Legislature(1995 - 1996)

04/27/1995 03:05 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    SENATE FINANCE COMMITTEE                                   
                         April 27, 1995                                        
                            3:05 p.m.                                          
  SFC-95, #48, Side 1 (291-end)                                                
  SFC-95, #48, Side 2 (575-end)                                                
  SFC-95, #50, Side 1 (000-end)                                                
  SFC-95, #50, Side 2 (575-end)                                                
  SFC-95, #52, Side 1 (000-end)                                                
  SFC-95, #52, Side 2 (575-220)                                                
  CALL TO ORDER                                                                
  Senator  Rick Halford, Co-chairman,  convened the meeting at                 
  approximately 3:05 p.m.                                                      
  In addition to Co-chairman Halford,  Senators Donley, Sharp,                 
  and Zharoff  were present.   Senator  Phillips arrived  soon                 
  after the  meeting began, and  Senator Rieger arrived  as it                 
  was in progress.  Co-chairman Frank attended portions of the                 
  ALSO ATTENDING:  Senate President Drue Pearce; Dale Collins,                 
  Southeast Alaska Pilots  Association, and  member, Board  of                 
  Marine  Pilots; Kate  Tesar, Alaska  Coastwise  Pilots; Paul                 
  Fuhs,  Southwest Alaska  Pilots Association;  Eric Eliasson,                 
  President,  Southwest  Pilots  and  Alaska Pilots  Alliance;                 
  Ginny  Faye, Prince  William  Sound, RCAC;  Bruce Weyhrauch,                 
  Southeast  Pilots Association;  Joe  Kyle, Alaska  Steamship                 
  Association; Captain  Michael O'Hara,  Pilot from  Southwest                 
  Alaska  and  member,  Board of  Marine  Pilots;  Dan Twohig,                 
  Coordinator, Board of  Marine Pilots, Dept. of  Commerce and                 
  Economic  Development;  Glenda   Straube,  Director,   Child                 
  Support Enforcement  Division,  Dept.  of  Revenue;  Juanita                 
  Hensley, Chief, Driver Services, Dept. of Public Safety; Ron                 
  King,  Dept. of  Environmental  Conservation;  and aides  to                 
  committee members and other members of the legislature.                      
  SUMMARY INFORMATION                                                          
  SB  28 -  MOTOR VEHICLE REG FEE/EMISS'N INSPECTIONS                          
            Discussion  was  had  with Ron  King  and  Juanita                 
            Hensley.  Amendment  No. 1, by Senator  Sharp, was                 
            adopted.    Amendment No.  2,  by  Senator Donley,                 
            removing fee provisions (Secs. 1, 4, 5, and 6) and                 
            returning Sec. 3 language to status  quo statutory                 
            language  (including  a  conforming  amendment  to                 
            wording in Amendment No. 1) was adopted.   CSSB 28                 
            (Fin) was REPORTED OUT of  committee with a $250.0                 
            fiscal  note  from  the   Dept.  of  Environmental                 
            Conservation  and a revised,  $58.8, note from the                 
            Dept. of Public Safety.                                            
  SB 116 -  PATERNITY; CHILD SUPPORT ENFORCEMENT                               
            Discussion was had with Glenda  Straube.  The bill                 
            was subsequently HELD in committee for  additional                 
  SB 130 -  MARINE PILOTS                                                      
            Lengthy discussion  was had  with Senator  Pearce,                 
            representatives of pilot  associations, and  other                 
            interested parties.  Amendment  No. 1, by  Senator                 
            Sharp, was moved by Senator Phillips  and adopted.                 
            Amendment No. 2 failed.  The bill was then held in                 
            committee for further review.                                      
  SENATE BILL NO. 130                                                          
       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                 
  Co-chair Halford  directed that SB  130 again be  brought on                 
  for discussion.   Citing tramper  shipping into Chignik  and                 
  Larson Bay as examples, Senator Zharoff attested to problems                 
  with arrangements in coastal areas whereby a different pilot                 
  is  needed  for adjoining  ports.   DALE  COLLINS, Southeast                 
  Alaska Pilots Association,  acknowledged that in  many cases                 
  two pilots  are  needed  when  the regional  line  is  drawn                 
  between  ports.  He  stressed that in  creating the regions,                 
  the intent was not  to place undue economic pressure  on any                 
  one region or port.   For pilots, the  intent was that  they                 
  have a  large enough region to  make a living.   Mr. Collins                 
  noted that  the standards are set by  the federal government                 
  rather  than  the state.    He said  that  using a  pilot to                 
  overlap  between the  two regions  can be  addressed by  the                 
  Board  of  Marine Pilots.   If  industry  or the  pilots can                 
  demonstrate an economic  hardship, the  board can work  with                 
  the communities.   The purpose of established regions  is to                 
  keep pilots  from bouncing  from one  area of  the state  to                 
  another.   There  was considerable  discussion about  buffer                 
  zones or  inter-regional zones.   Mr.  Collins defended  the                 
  Board of Marine Pilots action in creation of regional  zones                 
  that  take both  safety  and  economic  considerations  into                 
  Kate  Tesar, Alaska  Coastwise  Pilots from  Ketchikan, next                 
  spoke before committee, voicing wholehearted support for the                 
  legislation.   She  associated  her  comments  with  earlier                 
  remarks  made  by  Senator Pearce  and  expressed  hope that                 
  proposed changes to the rewrite in 1991 would eliminate many                 
  of the problems and lessen the chance of litigation.                         
