of the  seven-member  crew, including  both captains,  are                                                            
American,  and that one of  the vessel's  captains spent over  three                                                            
years piloting  in Alaskan waters, and he declared  that all members                                                            
of the  crew undergo  random drug  tests. He  affirmed that  tonnage                                                            
calculations could be interpreted a multitude of ways.                                                                          
                                                                                                                                
Co-chair Wilken  interjected that letters from Mr.  Sokol to various                                                            
members  of the  Alaska Legislature  are  included  in the  Members'                                                            
packets.                                                                                                                        
                                                                                                                                
Mr. Sokol informed the  Committee that even though he had previously                                                            
traveled in  the State, he was unaware  of the State's marine  pilot                                                            
tonnage  regulations.   He continued   that  upon  learning  of  the                                                            
requirement, he  contacted the State's marine pilot  coordinator who                                                            
referred  him  to the  marine  pilots associations  to  arrange  for                                                            
pilots for the  upcoming trip. He was informed that  the rates would                                                            
range  between  $1,400  and   $2,200  a  day  plus  room,  food  and                                                            
transportation  to and  from the  yacht. He  stated  that due to  an                                                            
insufficient  number of  marine pilots  being  available during  his                                                            
six-week  trip timeframe,  he  was asked  to consider  changing  the                                                            
dates of his trip.  He was informed that another option  would be to                                                            
alter his  port of  call plans in  order to require  a marine  pilot                                                            
only when the  vessel needed to be moved. He noted  that he would be                                                            
required to pay for the pilot's transportation costs.                                                                           
                                                                                                                                
                                                                                                                                
SFC 03 # 5, Side B 09:52 AM                                                                                                     
                                                                                                                                
                                                                                                                                
Mr. Sokol  stated that  although he  is familiar  with marine  pilot                                                            
regulations  in  other areas  of  the county,  Canada,  and  Central                                                            
America, he "has  never faced a situation" where a  marine pilot was                                                            
required  seven  days a  week  on the  vessel.  He stated  that,  in                                                            
addition  to the expense  factor,  supplying a marine  pilot  with a                                                            
stateroom would  present a hardship because he would  be required to                                                            
reduce  the  number  of guests  he  could  house.  Consequently,  he                                                            
stated,  due to the  cost, the  inconvenience,  and the moveability                                                             
restrictions  placed on  the vessel  he opted to  cruise to  British                                                            
Columbia (BC)  Canada, instead of Alaska. He noted  that the vessel,                                                            
the crew,  and the passengers  infused  approximately $300,000  into                                                            
the  BC economy  through  purchases  of fuel,  food,  fishing  guide                                                            
services, reservations,  and provisions. He mentioned  that Canadian                                                            
officials granted a marine  pilot exemption to his vessel within two                                                            
weeks of the application being submitted.                                                                                       
                                                                                                                                
Mr.  Sokol voiced  support  for marine  safety  measures,  including                                                            
insurance requirements;  however,  he asked that a waiver  system be                                                            
considered  to exempt qualified  vessels and  crews from the  marine                                                            
pilot requirement.  He informed  the Committee  that although  yacht                                                            
owners highly  recommend travel to Alaska, and it  is known that the                                                            
marine pilotage  regulation  is relatively  unenforced, he  asserted                                                            
that  many   yacht  owners,  including   himself,  would   not  risk                                                            
jeopardizing  their vessel or their  personal reputation,  and would                                                            
therefore, he opined, decide not to visit the State.                                                                            
                                                                                                                                
Senator  Bunde  inquired  whether  yacht insurance  rates  might  be                                                            
negatively  affected   by  yachts,  "either  through   ignorance  or                                                            
ignoring the law requiring  a marine pilot" incurring an accident in                                                            
the State.                                                                                                                      
                                                                                                                                
Mr.  Sokol  believed  that  insurance  rates   would  be  negatively                                                            
affected, as, he attested,  most insurance policies require a vessel                                                            
to be in compliance with the rules and regulations of an area.                                                                  
                                                                                                                                
Senator  Bunde  asked for  clarification  as  to  when a  vessel  is                                                            
required to have a marine pilot onboard.                                                                                        
                                                                                                                                
Mr. Sokol understood  that a marine  pilot must be onboard  a vessel                                                            
when "the  anchor was up  or we were away  from dock." He  commented                                                            
that  the   distance  between   communities   in  Southeast   Alaska                                                            
"effectively" requires a pilot to be onboard 24 hours a day.                                                                    
                                                                                                                                
Senator Bunde  asked that further  clarification be supplied  to the                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-chair Wilken  thanked Mr. Sokol  for testifying. He acknowledged                                                             
that the next testifier's  company, Delta Marine, has also submitted                                                            
written  testimony  to the  Legislature, which  is  included in  the                                                            
Members' packets.                                                                                                               
                                                                                                                                
