Legislature(1995 - 1996)
04/06/1995 04:12 PM Senate RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE RESOURCES SUBCOMMITTEE
ON SB 130
April 6, 1995
4:12 p.m.
SUBCOMMITTEE MEMBERS PRESENT
Senator Drue Pearce
Senator Rick Halford
Senator Lyman Hoffman
SUBCOMMITTEE MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
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 date."
PREVIOUS SENATE COMMITTEE ACTION
SB 130 - See Resources minutes dated 3/20/95. See
Resources Subcommittee minutes dated 3/23/95.
WITNESS REGISTER
Stephanie Szymanski, Legislative Aide to Senator Pearce
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Outlined changes in CSSB 130(RES)
Dan Twoig
Division of Occupational Licensing
Department of Commerce & Economic Development
P.O. Box 110806
Juneau, AK 99811-0806
POSITION STATEMENT: Supports CSSB 130(RES)
Gayle Horetski, Assistant Attorney General
Civil Division
Department of Law
P.O. Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Testified in support of CSSB 130(RES) and
suggested adding tariff provision
Mike O'Hara
Box 1443
Palmer, AK 99645
POSITION STATEMENT: Supports CSSB 130(RES)
Hans Antonsen
Southeastern Alaska Pilots Association
Box 6100
Ketchikan, AK 99901
POSITION STATEMENT: Supports CSSB 130(RES)
Benee Braden
Western Alaska Pilots Association
P.O. Box 792
Anchorage, AK 99508
POSITION STATEMENT: Supports CSSB 130(RES)
Larry Cotter
234 Gold St.
Juneau, AK 99801
POSITION STATEMENT: Testified in support of CSSB 130(RES)
Tex Edwards
Prince William Sound RCAC
P.O. Box 15014
Fritz Creek, AK 99603
POSITION STATEMENT: Supports thrust of CSSB 130(RES)
Doug MacPherson, President
Alaska Coastwise Pilots Association
P.O. Box 6337
Ketchikan, AK 99901
POSITION STATEMENT: Testified in support of CSSB 130(RES)
Peter Garay
Alaska Marine Pilots, Region 3
P.O. Box 2653
Homer, AK 99603
POSITION STATEMENT: Supports CSSB 130(RES)
Bob Evans
Alaska Marine Pilots Association
2822 Iliamna Ave.
Anchorage, AK 99517
POSITION STATEMENT: Testified on CSSB 130(RES)
Alan Walker, Representing Northern
Transporation
POSITION STATEMENT: Explained amendment to CSSB 130(RES)
ACTION NARRATIVE
TAPE 95-37, SIDE A
SB 130 MARINE PILOTS
Number 001
SENATOR PEARCE called the meeting of the Senate Resources
Subcommittee on SB 130 to order at 4:12 p.m. She directed
attention to a proposed committee substitute and asked for a motion
to adopt the committee substitute as a working document
SENATOR HALFORD moved that CSSB 130(RES) be adopted as a working
document. Hearing no objection, it was so ordered.
Number 025
SENATOR PEARCE requested staff to outline the differences between
the committee substitute and the original bill.
STEPHANIE SZYMANSKI, Legislative Aide to Senator Pearce, outlined
the following differences in the committee substitute:
Page 1, Section 2: Addresses concerns from industry that the two
seats they hold on the Board of Marine Pilots, that those agents be
registered active agents actually involved in obtaining pilotage
services. Also, it addresses a concern that not more than one
agent or manager may be employed by, be a contractor for, or hold
a financial interest in the same marine industry.
Page 2, Section 6: On line 31 the word "chronic" was deleted to
address a concern by the department that the word would limit their
ability to possibly address an emergency situation before it
happens.
Page 3, Section 8: Line 19 addresses a concern relating to
requirements for a deputy marine pilot license. Paragraph (2)
requires two years of service as a master on a United States Coast
Guard inspected vessel, which clarifies the vessel.
Page 6, Section 15: Lines 27 - 29 does not mandate but allows a
pilot organization to implement an apprenticeship program.
Page 7: A new Section 16 is added which was previously in Section
15 and amends the paragraph by changing the "shall" to "may."
Section 16 now provides that a pilot organization recognized by the
board may enter into agreements, etc.
Number 075
DAN TWOHIG, the marine pilot coordinator in the Department of
Commerce & Economic Development, stated the department has no
problem with the committee substitute. However, he pointed out
that in conversations with the Department of Law, concern was
voiced about the pilotage act and whether or not measures within
the pilotage act will create an exemption from federal antitrust
problems for pilot associations under the Sherman Antitrust Act.