  Referencing provisions for  dispute resolution or mediation,                 
  Ms.  Tesar  advised   that  ACP  has  incorporated   similar                 
  provisions into many of its contracts.                                       
  Speaking to  a tariff,  Ms. Tesar  said that  the group  she                 
  represents is  pleased with the  way things are  going since                 
  the maximum tariff was  sunset last year.  She  advised that                 
  if a tariff is going to be discussed as part of the proposed                 
  bill, the ACP  would support a  maximum tariff over a  fixed                 
  tariff.  The ACP supports competition.  The group is neutral                 
  on cross regionalization.                                                    
  Paul  Fuhs, representing  the  Southwest Pilot  Association,                 
  testified in support of the legislation in its current form.                 
  He attested to  need to ensure safety  in large geographical                 
  areas with dynamically changing water  and shoal conditions.                 
  He noted  that the U.S. Coast  Guard can go anywhere  in the                 
  state,  but  it  often checks  with  local  pilots  prior to                 
  proceeding.   Necessary information and local  knowledged is                 
  provided to the Coast  Guard without cost.   He acknowledged                 
  industry  testimony  expressing  a  preference  for  binding                 
  arbitration  first,   or  a   maximum   tariff,  and   cross                 
  regionalization only as a last resort.   The reason for that                 
  is practical problems associated with cross  regionalization                 
  in  terms of having  a central  dispatch station.   Industry                 
  does not want to call 30 different pilots in a region to get                 
  a dispatch.   Mr. Fuhs  asked how a  tariff could be  set if                 
  service is broken up by cross regionalization.                               
  He next addressed support for the apprenticeship program and                 
  spoke to a  willingness to take  on more pilots and  welcome                 
  people  into  piloting.    The  apprenticeship  will  enable                 
  trainees to commit  to the program and  a particular region.                 
  Pilot groups are also making a commitment to them.  He noted                 
  that every year, Alaska's  congressional delegation gets two                 
  appointments to  the Maritime  Academy.   That represents  a                 
  good  beginning  for  those  who   seek  to  become  pilots.                 
  Speaking to actual training, Mr. Fuhs noted that there is no                 
  school.   Training  occurs aboard  various ships,  including                 
  foreign vessels.   It involves not only local  knowledge but                 
  ship handling as well.                                                       
  Eric  Eliasson,  President  of  the  Southwest  Pilots,  and                 
  Chairman  of  the   Alaska  State   Pilots  Alliance,   next                 
  testified.   He voiced  support for  the  bill as  presently                 
  written,  explaining that the  Alliance was  responsible for                 
  drafting  the legislation.   He  acknowledged discussion  of                 
  cross regionalization  and  a  possible  amendment  relating                 
  thereto and expressed strong opposition.                                     
  Mr.  Eliasson  advised that  in region  2,  over 50%  of the                 
  income  comes  from  Valdez.    The  tariff   in  Valdez  is                 
  approximately 80% higher than other ports such as Kodiak  or                 
  Seward.  Service  to Valdez,  in effect, subsidizes  outport                 
  work.   He  related past  experience and  stressed need  for                 
  pilots  to  serve  only  one  area.   Speaking  to  regional                 
  borders, Mr. Eliasson noted that until 1991, regions 2 and 3                 
  were one region.  Region 2 pilots realized  they were unable                 
  to service  the entire  area.  With  the help of  the Marine                 
  Pilot Board, it  was split into  two regions.  Mr.  Eliasson                 
  acknowledged  talk  of  four, non-resident  individuals  who                 
  broke away from the original region  2 who are supportive of                 
  cross regionalization.   Existing   pilot groups consist  of                 
  all except four pilots in the state.  None of the groups are                 
  proposing cross  regionalization.   Only  those four  pilots                 
  support the idea.                                                            
  Mr.  Eliasson  next  expressed  concern regarding  training,                 
  citing both  safety and economics.   He voiced reluctance to                 
  take on new trainees when  the future appears so  uncertain.                 
  The  Southwest  Pilots'  Association is  totally  opposed to                 
  cross regionalization.   The group does not oppose a maximum                 
  tariff or dispute resolution.                                                
  Senator Zharoff proposed the following language change:                      
       the Board  shall provide  for overlapping  regions                      
       when  it  is   in  the  best  interest   of  local                      
  as a means  of dealing  with adjoining ports  which fall  in                 
  different  regions.   Mr. Eliasson  explained that  trampers                 
  often take on 50 tons of frozen  fish at Larson Bay and then                 
  proceed to Port  Bailey and on  to Seward.  He  acknowledged                 
  questions concerning an appropriate  cut-off line as  pilots                 
  take  vessels  from  community  to  community.   Overlapping                 
  regions, however, would  not solve the problem.   The border                 
  would merely shift.   Mr. Fuhs interjected  that communities                 
  are not paying more because of need for more than one pilot.                 
  Due to cost sharing  between the pilot groups, they  are not                 
  charging more.                                                               
  In  response  to a  question  from Co-chairman  Halford, Mr.                 
