Legislature(2019 - 2020)ADAMS ROOM 519

05/07/2019 01:30 PM FINANCE

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Heard & Held
Heard & Held
SENATE BILL NO. 29                                                                                                            
     "An Act extending the termination date of the Board of                                                                     
   Marine Pilots; and providing for an effective date."                                                                         
1:30:52 PM                                                                                                                    
DAVID SCOTT,  STAFF, SENATOR BERT STEDMAN,  had finished his                                                                    
presentation  during an  earlier meeting  [May 7,  2019 9:00                                                                    
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE  AUDIT,  reviewed  the audit  findings  for  the                                                                    
Board of  Marine Pilots. The  audit recommended  the maximum                                                                    
eight-year extension.  She referenced  the audit  report [A                                                                     
Sunset Review of the Department  of Commerce, Community, and                                                                    
Economic Development, Board of  Marine Pilots (board)  April                                                                    
20, 2018  Audit Control Number 08-20112-18]  dated April 20,                                                                    
2018  (copy  on file).  She  read  sections from  the  audit                                                                    
     The audit  concludes the board is  serving the public's                                                                    
     interest  by effectively  licensing  marine pilots  and                                                                    
     deputy  marine   pilots  and  approving   trainees  and                                                                    
     apprentices.   Board   meetings   were   conducted   in                                                                    
     compliance  with  laws, investigations  were  processed                                                                    
     timely, and  the board actively changed  regulations to                                                                    
    improve the industry and better protect the public.                                                                         
Ms.  Curtis  turned to  licensing  activity  displayed on  a                                                                    
table  titled  Exhibit  2   on  page 12  of  the audit.  She                                                                    
reported that  the total  number of  licenses as  of January                                                                    
31, 2018  was 103. She moved  to a table titled  "Exhibit 4                                                                     
on page  14 of  the audit showing  the Schedule  of Revenues                                                                    
and  Expenditures,  FY  14  through   March  31,  2018.  She                                                                    
indicated that the board had  a surplus balance of over $229                                                                    
thousand. She added that the  board fees were listed on page                                                                    
Ms. Curtis continued with the  recommendations on page 15 of                                                                    
the report. She read the following:                                                                                             
     Recommendation 1:                                                                                                          
     The Board  of Marine  Pilots (board) should  ensure all                                                                    
     applicable  documents   are  aboard   foreign  pleasure                                                                    
    crafts in accordance with regulatory requirements.                                                                          
     Specifically, 12  AAC 56.115 requires an  operator of a                                                                    
     pleasure  craft applying  for a  pilotage exemption  to                                                                    
     ensure the pleasure craft has  aboard documents such as                                                                    
     nautical  charts,  current   tidal  tables,  and  other                                                                    
     guides. Auditors  found five of the  seven applications                                                                    
     indicated  that  required  documents were  not  on  the                                                                    
     According to  the MPC, the  operators can  obtain these                                                                    
     documents at  port or electronically  while at  sea. It                                                                    
     has been  standard procedure for  the board  to approve                                                                    
     the   exemptions  with   the  understanding   that  the                                                                    
     applicant will  follow through and obtain  the required                                                                    
     documents later.  The board did  not consider  the need                                                                    
     for or importance of verifying  that the documents were                                                                    
     actually  obtained.  Additionally, the  exemption  does                                                                    
     not  include a  stipulation that  the applicant  obtain                                                                    
     the   required   documents   prior  to   entering   the                                                                    
     applicable   area.  Issuing   foreign  pleasure   craft                                                                    
     exemptions  without  verifying required  documents  are                                                                    
     aboard the vessel increases the risk to public safety.                                                                     
Ms. Curtis  moved to  Recommendation 2 on  page 16  and read                                                                    
the following:                                                                                                                  
     Th e  board should ensure the  Southeast Alaska Pilots'                                                                    
     Association improves procedures for tracking drug test                                                                     
     In  a  sample  of  nine   drug  test  donors  from  the                                                                    
     Southeast Alaska  Pilots' Association, the  audit found                                                                    
     three  donors5 notified  by mail  were  not tracked  by                                                                    
     date and  recipient. Therefore,  the timeliness  of the                                                                    
     drug tests could not be confirmed.                                                                                         
     The Southeast  Alaska Pilots'  Association relied  on a                                                                    
     third party  contractor to notify selected  donors that                                                                    
     were out-of-state  or out-of-town. The  association was                                                                    
     not aware  the mail  notifications were  not adequately                                                                    
     tracked. Drug test requirements  under 46 CFR 16.230(h)                                                                    
     specify that  each marine employer shall  ensure random                                                                    
     drug tests  are unannounced. Inadequate  procedures for                                                                    
     tracking drug  test notifications limit the  ability to                                                                    
     verify timeliness  of drug tests and  increase the risk                                                                    
     to public safety.                                                                                                          
     We  recommend the  board  ensure  the Southeast  Alaska                                                                    
     Pilots'  Association improves  procedures for  tracking                                                                    
     drug test notifications.                                                                                                   
Ms. Curtis  noted that the  responses to the audit  began on                                                                    