DOUG  GREASON,   Delta  Marine,  testified   offnet  from   Seattle,                                                            
Washington  and voiced  agreement  with  Mr. Sokol's  comments.  Mr.                                                            
Greason  expressed  that  yachts "are  global  vessels  with  global                                                            
owners,"  and  as  such could  travel  anywhere  in  the  world.  He                                                            
furthered  that when  negative  issues arise  about  an area,  these                                                            
vessels just go somewhere  else. He asserted that his company relies                                                            
on  refitting  and  building  these global  vessels,  and  that  his                                                            
business is negatively  impacted when these vessels do not travel in                                                            
the Northwest, including Alaska.                                                                                                
                                                                                                                                
Mr.  Greason professed  that  the  use of  "the archaic"  300  gross                                                            
tonnage  measurement  system  is  inappropriate   for international                                                             
vessels.  He  clarified  that,  with the  exception  of  the  United                                                            
States,   other  countries   utilize  an   "international"   tonnage                                                            
measurement. He stated  that the US Coast Guard issues licenses with                                                            
both  US   tonnage  and   international   tonnage  designations   in                                                            
recognition of this fact.  He urged the Committee to incorporate the                                                            
international tonnage definition into any proposed legislation.                                                                 
                                                                                                                                
PETER CHRISTENSEN,  Marine Pilot Licensing Coordinator,  Division of                                                            
Occupational  Licensing,   Department  of  Community   and  Economic                                                            
Development,  explained   that  while  some  Canadian  warships  are                                                            
typically  granted marine  pilot exemptions,  he  asserted that  the                                                            
State  has "really  stretched"  the law.  He read  the exemption  as                                                            
written in statute.                                                                                                             
                                                                                                                                
Co-Chair Wilken  asked whether the Department could  produce a draft                                                            
revision to address this issue.                                                                                                 
                                                                                                                                
Mr. Christensen replied in the affirmative.                                                                                     
                                                                                                                                
Senator   Bunde  asked  the   Department   to  clarify  under   what                                                            
circumstances  a Marine  Pilot  would be  required to  be onboard  a                                                            
foreign owned vessel.                                                                                                           
                                                                                                                                
Mr. Christensen read the  regulation and communicated that the Board                                                            
has determined  that a vessel at anchor or tied to  a dock would not                                                            
require a pilot.                                                                                                                
                                                                                                                                
Senator Olson  asked whether Canada provides a similar  exemption to                                                            
US naval ships traveling in Canadian waters.                                                                                    
                                                                                                                                
Mr. Christensen  responded  that Canada reviews  whether one  of the                                                            
vessel's  officers has,  within the  previous three  or five  years,                                                            
transversed  BC waters and  issues a determination.  He stated  that                                                            
Alaska  requires two  of the  Canadian  crew to  have experience  in                                                            
Alaskan waters.                                                                                                                 
                                                                                                                                
Senator  Bunde  opined  that any  proposed  language  change  should                                                            
specifically  exempt  Canadian warships  rather  than exempting  all                                                            
"friendly" foreign vessels from the marine pilot requirement.                                                                   
                                                                                                                                
PAUL FUHS,  Representative,  Southwest Alaska  Pilots' Association,                                                             
spoke in support of the  extension of the Board of Marine Pilots. He                                                            
recounted   occasions  in   which  the  Board   was  responsive   to                                                            
Association  members'  concerns.  He  stated  that "in  addition  to                                                            
providing  safe  pilotage  of  vessels  in this  time  of  increased                                                            
concerns about  security, the marine  pilots" serve as a  first line                                                            
of defense  because  they  are usually  the first  American  citizen                                                            
onboard a foreign  vessel. He continued  that while the Association                                                             
does  not object  to exempting  Canadian  warships  from the  marine                                                            
pilot regulation;  he noted that US warships historically  request a                                                            
marine pilot  be onboard their vessels  when in Alaskan waters  even                                                            
though it is not required.                                                                                                      
                                                                                                                                
Mr. Fuhs stated  that the pilots associations  are working  with the                                                            
bill's sponsor  to address the pilotage  exemption waiver  and other                                                            
security concerns  in separate legislation. However,  he voiced, the                                                            
State should  retain the ability to  make decisions regarding  these                                                            
issues.                                                                                                                         
                                                                                                                                
Senator Bunde  questioned how unforeseen  issues might be  addressed                                                            
were a marine pilot waiver system in place.                                                                                     
                                                                                                                                
Mr.  Fuhs  expressed  that  requiring  the  Board to  be  an  active                                                            
participant  in the  waiver process  as well as  requiring a  marine                                                            
pilot to  board a vessel  on its initial voyage  to the State  would                                                            
ensure  that  safeguards  "would  be in  place,  both  for  national                                                            
security issues" and to  validate the competency of the crew and the                                                            
vessel.                                                                                                                         
                                                                                                                                