  Eliasson  advised of three  pilots who sought  to corner the                 
  lucrative piloting service to Valdez  and purchased homes in                 
  that community.  The attempt represents an example of cherry                 
  picking.    The cost  of bringing  a  tanker into  Valdez is                 
  $1300.  The cost  into Kodiak  is $500-$600.   Approximately                 
  600 ships go into Valdez each  year, whereas the number into                 
  Kodiak  is  relatively few.   If    outports do  not require                 
  servicing  (which  they do  now, because  they are  within a                 
  region served by a specific association) pilots will  pick a                 
  port that is lucrative economically.  To induce pilots to go                 
  to Kodiak, the  tariff would have to  be raised.  The  three                 
  above-mentioned pilots who purchased homes in  Valdez sought                 
  to position themselves for the oil shippers.  They wanted to                 
  be full-time  employees available  to the  oil companies  on                 
  demand.  The problem then is that pilots would not go to the                 
  outports.   Smaller communities  will be  hurt if  economics                 
  alone drives service. They are not  big centers of commerce.                 
  They are often production points,  with annual fish pickups.                 
  Co-chair Halford inquired regarding currency requirement for                 
  taking tankers into Valdez?  Mr. Eliasson advised of 60 days                 
  per  year.   The association  has four people, on a rotating                 
  basis.   Co-chairman  Halford noted  that the tariff  out of                 
  Valdez is part of the cost of Alaskan oil.                                   
  Ginny Faye,  representing the Prince William  Sound Regional                 
  Citizen's  Advisory Council,  located  in Valdez,  next came                 
  before  committee.   She  attested  to considerable  concern                 
  regarding traffic in and  out of Valdez.  The  membership is                 
  acutely aware  of what  happens when  there is  a change  in                 
  marine  pilotage.    The   Council  questions  whether   the                 
  competitive model is the safest way  to operate.  It focuses                 
  attention  on economic  as opposed  to safety  issues.   The                 
  Council's  only  concern   is  safety.    Ms.   Faye  voiced                 
  opposition to cross regionalization.   She expressed concern                 
  that if it were allowed, when the cruise ship season ends in                 
  Southeast and fishing  ends in Southwest, pilots  from those                 
  regions would begin to  compete with pilots in Valdez.   She                 
  questioned  whether the  state should  encourage competition                 
  among pilots.                                                                
  Senator Rieger asked if cross regionalization would give the                 
  right to the  lower bidder  to pilot in  the most  desirable                 
  area?      Ms.  Faye   responded   that  according   to  her                 
  understanding of the amendment, a  licensed pilot could take                 
  the necessary  trips to  have a  license in another  region.                 
  Under "port-specific" licensing, considering the dynamics of                 
  the Alaska landscape, it seems  unlikely a pilot could  ever                 
  have enough  experience to  cover  two whole  regions.   The                 
  tendency  would  be to  go after  the  lucrative ports  in a                 
  region.    She  reiterated concern  that  such  pilots would                 
  underbid  local  Valdez  pilots.    There  was  considerable                 
  further discussion regarding this point.   Ms. Faye stressed                 
  that a pilot  who spends much  time operating in a  specific                 
  region  would  be  a  safer   pilot.    Co-chairman  Halford                 
  suggested that licensing  for a specific port  would provide                 
  the maximum safety.   Ms. Faye concurred that that  would be                 
  the safest if Alaska had many  pilots and much more shipping                 
  activity.  That is not the  case.  She expressed support for                 
  division of the initial region  2 into two separate regions,                 
  and  again stressed  that cross  regionalization would  move                 
  further away from safety  by allowing a pilot to  operate in                 
  more than one region.                                                        
  Senator Pearce advised that 18 pilots are presently licensed                 
  to  bring tankers into and out of the port of Valdez.  Cross                 
  regionalization was examined in 1991, and statutes created a                 
  system that  would provide for  overlapping.  The  board has                 
  chosen  not  to  incorporate  that  system for  good  safety                 
  reasons.  Since 1991, the  industry, particularly the cruise                 
  ship industry, has wanted cross regionalization.  The intent                 
  was to use the  same pilot coming across the  gulf of Alaska                 
  and  in  and out  of Prince  William  Sound and  Cook Inlet.                 
  There is  now more cruise ship  trade in Cook Inlet  than in                 
  1991, and more  ships are coming in  the future.  Pilots  in                 
  Prince  William Sound  and Cook Inlet  all know  each other.                 
  They  work together  every day.   They provide  pilotage 365                 
  days a  year no matter what  the weather.   Cruise ships and                 
  their  captains  only come  into  those waters  for  a short                 
  period of time in the summer.  Pilots who work together know                 
  and  understand  how  each  one  works, and  that  knowledge                 
  prevents  an  incident  from  happening.     The  board  has                 
  continued to avoid  cross regionalization.  There  have been                 
  numerous litigations.  Every action the board has taken over                 
  the past  four years has ended  up in court.   The situation                 
  became  so  heated  that  a  board  member  from  Sitka  was                 
  threatened and  ended up resigning  his seat because  he did                 
  not vote  the  way industry  wanted  him to  vote.   If  the                 
  legislature  allows  cross  regionalization,  pressure  from                 
  industry will become  incredibly intense.  That is  the kind                 
  of  heavy  handedness  the  board  has  been  dealing  with.                 
  Senator Pearce suggested that present language providing for                 
  "emergency allowances" would take care of the problem.                       
