Legislature(1993 - 1994)

04/01/1993 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 237 MARINE PILOT LICENSING AND TARIFFS                                    
  Number 534                                                                   
  JOE KYLE, ALASKA STEAMSHIP ASSOCIATION, made the following                   
       - The industry supported the 1991 35% increase in                       
       - The industry supports the concept of two or more                      
  healthy pilot organizations.                                                 
       - The industry opposes efforts to place limits on the                   
  number of licensed pilots.                                                   
       - The Alaska Steamship Association believes that the                    
  present rigid entry level requirements is in itself enough                   
  to limit the number of licenses issued.                                      
       - Once the license is issued, there are strict follow-                  
  up requirements, which has a downward effect on the number                   
  of licensed pilots.                                                          
       - Regardless of the intent of limiting pilots, its                      
  effect is to increase the income of those licensed.                          
       - The industry is proud of what they pay pilots.                        
       - The Alaska Steamship Association supports removing                    
  the tariff setting process from the Board of Marine Pilots,                  
  but they are not prepared at this time to support the move                   
  to have the APUC (Alaska Public Utilities Commission) take                   
  over these functions until more information is known.                        
       - The Alaska Steamship Association has a philosophical                  
  problem with aspects of a fixed tariff versus a maximum                      
  tariff.  The current tariff process where industry and                       
  pilots negotiate is fine.                                                    
       - Alaska Steamship is concerned about the language in                   
  the bill which purports to make equipment a part of the                      
  tariff.  Equipment is not currently in the tariff, and                       
  industry is concerned that this would open the door for                      
  pilots to get into other businesses in the marine                            
       - Alaska Steamship also objects to the language in the                  
  bill that calls for inflation proofing.  A pilots income is                  
  already high and at those levels there is no need for                        
  inflation proofing.                                                          
       - Alaska Steamship intends to submit an amendment to                    
  the bill in the near future.                                                 
  (Please note that there is no TAPE 93-32, SIDE B)                            
  TAPE 93-33, SIDE A                                                           
  Number 005                                                                   
  CHAIRMAN HUDSON commented that inflation proofing is common                  
  when establishing tariffs.  Chairman Hudson requested that                   
  Mr. Kyle provide more information regarding equipment in the                 
  bill to his staff for further work.                                          
  Number 015                                                                   
  CHAIRMAN HUDSON emphasized that what is considered a region                  
  in the Lower 48 usually refers to a major port.  But in                      
  Alaska it can be several small ports over a vast segment of                  
  coastline.  Chairman Hudson pointed out that it is his                       
  belief that regional knowledge is very important in Alaska.                  
  Number 030                                                                   
  CHAIRMAN HUDSON stated it was not his intention to halt a                    
  pilot moving between regions, but he wanted safety to be the                 
  first priority.                                                              
  Number 050                                                                   
  MR. KYLE added that his group purposely did not address the                  
  cross-regionalization in HB 237.                                             
  Number 065                                                                   
  DAVID MILLEN, ALASKA MARINE PILOTS, testified in support of                  
  HB 237 and outlined his groups position:                                     
       - The only purpose of piloting act is public safety.                    
       - The Act ensures safety of shipping.                                   
       - The 1991 amendments to the pilotage act were good but                 
  failed to create an unrestricted free market enterprize                      
  system on marine pilotage.                                                   
       - Competition does not exist in pilotage because there                  
  is not a large pool of buyers and sellers.                                   
       - Unrestricted free market pilotage puts pressure on                    
  pilots economically to cut corners on safety because they                    
  are competing for a limited amount of income.                                
       - Fixed tariffs have broad public policy benefits.                      
  When statutes impose compulsory pilotage, this bill would                    
  require that all pilots would be treated equally.  In                        
  addition, fixed tariffs would allow the state to continue                    
  the policy developed historically of permitting the high                     
  revenue ports to subsidize and keep the costs down for the                   
  less busy ports.  If there are not fixed tariffs and the                     
  tariffs are set on a purely competitive basis, the costs                     
  would be prohibited and not in the best interest of                          
       - The perception that pilots make high salaries is                      
  somewhat misleading.  The average income is $100,000 minus                   
  taxes, insurance, licensing fees, etc.                                       
       - Alaska Public Utilities Commission has resources to                   
  set fixed tariffs in a fair manner.                                          
       - The only way to make a fixed tariff work is to set                    
  the number of pilots licensed.                                               
  Number 312                                                                   
  WILL ANDERSON, ALASKA MARINE PILOTS, testified in support of                 
  HB 237.  He said HB 237 would create and maintain a system                   
  that puts safety first.  Mr. Anderson echoed Mr. Millin's                    
  Number 368                                                                   
  testified in opposition to HB 237.  Mr. Bennett stated that                  
  his group did not ask that this bill be introduced, and as                   
  far as he knew, neither did the industry.                                    
  MR. BENNETT stated that HB 237 says that setting fixed                       
  tariff's will allow industry a longer view of the tariff                     
  situation, but also allows for the tariff's to be amended at                 
  any time.  Mr. Bennett stated this is already the case                       
  because his group's contracts contain a clause referring to                  
  annual adjustment, patterned after those seen in union                       
  collective bargaining agreements.                                            
  With respect to "uniformity of tariffs," MR. BENNETT                         
  directed the committee's attention to the state's                            
  requirement that pilot groups publish their tariffs and                      
  maintain them for at least a year.                                           
  MR. BENNETT stated he believes that his group has done                       
  nothing unfair in its bargaining with industry and that                      
  SEAPA (Southeast Alaska Pilots Association) made bad                         
  business decisions last year and they want the legislature                   
  to make it up for them.                                                      
  MR. BENNETT suggested that if the legislature puts in play a                 
  mechanism for a fixed tariff, it will destabalize a                          
  bargaining procedure that all participants have haggled over                 
  for almost two years.                                                        
  MR. BENNETT said there was no need for a limitation on the                   
  number of licensed pilots.  State licensure is already self-                 
  limiting due to the great difficulty in gaining entry into                   
  the profession brought about by the 1991 legislation.  There                 
  is an element of unpredictability in the attrition rate of                   
  pilots due to age, illness or death.  He reminded the                        
  committee that, as they know, fog in Sitka or Juneau can                     
  result in air traffic delays in the summer when as many as                   
  half of Southeast's marine pilots may be in transit.                         
  MR. BENNETT added that limited entry is discriminatory,                      
  unfair, and un-American.                                                     
  MR. BENNETT suggested that limited cross-regional licensing                  
  would greatly benefit safety of pilotage in Alaska,                          
  particularly in Prince William Sound from the sea to Valdez.                 
  (Mr. Bennett's complete statement is on file in the                          
  committee office.)                                                           
  Number 500                                                                   
  in support of HB 237.  Mr. Luck stated that his division is                  
  in the process of auditing all pilotage reports in Southeast                 
  to attempt to clarify the picture for the committee.  Mr.                    
  Luck stated that the report will attempt to be as accurate                   
  as possible, but the reporting procedures are not consistent                 
  and the job is not an easy one.  The report should be                        
  available to the committee by Tuesday, April 6, 1993.                        
  MR. LUCK stated that the trend is that there was plenty of                   
  work for SEAPA during that period.  Mr. Luck added that the                  
  numbers that Mr. Bennett provided are in the ball park.                      
  No action was taken on HB 237.  It was held over for a                       
  future date.                                                                 

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