Captain  Winter testified  that, in  his professional  opinion,  the                                                            
Board  of Marine  Pilots  conducts  essential  responsibilities.  He                                                            
voiced support, on behalf  of the marine pilots association, for the                                                            
bill as presented.  He proclaimed that Alaska's Marine  Pilotage Act                                                            
"serves the shippers, the  cruise industry, and the public well." He                                                            
stated that the Act "is  the envy of many other states" and that the                                                            
State's marine  pilots "serve to protect the integrity"  of the Act.                                                            
                                                                                                                                
Captain  Winter  responded  to questions  that  arose  during  other                                                            
committee  hearings  on  this bill;  specifically  that  the  marine                                                            
pilots associations are  addressing the drug-testing recommendations                                                            
outlined  in the  audit report  and that  the audit  report did  not                                                            
identify  that drug  testing  is mandatory  for  anyone undertaking                                                             
marine pilot training or apprenticeship programs.                                                                               
                                                                                                                                
Co-Chair Wilken  asked Ms. Davidson  to provide a Division  response                                                            
regarding the mandatory drug testing for trainees.                                                                              
                                                                                                                                
Captain Winter  agreed with previous testimony that  determining the                                                            
length of a vessel is easier  than determining the tonnage weight of                                                            
a  vessel.  He voiced  support  for  establishing  100 feet  as  the                                                            
maximum length  of a foreign flagged  vessel that could apply  for a                                                            
marine pilot waiver  as, he continued, the association  is concerned                                                            
about navigational  safety issues  that could be presented  by ships                                                            
exceeding that  length. He stated  that the association prefers  the                                                            
word  "waiver" rather  than  "exemption" to  ensure  that the  Board                                                            
would be  involved in the  determination; and  he asserted  that the                                                            
association  would continue  to work  with the  Board on  addressing                                                            
these concerns.                                                                                                                 
                                                                                                                                
Senator Olson asked the  accident rate of foreign flagged vessels in                                                            
the State.                                                                                                                      
                                                                                                                                
Captain  Winter responded  that  most accidents  in  the State  have                                                            
involved vessels that are  familiar with Alaska's waters; therefore,                                                            
he  contended,   there  is  concern   regarding  vessels   that  are                                                            
unfamiliar  with the  State's  waters. He  mentioned  that small  US                                                            
vessels that carry  paying passengers are required  to have a marine                                                            
pilot  on board  for  the first  three  sailings  into  an area.  He                                                            
specified  that  international  tonnage  is the  preferred  unit  of                                                            
measurement.                                                                                                                    
                                                                                                                                
Senator  Olson  asked,  due  to the  occurrence  of  accidents,  the                                                            
safeguards  provided  by  requiring  marine  pilots  to  be  onboard                                                            
vessels.                                                                                                                        
                                                                                                                                
Captain  Winter  replied  that  he  is unaware  of  a  single  yacht                                                            
accident  occurring while  a marine pilot  was onboard. However,  he                                                            
stated, not all accidents might be reported.                                                                                    
                                                                                                                                
Senator  Olson countered  that an  accident must  be reported  if an                                                            
insurance claim is made.                                                                                                        
                                                                                                                                
Co-Chair  Wilken   asked  whether   the  simulator  at  the   Alaska                                                            
Vocational and  Technical Education Center (AVTEC)  is beneficial in                                                            
pilotage training.                                                                                                              
                                                                                                                                
Captain  Winter responded  that  it is  a "small"  Alaska  resource.                                                            
However, he noted,  new features could be added to  the simulator to                                                            
expand  its abilities  to the point  where it  could be effectively                                                             
used for training.                                                                                                              
                                                                                                                                
Co-Chair Wilken surmised  that the State might be required to invest                                                            
more funding into AVTEC.                                                                                                        
                                                                                                                                
Captain Winter replied that this would be beneficial.                                                                           
                                                                                                                                
Co-Chair Wilken  inquired how many marine pilots have  failed random                                                            
drug testing.                                                                                                                   
                                                                                                                                
Captain Winter replied, none.                                                                                                   
                                                                                                                                
Senator Bunde  voiced that the waiver  issue should be addressed  in                                                            
separate legislation.                                                                                                           
                                                                                                                                
Co-Chair Wilken  affirmed that the  issue would be addressed  either                                                            
in this bill or in another bill.                                                                                                
                                                                                                                                
Co-chair Wilken ordered the bill HELD in Committee.                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                 
                                                                                                                                
Co-Chair Gary Wilken adjourned the meeting at 10:19 AM                                                                          

Document Name Date/Time Subjects