  Bruce   Weyhrauch,   representing   the    Southeast   Pilot                 
  Association,  next   came  before  committee  to   speak  in                 
  opposition to a proposed amendment  relating to the handling                 
  of  disputes and  to  present an  alternative therefor.   He                 
  explained  that  under  the amendment,  when  parties  go to                 
  mediation, the state requires the cost of the mediator to be                 
  borne equally by the  parties.  If the parties  cannot reach                 
  an agreement over the price of  the pilot service, the issue                 
  goes to Superior Court.  The Superior Court then appoints an                 
  arbitrator.  If the arbitrator reaches a decision, it can be                 
  appealed to the Superior Court, and the ruling by that court                 
  can be appealed to  the Supreme Court.   Eventually, someone                 
  will fix the amount of that  pilot's service. The process is                 
  lengthy  and cumbersome.  In essence, the amendment does not                 
  fix the problem.  The state does  not want to fix the tariff                 
  because it wants an arbitrator and  mediator to decide.  Mr.                 
  Weyhrauch suggested  that  the tariff  must  be fixed  or  a                 
  tariff and competitive pilotage should be imposed.  Co-chair                 
  Halford inquired concerning a maximum tariff.  Mr. Weyhrauch                 
  said it would not help.  He stressed  it would promote price                 
  collusion, between competitors, to charge  the maximum.  The                 
  competitive system invokes anti-trust laws, and  competitors                 
  are subject  to those  laws.   A maximum  tariff only  works                 
  where there is  no competition, but the legislature wants to                 
  promote competition.                                                         
  Joe  Kyle,  representing the  Alaska  Steamship Association,                 
  stated that the  membership pays  for pilotage in  Southeast                 
  and the Gulf  of Alaska.   The Association is supportive  of                 
  the amendment because, as customers,  they foresee a problem                 
  if  there  is not  something in  the  act that  provides for                 
  dispute resolution when shippers and  pilots cannot agree on                 
  price.    Mr. Kyle  reiterated  his prior  comment  that the                 
  number of pilots has decreased at the same time that traffic                 
  has increased.  Industry is faced with  pilotage that barely                 
  meets   demand.    Considerable  discussion  of  this  point                 
  followed.  Mr.  Kyle said the  Association is looking for  a                 
  rational, methodical way to settle disputes so that commerce                 
  moves with state licensed pilots aboard.                                     
  Mr.  Kyle suggested that the proposed bill had consumed much                 
  legislative time on behalf  of 68 pilots.  He  then attested                 
  to  difficulties associated with attempts to include dispute                 
  resolution  such  as binding  arbitration,  money  placed in                 
  trust, trial  mediation, etc., in the bill.   Senator Pearce                 
  advised  that  the  pilots  did  not  work  against  binding                 
  arbitration.  She said she was the one who would not include                 
  binding arbitration in  the bill.   She attested to  working                 
  with other legislators to  keep it out.  She  suggested that                 
  Mr.   Kyle   was    mischaracterizing   what   happened   in                 
  Further  lengthy  discussion  followed   regarding  proposed                 
  amendment no 1.                                                              
  End  :    Tape SFC-95, #48, Side 2                                           
  Begin:    Tape SFC-95, #50, Side 1                                           
  Captain Michael O'Hara, Member of the Board of Marine Pilots                 
  and a  Pilot in  region 2,  voiced support for  the bill  as                 
  written.    He  advised  that  he  does  not  support  cross                 
  regionalization, but would like to see some way of resolving                 
  Senator  Zharoff  asked  where  the maritime  academies  are                 
  located.    Captain O'Hara  advised  of five  in  the United                 
  States.   Two  in New  York, and  one in  Maine, Texas,  and                 
  California.   The  Marine Pilots  Association has  discussed                 
  sponsoring a student  in an academy.   The institutions  are                 
  four-year  colleges  offering  a  B.S.  degree  in  nautical                 
  science or engineering  and a  license to work  as a  junior                 
  mate  on  a  ship.   That  is  one  way  to  accomplish  the                 
  apprenticeship program.  Senator  Zharoff suggested that  it                 
  is  ultimately  too  difficult  for  Alaskans to  enter  the                 
  program.    Captain O'Hara  advised of  six trainees  in his                 
  organization.    He also  noted  that  the cost  of  a pilot                 
  license  increased  from  $800 to  $3500.    Many non-active                 
  pilots resigned because they did not  want to pay the higher                 
  licensing  fee.   The  fee  was  raised because  of  all the                 
  litigation.   The loss  amounted to  15-20 pilots.   Captain                 
  O'Hara said that the basic criteria for licensing is need to                 
  obtain a  federal license. The  only way to  achieve federal                 
  licensing is by working on boats  or ships.  The Coast Guard                 
  license  is  the  initial  criteria  for obtaining  a  state                 
  license.   The  apprenticeship  program incorporated  within                 
  legislation  now before committee is five years.  The board,                 
  along  with  the marine  pilot  coordinator, would  design a                 
  system whereby a candidate could become a pilot.                             
  Co-chairman  Halford  inquired concerning  litigation giving                 
  rise to the increased licensing fee.  Captain O'Hara advised                 
  that  the  board  is  winning cases.    Payments  for  legal                 
  services have been made to the Dept. of Law.                                 
  Discussion followed  between Captain O'Hara  and Co-chairman                 
  Halford regarding currency requirements for a specific port.                 