page  25, from  both the  Department of  Commerce, Community                                                                    
and Economic Development (DCCED)  and board and relayed that                                                                    
both  agreed with  the recommendations.  She added  that the                                                                    
boards   chair at  the  time was  also  the commissioner  of                                                                    
DCCED [Mike Navarre].                                                                                                           
1:34:50 PM                                                                                                                    
Co-Chair Wilson OPENED and CLOSED public testimony.                                                                             
Co-Chair Wilson  asked to  hear from  the department  on the                                                                    
fiscal note.                                                                                                                    
CHARLES   WARD,  MARINE   PILOT  COORDINATOR,   DIVISION  OF                                                                    
CORPORATIONS,    BUSINESS   AND    PROFESSIONAL   LICENSING,                                                                    
DEPARTMENT OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,                                                                    
was available for questions.                                                                                                    
Co-Chair Wilson  discussed a  fiscal note  attachment titled                                                                    
 Board   of  Marine   Pilots   Schedule   of  Revenues   and                                                                    
Expenditures   (copy  on  file)that   was  included  in  the                                                                    
members   packets that  contained the  boards  expenses  and                                                                    
1:36:14 PM                                                                                                                    
AT EASE                                                                                                                         
1:37:20 PM                                                                                                                    
Co-Chair Wilson noted that the  fiscal note reported the use                                                                    
of  Designated General  Funds (DGF)  only,  which meant  the                                                                    
boards expenses were paid by licensing fee receipts.                                                                            
Representative  Knopp referenced  hearing concern  expressed                                                                    
by the  marine pilots over the  size of one the  new largest                                                                    
cruise ships maneuvering in high  winds. He wondered how the                                                                    
issue was  addressed. Mr.  Ward answered  that the  topic of                                                                    
VLS (Very  Large Cruise Ships)  had been discussed  at board                                                                    
meetings for  the past year.  He relayed that the  board was                                                                    
aware  of the  navigational concerns  raised. The  Southeast                                                                    
Alaska Pilots  Association would  be piloting the  ships and                                                                    
had been  working with the  cruise agencies on how  to bring                                                                    
ships  into   ports.  The  entities  were   developing  best                                                                    
practices with the  ship captains and Coast Guard  on how to                                                                    
navigate the ships safely into  Southeast Alaska and Alaskan                                                                    
waters.  Representative  Knopp  inquired whether  the  ships                                                                    
would be allowed  to dock if any  uncertainties remained due                                                                    
to  high winds.  Mr. Ward  answered in  the affirmative.  He                                                                    
indicated  that  the  pilot and  the  ships   captain  would                                                                    
confer  on a  navigation  plan. If  conditions prohibited  a                                                                    
safe approach, a safe port would be found for docking.                                                                          
1:40:17 PM                                                                                                                    
Vice-Chair Ortiz  interjected that  there was  a recognition                                                                    
amongst  the   pilot  association  that  larger   tugs  were                                                                    
necessary to provide  service to the VLS  coming into ports.                                                                    
The larger  tugs meant  a larger  investment in  the support                                                                    
infrastructure.  The  discussions   were  ongoing  with  the                                                                    
pilots,  cruise lines,  and  local  communities. He  offered                                                                    
that  the  local  communities  had   a  vested  interest  in                                                                    
assuring that  the expensive port facilities  were protected                                                                    
in high  wind situations.  The issues  regarding VLS  were a                                                                    
significant concern.                                                                                                            
Representative Merrick  looked at  the fiscal  note analysis                                                                    
and  noted  that  total  revenue  collected  from  the  fees                                                                    
equated to  the regulatory costs.  She cited a  balance from                                                                    
the  scheduled revenues  and expenditures  of close  to $300                                                                    
thousand. She wondered whether there  was something else the                                                                    
money was  used for.  She noted that  the pilot's  fees were                                                                    
$2.5 thousand each year. She  thought that the fees were too                                                                    
high. Mr.  Ward answered  that the  board had  a significant                                                                    
fee  reduction  in  2018.  The  new  pilots   fee  was  $1.5                                                                    
thousand and agent fees were  reduced from $1 thousand to $5                                                                    
hundred  and test  and application  fees  were reduced.  The                                                                    
board and  division were  aware of  the healthy  surplus and                                                                    
was engaged in  lowering fees and using some  of the surplus                                                                    
to offset  any other board  costs that arose. He  noted that                                                                    
investigations were  costly, and the board  wanted a reserve                                                                    
to  cover the  costs in  the  event of  an investigation.  A                                                                    
costly  investigation with  a small  board membership  could                                                                    
quickly  increase  licensing  fees  and  the  reserve  would                                                                    
offset the situation.                                                                                                           
Co-Chair Wilson  asked if  the money  could be  utilized for                                                                    
anything other  than what  the board  was authorized  to do.                                                                    
Mr. Ward replied in the negative.                                                                                               
Co-Chair Wilson  set an  amendment deadline  of 9:00  am the                                                                    
following day.                                                                                                                  
SB  29  was   HEARD  and  HELD  in   committee  for  further                                                                    

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