Legislature(1993 - 1994)
03/30/1993 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
Number 567 HB 237 - MARINE PILOT LICENSING AND TARIFFS CHAIRMAN BILL HUDSON, PRIME SPONSOR of HB 237, read the sponsor statement. He explained that HB 237 was introduced to fine-tune Alaska's Marine Pilot Act of 1991, and to provide a mechanism to determine pilotage tariffs, now left to the several pilot organizations by statutory provision, and scheduled to be repealed on June 30, 1994. CHAIRMAN HUDSON further stated that while the 1991 Act improved marine pilotage in Alaska, its implementation has revealed that many problems still need to be addressed, specifically with regard to the powers of the Board of Marine Pilots and tariff setting. HB 237 seeks to remedy these problems by: 1) better defining the powers of the Board of Marine Pilots to make it more effective; and 2) charging the APUC with the authority to set tariffs. Number 619 COMMISSIONER PAUL FUHS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, testified in support of the work put into HB 237 and emphasized the importance of HB 237. Commissioner Fuhs pointed out that 95 percent of Alaska's resources move over the water. COMMISSIONER FUHS stated that Alaska has four regions in the state, two of which have competing piloting organizations and two that don't. TAPE 93-28, SIDE A Number 001 COMMISSIONER FUHS explained that a lot of the issues the committee will deal with are safety and efficiency; some of the most contentious issues are purely money. Commissioner Fuhs explained that the department called for a meeting last month with the various aspects of the pilotage industry and pilot groups to get people talking and air their concerns. Number 020 COMMISSIONER FUHS reiterated the importance of moving some of the decision making to the Alaska Public Utilities Commission (APUC) and suggested that the APUC be charged with the responsibility of setting the number of pilots allowed to operate in the state. COMMISSIONER FUHS commented that he did not know of any other industry where the same words were used to mean the exact opposite, and he expressed his hope that the committee would look and listen carefully to all sides of the issues. Number 072 REP. WILLIAMS asked what the outcome was of the meeting Mr. Fuhs mentioned. MR. FUHS explained that they were still working on getting the parties together in some sort of agreeable fashion. REP. WILLIAMS stated that he was of the opinion that the people involved in the issues come together instead of looking to the legislature to solve everything. Number 115 CHAIRMAN HUDSON commented that he and his staff have met with all sides of every issue and have come to the conclusion that it would be impossible to please everyone on every issue. CHAIRMAN HUDSON pointed out that his major concerns were: - safety of the movement of ships in Alaskan waters; - qualifications of the pilots; _ making certain that the pilots are separated from the shipping companies, so that there can be no undue influence put on the pilots; and - uniform fees for taking a ship from point A to point B. COMMISSIONER FUHS added another concern that the costs of pilotage not be so high that it be a deterrent to commerce, and that the number of pilots be so great that pilots can't make a living. Number 169 DON SCHROER, CHAIRMAN, ALASKA PUBLIC UTILITIES COMMISSION (APUC), testified that the commission does not have a position on HB 237 yet. He said a public meeting would be scheduled in the near future to develop a commission position and fiscal note for HB 237. Mr. Schroer asked for a deferment until the commission has time to evaluate the costs involved in taking on this added responsibility. Number 199 CARL LUCK, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, testified that under current law there are provisions for competition within regions as well as across regions. He stated that there is an unlimited number of pilots; the board is balanced between the pilot industry and the public; the board sets maximum tariffs; and then the pilot organizations negotiate with industry. He further noted that the board disciplines pilots, approves pilot organizations, sets training programs, licenses pilots, upgrades pilots, tests pilots, and creates piloting regions. He said pilots are independent contractors, prohibited from being employees, and have to carry insurance. MR. LUCK stated that HB 237 would limit the number of pilots, and most states already do that. MR. LUCK added that he hoped the following issues would be addressed by this legislature: - safety on Alaskan waters; - licensed pilots for cross regions; - equitable tariffs set by unbiased entity; and - pilot dispatching. MR. LUCK detailed some of the requirements to become a licensed pilot in this state. CHAIRMAN HUDSON noted that HB 237 does not address the pilot dispatch issue. Number 601 REP. PORTER asked, If the Alaska Public Utilities Commission were to limit the