  Captain O'Hara advised of 60 days per region.  He added that                 
  the proposed bill would  increase it to 120 days  within the                 
  biennial  license  renewal  period.     There  was   further                 
  discussion of present law  and the dispatching of pilots  to                 
  ports  to  which  they  rarely   go.    Co-chairman  Halford                 
  suggested use of  currency requirements  as a hedge  against                 
  arguments in  opposition to cross regionalization.   Captain                 
  O'Hara advised that a pilot  organization would not dispatch                 
  a pilot  to a  port he has  not been to  for some  length of                 
  Senator Rieger asked Captain O'Hara  to comment on pressures                 
  placed  upon  the  board and  where  they  are  coming from.                 
  Captain  O'Hara advised  of  a board  members  in Sitka  who                 
  operates a  charter fishing  company.   He was  economically                 
  threatened by the cruise ship industry and resigned.  He had                 
  received a letter from a steamship  company that told him he                 
  would  not be  on their  approved list.    The threat  was a                 
  result of his  not voting  the way they  wanted him to  vote                 
  with regard to tariffs.                                                      
  In  response  to  a question  from  Senator  Rieger, Captain                 
  O'Hara   said   that   present   law    allows   for   cross                 
  regionalization  when  it is  "in the  best interest  of the                 
  state".   The proposed bill gives  an adequate definition of                 
  the "best interest of the state".                                            
  Speaking to the apprenticeship  program, Captain O'Hara said                 
  that if  he  were to  set  it up,  it  would be  a  regional                 
  concept.      The  regions   are   significantly  different.                 
  Anchorage has  ice and extreme tides; Kodiak has high tides;                 
  Larsen Bay is  very difficult with  both a high current  and                 
  high tides.   The program should  design an   apprenticeship                 
  which  meets  the needs  of the  individual  region.   As an                 
  example,  the  Kuskokwim has  only  small tugs  and Japanese                 
  trampers.  An apprentice would have to  ride five years.  He                 
  noted that  the Kuskokwim is  only navigable three  months a                 
  year when it is ice free.  That would necessitate a 15-month                 
  training program.   During the time that the pilot is not on                 
  the  Kuskokwim,  he or  she would  be  in another  region or                 
  another part of  the world, training, watching,  and doing a                 
  job  until the Kuskokwim  is again open.   In  region 2, the                 
  five-year program would include riding  the cruise ships and                 
  tankers.  Maritime  schools are  available, and the  program                 
  could be  written to  include the  school.   There was  some                 
  discussion regarding  qualifying for the  various areas.  In                 
  the future, regions will be sliced smaller.  Regions are now                 
  so large that it  is impossible to gain proficiency  in more                 
  than one region.                                                             
  Co-chairman  Halford  asked  if  lack  of   multiple  region                 
  licensing is a  restriction on Alaskans.  He asked  if it is                 
  possible for a  non-Alaskan to be licensed in  another state                 
  and in a region in Alaska as well.                                           
  Dan Twohig, Coordinator,  Board of  Marine Pilots, Dept.  of                 
  Commerce  and  Economic  Development, noted  that  state law                 
  requires federal licensing before seeking state  endorsement                 
  for a  region. Federal pilotage endorsements  are relatively                 
  common in the maritime industry.   That licensing allows for                 
  licensing  anywhere   in  the   country.     Senator  Donley                 
  questioned whether  non-Alaskans hold licensing  outside the                 
  state at the  same time they are licensed to  pilot a region                 
  in Alaska.   Mr. Twohig  stressed that the  position of  the                 
  department is that  the purpose of  the Marine Pilot Act  of                 
  1991 is  to prevent the  loss of lives  and property in  the                 
  protection  of  the  marine environment  of  Alaska.   State                 
  licensing standards  are to  ensure the  very best  possible                 
  pilots for Alaska.  What non-resident pilots do in their off                 
  time,  the Dept  of  Commerce and  the State  would consider                 
  their affair.  Senator Pearce noted that a pilot in training                 
  is not paid.   Most of them  work on board other  ships. She                 
  stated that statutes could require that, "people who have an                 
  Alaskan pilotage license cannot be licensed elsewhere."                      
  Co-chair  Halford  stressed that  currency  ought to  be the                 
  concentration.  Senator  Pearce stated  that the board  sets                 
  the  regulations.   She  stated that  currency in  Alaska is                 
  different  than in  other  states.   Mr.  Twohig noted  that                 
  current regulations require 60 days per calendar year.  Some                 
  pilots are having a difficult time making the 60 days due to                 
  vessel movements and the rotation process.   If a pilot does                 
  not achieve  60  days, he  is  required to  conduct  various                 
  familiarization  trips  into and  out  of the  ports  in his                 
  region before  his license  can be  renewed.   The  proposed                 
  change is  for 120  days over  2 years.   The  intent is  to                 
  provide a 2-year span to gather the required days.                           
  Senator  Zharoff  expressed  concern regarding  whether  the                 
  apprenticeship program will produce results.  Senator Pearce                 
  suggested that it is incumbent upon Alaskans to decide to do                 
  what it takes to become a marine pilot.                                      