Number 100
GAYLE HORETSKI, Assistant Attorney General, Civil Division,
Department of Law, stated the Department of Law also is in favor of
the committee substitute in the sense that the bill, as presently
drafted, addresses many of the legal issues which have been present
in the marine pilotage industry in Alaska since the adoption of the
1991 Act. She stressed the bill is badly needed and it would
definitely improve the provision of pilotage services throughout
the state mainly by clearing up some areas of uncertainty or have
given rise to litigation since the 1991 Act was adopted.
However, Ms. Horetski cautioned about a potential omission in the
bill that should be addressed, which is some kind of provision that
would specify the agency or entity responsible for establishing
what is to be charged for the providing of these pilotage services.
Due to an automatic sunset provision in the statute last year,
there is no either fixed or maximum tariff established in the State
of Alaska, which basically means that each individual pilot
association is able to set its own rate and charge different rates
for different companies, etc. Two reasons why that is of concern
are: (1) whether it makes good sense as a public policy matter to
require the use of pilots, but then be completely silent on what
they can charge; and (2) the Sherman Antitrust Act, which is a
federal statute that applies in the state as it does nationwide, as
well a state antitrust law.
Ms. Horetski explained that state law has a specific exception for
pilot associations, so there is no liability under the state for
pilot associations acting in compliance with the state statute.
However, the U.S. Supreme has said that in order for individual
companies or people to be able to assert a defense under the
federal antitrust law, there must be state supervision. This has
troubling implications for the antitrust liability under federal
law for the pilot associations if there is not sufficient active
state supervision of the tariff being charged by these associations
and their members to industry.
Ms. Horetski suggested to remedy the potential federal antitrust
problem a fixed tariff could be set by the board, or by the APUC,
or by the commissioner, etc., or, instead, a maximum tariff could
be set, below which pilot associations could compete, but their
rates could not go above that amount. As a third option, she said
there could be some type of dispute resolution mechanism, but she
didn't think that would really be sufficient.
Number 248
SENATOR HOFFMAN asked how oversight would be accomplished if a
maximum tariff was adopted. GAYLE HORESTKI answered that the
board, or some mechanism, sets the maximum tariff and then the
associations would be able to argue if they were sued under federal
antitrust law that there is sufficient supervision of their rates,
that they should be immune from federal antitrust.
Number 310
SENATOR PEARCE asked which of the three options, a fixed tariff, a
maximum tariff, or a dispute resolution mechanism, the Department
of Law feels would be most defensible and would most reach the
findings of even having pilots, which is the safety of the waters
of the state. GAYLE HORETSKI responded that if the question was
directed to maximizing the antitrust protection of the pilot
associations, in her opinion, the fixed tariff would give the
maximum protection.
Number 340
MIKE O'HARA, a board member on the Board of Marine Pilots and a
member of the Southwest Alaska Pilots Association, stated the
committee substitute was a good bill, but he does have a concern
with the five-year apprenticeship program on page 4 because it
doesn't demand command experience for entry level qualification.
Mr. O'Hara pointed out that in Region 2 there is only one state
pilot association, and they have gone on record as supporting some
sort of arbitration or maximum tariff because of the federal
antitrust implications. He added that in other regions the
implications of antitrust may not be as significant because there
is a competitive nature. He stressed that SAPA would like to see
some sort of protection from federal antitrust and they would
support whatever is necessary.
Number 363
HANS ANTONSEN, Southeast Alaska Pilots Association, voiced his
support for the committee substitute.
Mr. Antonsen said he doesn't see how the state is taking an active
participation in an oversight of a tariff setting process by
setting a hypothetical cap which isn't based on anything. If the
state's concern is to give pilotage some protection from federal
antitrust law, a maximum tariff doesn't do that. There could still
be price fixing underneath a maximum cap in industry or by any
third party. Further, he doesn't believe a maximum tariff
encourages shippers to negotiate contracts with pilots as does not
having a tariff stated.
GAYLE HORETSKI in responding to Mr. Antonen's remarks said the
protection for the associations under a maximum tariff is not as
clear cut as under a fixed tariff, but it certainly provides more
protection for the pilot associations, in the opinion of the
Department of Law, than nothing.
Number 420
BENEE BRADEN, representing Western Alaska Pilots Association,
voiced a concern with the makeup of the board. They strongly feel
that there needs to be representation of all three of the regions
because there are a lot of differences amongst the three regions
and the pilot expertise that is needed from each of those regions.
She emphasized that Region 3 needs to have membership on the board
as well as the other two regions. While the current language
doesn't exclude Region 3, it does put a limitation of the pilot
expertise that can be on the board.
Number 442
LARRY COTTER, testifying on behalf of the Alaska Steamship
Association, said in looking at this whole issue there are three
issues that are critically important: safety, service and cost.