number of pilots, would it pose a problem to the free movement of commerce? MR. LUCK explained that the pilotage act does not make the free movement of commerce a determining factor; safety is the only concern. REP. PORTER added that setting the maximum too low would curtail movement on the waters. Number 623 MR. LUCK stated that the formula used to set limits, both minimum and maximum, would have to provide for retirement, sickness, vacations, etc. Mr. Luck further stated that he believed this could be done with a considerable amount of input and time. TAPE 93-28, SIDE B Number 001 CHAIRMAN HUDSON stated that he had no problem with amending the bill to include a statement regarding the free movement of trade. MR. LUCK stated that currently the state regulates the pilots and not the industry, but he envisioned industry having to come to the table in the future with at least some quantative analysis of how this affects the bottom line. REP. WILLIAMS inquired about the numbers Mr. Luck cited on when and how often pilots work. MR. LUCK asked that the pilots answer for themselves. Number 060 PETER LIE-NIELSEN, ALASKA COASTWISE PILOTS, testified that his group was against setting a maximum number of pilots. Mr. Lie-Nielsen also noted that there are a large number of pilots over the age of 65 that will be retiring shortly. MR. LIE-NIELSEN added that in 1992 not one new pilot was licensed partly due to a strict licensing procedure. Mr. Lie-Nielsen stated that the U.S. Coast Guard relaxed its restrictions on pilotage, resulting in the Exxon Valdez disaster. MR. LIE-NIELSEN noted that there are numerous examples of vessels in compulsory waters moving without pilots because of the nonavailability of licensed pilots. Number 212 REP. SITTON inquired how much insurance and license fees were. Number 224 MR. LIE-NIELSEN stated that the insurance runs about $3,000.00 per year and the license fees are about $1,000.00 per year. Number 230 CHAIRMAN HUDSON asked Mr. Lie-Nielsen why he believed the state would end up with too few pilots under this proposed legislation. Number 244 MR. LIE-NIELSEN answered that vessels do move on the water without pilots illegally, and restricting the number of pilots does a disservice to the concept of safety on the water. Number 280 CHAIRMAN HUDSON reiterated that it was his belief that a formula could be devised that would take into account the concerns mentioned above and would satisfy the needs of the industry. Number 305 REP. WILLIAMS expressed concern with putting a cap on the number of pilots. MR. LIE-NIELSEN agreed that this was a concern and that safety should come first. Number 388 BERNIE SMITH, representing TESORO PETROLEUM AND ALASKA STEAMSHIPS, testified that HB 237 had some good points, but it needed more work, and he would like to see it held over the interim for further review. Number 425 MICHAEL SPENCE, ALASKA COASTWISE PILOTS ASSOCIATION, read a statement on behalf of his group opposing HB 237. Mr. Spence stated that his group was concerned about three elements of HB 237: 1) fixing tariffs; 2) fixing the number of pilots in a region; and 3) forbidding cross regional pilotage. Number 499 CHAIRMAN HUDSON asked Mr. Spence to be specific as to what parts of HB 237 Mr. Spence had problems with. Number 507 MR. SPENCE pointed out the following concerns: - HB 237 might create a shortage of pilots; - HB 237 prohibits cross region licensing; - giving authority to APUC would increase tariffs; and - HB 237 as written does not provide more safety. Number 569 MR. LUCK clarified the licensing fee structure as it stands now. Number 580 REP. MACKIE asked Mr. Spence where and how in this bill would his organization be adversely affected. Number 593 MR. SPENCE answered that it was his group's concern that the Board of Marine Pilots has been unfair in the past and that they couldn't make a fair and accurate assessment of what's needed. Number 610 REP. MACKIE asked that the persons limit their testimony to the legislation at hand and not air their feelings about alleged bias and "bad blood" from the past. Rep. Mackie said he was only interested in good public policy, not the in-fighting between the groups. TAPE 93-29, SIDE A Number 001 PHIL SWAN, SOUTHEAST ALASKA PILOTS ASSOCIATION, testified that his group supported HB 237. Mr. Swan believed that HB 237 would give the industry well-qualified pilots at a fair price and the state would benefit by retaining exclusive control over pilotage without any interference from industry. Number 078 REP. PORTER asked if HB 237 was the same as what's currently law on the west coast. MR. SWAN responded that HB 237 does bring Alaska law closer to what's being done on the West Coast. Number 122 REP. MACKIE asked if there was anything about HB 237 that was detrimental to Mr. Swan's group. MR. SWAN answered that his group had no concerns regarding the bill. CHAIRMAN HUDSON announced that he would hold HB 237 over and adjourned the meeting at 6:34 p.m.