  In response to an  earlier question, Captain O'Hara said  it                 
  would not be  safe for  one with pilotage  knowledge in  one                 
  region  to select   a port in another  region for service as                 
  well.  He  reiterated that it would not be safe to hold both                 
  a  license in region  3 and a  license for Valdez.   A pilot                 
  cannot come from Ketchikan  or Dutch Harbor and work  in the                 
  ice in Anchorage and only do so once or twice a year.  It is                 
  not safe.   The associations  will not dispatch  a pilot  to                 
  Valdez, for  example, if  he only  works a  couple months  a                 
  year.  Pilots are on a regular rotation.  They are there for                 
  two weeks out of five or six, then they go to Cook Inlet and                 
  work  in  the ice.   Co-chair  Halford suggested  a scenario                 
  whereby one would pilot cruise ships all summer  and tankers                 
  in the winter.  Captain O'Hara said that licensing by vessel                 
  type does not  exist,  with  the exception of  a Very  Large                 
  Crew Carrier  (VLCC).   VLCCs are  different than  all other                 
  ships.  The  board has determined that  various ships can be                 
  learned, and what  is important is  the local knowledge  and                 
  ship handling ability.   Licensing  is by region.   That  is                 
  true everywhere else in the country.                                         
  At this point  in the meeting, Co-chairman  Halford directed                 
  that it be briefly recessed.                                                 
                        RECESS: 5:10 P.M.                                      
                      RECONVENE: 5:35 P.M.                                     
  Senator Phillips offered an amendment on dispute resolution.                 
  Senator  Donley  suggested   that  the  current  arrangement                 
  represents  a monopoly and further suggested that there must                 
  be a way  to bring finality.   Co-chair Halford stated  that                 
  the bill  needs either  a maximum tariff  or an  arbitration                 
  provision.  He  voiced his inclination  to vote against  the                 
  amendment at this time.  Upon a show of hands, amendment no.                 
  1 was ADOPTED on a vote of 4 to 3.                                           
  End  :     Tape, SFC-95, #50, Side 1                                         
  Begin:     Tape, SFC-95, #50, Side 2                                         
  Senator Rieger moved for adoption amendment  no. 2, relating                 
  to board issue  of a  temporary license for  a region  other                 
  than the main region  within which a pilot is licensed.   He                 
  then  offered  an  amendment to  the  amendment  which would                 
  insert the word, "certain" in front of the word "vessels" on                 
  line 20 of page 1  of the amendment.  The  Senator expressed                 
  concern that, absent the amendment,  the proposed bill would                 
  create stringent law  that excludes a very  qualified person                 
  from  doing  the  job.    Co-chairman  Halford  expressed  a                 
  preference for  achieving a similar result  through currency                 
  requirements.    He  then called  for  a  show  of hands  on                 
  adoption of amendment  no. 2.  The amendment FAILED on a tie                 
  vote of 3 to 3.                                                              
  Senator Donley stated that the binding arbitration amendment                 
  and a maximum  tariff are not  inconsistent.  They can  both                 
  exist within  the legislation.   Co-chairman  Halford voiced                 
  need  to  review provisions  that  were recently  sunset and                 
  develop a "safety valve."  He directed that the bill be held                 
  for further study.                                                           
  SENATE BILL NO. 116                                                          
       An Act  relating  to  administrative  establishment  of                 
  paternity      and  establishing  paternity   by  affidavit;                 
  relating to child   support enforcement;  and providing  for                 
  an effective date.                                                           
  Co-chairman  Halford directed that SB  116 be brought on for                 
  discussion and noted  that it was sponsored  by the Governor                 
  and  previously heard by both the  Senate Health, Education,                 
  and  Social Services  Committee  and  the  Senate  Judiciary                 
  Committee.      It   received   predominantly   "do    pass"                 
  recommendations in both prior committees.                                    
  Glenda   Straube,   Director,   Child  Support   Enforcement                 
  Division, Dept. of  Revenue, testified that the  bill allows                 
  for administrative establishment of paternity.   New federal                 
  guidelines require that  75% of all child  support audits be                 
  established  within  six months.    Paternity must  first be                 
  established before  a child support order may  issue.  Court                 
  backlogs are  taking up to  six months to  approve paternity                 
  work.  The  bill would allow administrative  paternity under                 
  the same standards used  by the court system.   Paternity is                 
  established either  by voluntary acknowledgement  or genetic                 
  testing showing a 95%  or greater chance of paternity.   Due                 
  process assurances would remain in place.  The process would                 
  allow for informal and formal  conferences and appeal to the                 
  For   an  annual  investment  of  approximately  $73.0,  the                 
  proposed bill  would allow the  division to bring  in $850.0                 
  per year in AFDC reimbursements alone.  The division cannot,                 
  at this time, comply with federal guidelines when the courts                 
  are taking up  to 6 months to  sign off on paternity.   Time                 
  needs to be shaved off the process.  The proposed bill would                 
  cure the problem, decrease the  general backlog in the court                 
  system, and reduce Dept  of Law time in preparing  for court                 
  Ms.   Straube  next  addressed   problems  which   arise  in                 
  situations wherein both the wife and  husband state that the                 
  husband is  not the father,  and a third  party acknowledges                 
  paternity.   The  State cannot,  at  this time,  accept that                 
  knowledge  without going to court.   The proposed bill would                 
  allow for acceptance of an  affidavit from all three parties                 
  acknowledging  who  the  father  is.   That  will  avoid the                 
  expense of delay in filing a paternity action.                               
  Co-chairman  Halford posed  a  questioned regarding  genetic                 
  testing.   He asked  if the blood  test is  evaluated in the                 
  probability that 95% means for sure one is the father?   Ms.                 
  Straube  responded that most test results are in the 98%-99%                 
  range.  Statutes  specify 95% since  that is the  percentage                 
  used by the  court system.  If a father wants to contest the                 
  validity of fatherhood, he can go through  the court process                 
  and  have a blood test taken.   Ms. Straube attested to past                 
  policy which  did not  allow for  disestablish of  paternity                 
  unless  paternity is established for a third party.                          