He stated their support for a maximum tariff. They were willing to
support binding arbitration or some other form of dispute
resolution, but given the Department of Law's opinion, that doesn't
seem possible. Their fallback recommendation would be to support
a maximum tariff.
Number 462
SENATOR HOFFMAN inquired how a maximum rate would be determined.
LARRY COTTER responded that in the legislation that sunsetted last
year, there is a section that talks about pilotage tariffs. That
section has a host of criteria of what the board needs to take into
account in determining what a maximum tariff should be. The board
looks at the proposals for a maximum tariff and weighs those
proposals against the criteria to try to determine what is a fair
and equitable level for a maximum tariff.
Number 485
TEX EDWARDS, executive committee member, Prince William Sound RCAC,
testifying from Valdez, stated RCAC's concern is safety and
protecting the environment. RCAC supports the thrust of the bill,
and they urge the legislature and the committee to remain focused
on the impacts on all of the areas that are being debated.
Mr. Edwards voiced concern with the makeup of the board. He said
if the board is not going to set tariffs, they question if the
industry representation needs to be as great. He suggested perhaps
the board should be seen as a safety, training and licensing board,
and the issue of tariffs can be handled by a separate professional
group. He added that they would be opposed to any reduction in
public membership on the board.
Mr. Edwards stated support for service requirements for a deputy
marine pilot license, as well as the sanctions against pilots for
drug and alcohol use.
Number 530
DOUG MACPHERSON, President, Alaska Coastwise Pilots Association,
stated support for the legislation, but on the composition of the
board, they would like to see each region represented by pilots and
industry.
Speaking to antitrust concerns, Mr. MacPherson said right now it is
not entirely clear that pilots forming voluntary organizations to
conduct their dispatch expense services are committing violations
of antitrust laws.
Mr. MacPherson said the fact is pilot organizations do form
together to lower prices for the consumer; they do this to become
more efficient.
In his closing comments, Mr. MacPherson again stressed the
importance of regional representation on the board.
TAPE 95-37, SIDE B
Number 020
PETER GARAY, Alaska Marine Pilots, Region 3, stated support for the
change in Section 2, which changes judicial district to regional
representation on the pilot board.
Mr. Garay said if the choice is fixed tariff versus maximum tariff,
his group would support the fixed tariff, as they do not believe it
is in the state's best interest for the mandatory service of
piloting to be left to the market forces.
Number 050
BOB EVANS, Alaska Marine Pilots Association, Anchorage, said he had
been in consultation with Mark Ashburn who was formerly the head of
the antitrust section in the Attorney General's Office and Mr.
Ashburn believes that the language contained in paragraph (8) of
Section 12, read in conjunction with the provision which says the
pilot organization may enter into an agreement, that those two
provisions alone provide at least as much protection as a maximum
tariff.
Mr. Evans also spoke in favor of a fixed tariff.
Number 090
SENATOR HOFFMAN moved the adoption of the following amendment to
CSSB 130(RES):
Amendment No. 1
Page 7, line 18: After "west" insert "or north"
Page 7, line 19: Delete ", Hawaii, and British Columbia, Canada"
and insert "and" [,] Hawaii, and including British Columbia, Yuko
Territory, and Northwest Territories, Canada"
Page 7: Delete lines 20 - 23 and insert it its place:
"(5) vessels of Canada, built in Canada and manned by
Canadian citizens [INCLUDING CANADIAN CRUISE SHIPS], engaged in
frequent trade between
(A) British Columbia and Southeastern Alaska south of 58
degrees, 10 minutes North latitude, if reciprocal exemptions are
granted by Canada to vessels owned by the State of Alaska and those
of United States registry; or
B northern Alaska north of 68 degrees, 7 minutes North
latitude and Yukon Territory or Northwest Territories; [AND]"
Number 110
ALAN WALKER, representing Northern Transportation, a Canadian
corporation, speaking to the amendment, explained the corporation
for the last two seasons has been delivering products to several
North Slope villages. Under the present statutes, U.S. tugs and
barges are exempted from pilotage requirements, but Northern
Transportation, being a Canadian company, is not allowed under that
exemption to operate without a pilot. The amendment would level
that playing field from a competitive standpoint so that the
regulations would not be inhibiting foreign commerce.
Number 130
Hearing no objection, the amendment was adopted.
Number 140
There being no further amendments or discussion on the committee
substitute, SENATOR PEARCE said it was her intent to move the
legislation out of the subcommittee and that it would be back
before the full committee the following week.
SENATOR HALFORD moved that CSSB 130(RES) be moved out of the
subcommittee to the full Resources Committee. Hearing no
objection, the motion carried.
There being no further business to come before the committee, the
meeting was adjourned at 5:12 p.m.
| Document Name | Date/Time | Subjects |
|---|