  Ms. Straube reiterated  that the purpose  of the bill is  to                 
  more   quickly   resolve   cases  by   obtaining   financial                 
  information and genetic  testing.  The  effort is to  reduce                 
  the process so it is more timely for all parties.                            
  In response  to a question from Senator  Rieger, Ms. Straube                 
  advised  that  child  support  enforcement  consists of  170                 
  positions  with the  intent of  bringing 30  more on  board.                 
  Senator Rieger  proposed splitting  the agency  in half  and                 
  calling it by two different names: Child Support  Agency and                 
  Child Support Enforcement Agency.   The Child Support Agency                 
  would  handle  child support  orders  until payments  are in                 
  arrears.  Once  in arrears, the  person would report to  the                 
  Child  Support  Enforcement  Agency.   He  advised  that the                 
  suggestion stems  from complaints  from timely  obligors who                 
  feel  they have  been handled  like deadbeats.   Ms. Straube                 
  indicated that the  division is being reorganized  so that a                 
  client is given one person and that  person meets all his or                 
  her needs.  There are two levels of employees in this field,                 
  one of which  will be handling  the payments.  The  division                 
  was  able  to  effect  this  change  without  new  statutory                 
  A question of safety was raised.  Ms. Straube acknowledged a                 
  problem with safety  and having to work  behind bullet-proof                 
  Senator Rieger asked if  the division has the ability  to do                 
  income withholding  orders on non-custodial parents  who are                 
  current   on   their  child   support   payments  (automatic                 
  End     Tape SFC-95, #50, Side 2                                             
  Begin   Tape SFC-95, #52, Side 1                                             
  There was considerable discussion  regarding genetic testing                 
  and its use  in determining paternity.   Co-chairman Halford                 
  stressed need for  availability of genetic testing to  a man                 
  who has  assumed the  obligation of  payment of support  but                 
  subsequently has reason to believe he  may not be the father                 
  of the child.   It  was determined that  testimony from  the                 
  Dept  of  Law was  needed.   Continued  discussion regarding                 
  children who  have been adopted and  psychological parenting                 
  ensued.   The bill  was subsequently  held in  committee for                 
  further review.                                                              
  SENATE BILL NO. 28                                                           
       An Act repealing  an additional  fee for motor  vehicle                 
       registration not conducted  by mail and limiting  motor                 
  vehicle   emissions inspection to once every two years.                      
  Co-chairman  Halford directed that SB 28  next be brought on                 
  for discussion.   Senator Donley explained that  the purpose                 
  of  the  bill is  two-fold.   The  first  is  change of  the                 
  inspection  and maintenance  program for certification  to a                 
  biennial rather than  an annual basis.   He asked that  this                 
  section, only, be  the one moved  with the bill.   Remaining                 
  sections within  the bill  are not  interdependent and  have                 
  generated   increasing  concern.      Both   the  Dept.   of                 
  Environmental  Conservation  and   the  division  of   motor                 
  vehicles  have indicated  support  for the  bill.   With the                 
  additional jurisdictional capability,  they believe they can                 
  sell biennial testing  to the  federal EPA.   Alaska is  the                 
  only state that  does annual  testing.  California  conducts                 
  biennial  testing statewide.   Movement to  biennial testing                 
  would save Alaskans time and money.                                          
  Co-chair Halford  inquired regarding  fines and  fees within                 
  the  bill.  Senator Donley  responded  that the  legislation                 
  increases  the  current  $75  fine  to  $200.     Ron  King,                 
  Department of Environmental  Conservation testified that the                 
  current fine is a class A  misdemeanor for which a complaint                 
  must be filed in court.  The fine can amount to $5.0 and one                 
  year in jail.  The proposed  change would make it a citation                 
  and  not require court  action.  He stated  that the Dept of                 
  Environmental   Conservation   has   extended  the   vehicle                 
  inspection program to  commuters to  and from the  Matanuska                 
  Valley  and  achieved 75%  compliance.   He said  that 2,200                 
  vehicles  have  been  inspected.    The  division  of  motor                 
  vehicles  reports  that  2700  commute.     Some  are  under                 
  investigation as class A misdemeanors.                                       
  Juanita Hensley, Chief,  Driver Services, Division  of Motor                 
  Vehicles,  Dept of Public Safety,  said the bill would bring                 
  in $2.55  million in additional revenue.  She explained that                 
  in  1994 the $10  fee was waived  for 15%  of 6,500 vehicles                 
  registered in the state.  The  additional revenue is derived                 
  from doing  away with  waiver of  the  $10 fee.   The  final                 
  source  of new revenue would be new vehicles or out-of-state                 
  vehicles registered  for the  first time  in Alaska.   These                 
  vehicles would pay  the increased  fee because the  original                 
  transaction involving a  title cannot be  done by mail.   In                 
  1994 there  were approximately 140,000  registrations.  This                 
  would generate $1.4 million  in revenue.  The total  revenue                 
  from  all these  sources  would be  $2.5  million.   Senator                 
  Rieger expressed support for giving a credit for registering                 
  by mail rather than a penalty for going into the division of                 
  motor  vehicles  to  register.    Co-chair Halford  inquired                 
  concerning how to make the legislation revenue neutral.  Ms.                 
  Hensley responded that the status  quo would make it revenue                 
  Senator Sharp MOVED to  adopt amendment no. 1.   Ms. Hensley                 
  stated that in  Anchorage people can register  their cars at                 
  emission  testing  stations.   One  station in  Anchorage is                 
  currently  not  charging  the $10  fee.    Approximately 150                 
  registrations  are  processed  daily through  the  stations.                 
  They process  the work for the DMV,  and if they collect the                 
  $10, they keep it.  They have gone to the expense of putting                 
  in  computers  and hook  ups to  accomplish  the work.   The                 
  Legislative Budget  and Audit  Committee approved $100.0  to                 
  pay for  the data  processing charge-back  and for  required                 
  data storage.                                                                
  There   was  considerable   discussion   of  extending   the                 
  registration period to two years.   Mr. King stated that the                 
  department has the ability to go  to a two-year period.  The                 
  department's intention has  been to move to  that time frame                 
  when  possible.    It  is   contingent  upon  Anchorage  and                 
  Fairbanks  attaining  standards.    He  attested  to  recent                 
  changes in terms  of reliability  of automobiles, and  noted                 
  that with the  enforcement provisions in the  proposed bill,                 
  the  department  can begin  working  on cases  and achieving                 
  greater  compliance.  These items are  key to EPA acceptance                 
  of the program change.  The Clean Air Act will not allow the                 
  state to be less  stringent.  Mr. King reiterated  that with                 
  increased enforcement  and compliance  and newer  technology                 
  cars, the department can extend testing to a two-year period                 
  and  make  the argument  that there  is  no decrease  to the                 
  overall effectiveness of the program.                                        
  Ms. Hensley noted that there are 631,000 vehicles registered                 
  in Alaska.   She stated  that deletion of  sections 1,3,4,5,                 
  and 6 would render the bill revenue neutral and maintain the                 
  status quo.  Emission program  portions relating to biennial                 
  testing would  remain in place.   No objection  being heard,                 
  amendment no. 1 was ADOPTED.                                                 
  Senator  Donley  MOVED to  adopt  the proposed  amendment to                 
  render the bill revenue neutral  by deleting sections 1,3,5,                 
  and 6, as well as a conforming amendment that sec. 3 reflect                 
  the statutory status quo.   He also included need  to insert                 
  the word  "not" after  the word "or"  in amendment no.  1 to                 
  conform the earlier adopted amendment to changes proposed by                 
  amendment no.  2.   Senator Rieger  OBJECTED.   He suggested                 
  that the bill could be made  revenue neutral by not deleting                 
  language on  page 2, lines 10,  11, and 12,  which refers to                 
  allowing a waiver  of the $10 fee for "a good cause based on                 
  criteria established in regulations by  the department."  It                 
  would  keep  the status  quo  but invert  the  fee structure                 
  eliminating the  penalty and giving  a credit instead.   Ms.                 
  Hensley noted  that Sections  10 and 11  should reflect  new                 
  section numbers.  The department would  like to be given the                 
  capability to  serve the public  so that neither  the public                 
  nor workers  are  burdened further.   That  was the  initial                 
  reason for inclusion of the $10 fee in earlier  legislation.                 
  Fiscal notes for both  the Dept. of Public Safety  and Dept.                 
  of Environmental Conservation are accurate.   In response to                 
  a question  from  Co-chairman Halford,  Ms. Hensley  advised                 
  that the  department is neutral  on the amendment.   Senator                 
  Rieger  OBJECTED  to the  conforming  amendment.   He voiced                 
  support for maintaining the status quo but said there should                 
  be  a credit for renewal  by mail rather  than a penalty for                 
  going to the  DMV in person.  He proposed an alternative way                 
  to make the  bill revenue neutral by raising the  $10 in the                 
  original base  fee and eliminating  the $10 surcharge.   Ms.                 
  Hensley noted that  the department  has regulations for  the                 
  waiver program  under provisions of  good cause. Co-chairman                 
  Halford called for a show of hands.  Amendment No. 2  FAILED                 
  on a vote of 3 to 2 with 1 abstention.                                       
  Senator Rieger MOVED  to adopt status quo  language relating                 
  to  the waiver  at page  2, lines  9, 10,  11, and 12.   Co-                 
  chairman Halford called  for a  show of hands.   The  motion                 
  FAILED on a vote of 1-4.                                                     
  Senator Donley MOVED to  rescind action in failing  to adopt                 
  amendment no 2.   With no debate, the committee voted 4 to 1                 
  with 1 abstention to rescind its  action on amendment no. 2.                 
  Senator  Donley then MOVED for  adoption of amendment no. 2.                 
  Co-chairman Halford called  for a show of  hands.  Amendment                 
  no. 2 was ADOPTED on a vote of 4 to 2.  Senator Sharp  MOVED                 
  for passage of CSSB 28 (FIN) with individual recommendations                 
  and attached fiscal notes.   Senator Rieger OBJECTED.   On a                 
  vote of 5 to 1, CSSB 28 (FIN) was REPORTED OUT  of committee                 
  with a revised  $58.8 fiscal  note from the  Dept of  Public                 
  Safety  and a  $250.0  note from  the Dept  of Environmental                 
  Conservation.     Senators  Donley  and  Sharp   signed  the                 
  committee  report  with  a "do  pass"  recommendation.   Co-                 
  chairman Halford and Senators  Phillips, Rieger, and Zharoff                 
  signed "no recommendation."                                                  
  The meeting was adjourned at approximately 7:20 p.m.                         

Document Name Date/Time Subjects