Legislature(2003 - 2004)
02/20/2003 09:05 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
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MINUTES
SENATE FINANCE COMMITTEE
February 20, 2003
9:05 AM
TAPES
SFC-03 # 5, Side A
SFC 03 # 5, Side B
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:05 AM.
PRESENT
Senator Gary Wilken, Co-Chair
Senator Lyda Green, Co-Chair
Senator Con Bunde, Vice-Chair
Senator Ben Stevens
Senator Lyman Hoffman
Senator Donny Olson
Also Attending: ZACH WARWICK, Staff to Senator Gene Therriault; PAT
DAVIDSON, Legislative Auditor, Legislative Finance Division,
Legislative Affairs Agency; CAPTAIN ROBERT WINTER, Southeast Alaska
Pilots' Association; JEFF BUSH, former Deputy Commissioner,
Department of Community and Economic Development, and Member and
current Chair of the Board of Marine Pilots; KATE TESAR,
Representative, Alaska Yacht Services and Provisioning; PETER
CHRISTENSEN, Marine Pilot Licensing Coordinator, Division of
Occupational Licensing, Department of Community and Economic
Development; PAUL FUHS, Representative, Southwest Alaska Pilots
Association
Attending via Teleconference: From Offnet Sites: DAVID SOKOL; DOUG
GREASON, Delta Marine
SUMMARY INFORMATION
SB 20-EXTEND BOARD OF MARINE PILOTS
The Committee heard testimony from the bill's sponsor, the
Department of Community and Economic Development and took public
testimony. The bill was held in Committee.
SENATE BILL NO. 20
"An Act extending the termination date of the Board of Marine
Pilots; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
ZACH WARWICK, Staff to Senator Gene Therriault, informed the
Committee that this legislation would extend the termination date
of the Board of Marine Pilots to June 30, 2007. He noted that,
while the Division of Legislative Audit report [copy on file] dated
November 1, 2002, supports this extension, the report recommends a
review be conducted regarding the current regulation that requires
foreign-flagged ships exceeding 300 gross tons to hire marine
pilots. In addition, he continued, the report recommends that the
marine pilot exemption for Canadian naval ships be further
clarified. He noted that the Senate Labor and Commerce Committee
(SL&C) considered the recommendations, and reported the bill from
committee as presented with the determination that the
recommendations should be addressed in separate legislation.
Senator Hoffman asked whether the SL&C committee addressed all four
of the Audit recommendations.
Mr. Warwick responded in the affirmative. He reported that the drug
testing recommendation has been discussed with the marine pilots
associations.
Co-Chair Wilken specified that the Division of Legislative Audit's
determinations on the drug testing issue, the Canadian warships
issue, and the 300 gross weight tonnage issue would be addressed
separately.
PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit,
testified to the four recommendations as follows.
Recommendation No. 1
The Board of Marine Pilots (BMP) should take action to ensure
regional pilot associations administer mandatory random drug
testing programs in a manner consistent with established
regulatory standards.
Ms. Davidson communicated that Recommendation No. 1 addresses the
need for adequate drug testing follow-up on missed drug testing as
well as further clarification regarding the number of pilots being
tested. She explained that under authority granted in State
statute, the Board of Marine Pilots adopted federal regulations
that require 50 percent of licensed marine pilots be tested. She
continued that the federal regulations further provide for the
establishment of professional associations within larger
consortiums to increase efficiency in the process, and that the
consortiums have drug-testing authority. However, she informed, the
audit determined that one of the professional associations within a
consortium, did not meet the 50 percent marine pilot drug test
sampling requirement. She asserted that the 50 percent mandate, as
adopted by the Board, must be adhered to. She noted that while the
Department did not agree with the audit's interpretation of the
testing sampling requirements, further discussion established that
more exact guidelines must be supplied to the consortiums to ensure
that the samplings meet the requirements.
Recommendation No. 2
The BMP should establish more informative and comprehensive
reporting requirements so the Marine Pilot Coordinator (MPC)
can confirm that an appropriate number of licensed pilots are
consistently being subjected to random testing.
Ms. Davidson stated that Recommendation No. 2 specifies that the
total number of marine pilots subject to the drug testing
requirement, the number tested, and the results of those tests
should be reported to the Department's Marine Pilot Coordinator.
She specified that it is the responsibility of the Board to address
those individuals failing the test.
Recommendation No. 3
The legislature should consider amending current statutes in
order to extend mandatory drug and alcohol testing to pilot
organization trainees and apprentices.
Ms. Davidson communicated that the third recommendation calls upon
the Legislature to determine whether the existing statutes should
be modified, specifically as the current regulations address drug
testing for licensed pilots but not for trainees or apprentices.
Recommendation No. 4
The Board of Marine Pilots should seek statutory authority to
allow the board the discretion to grant waivers of pilotage
requirements to large pleasure crafts.
Ms. Davidson continued that the fourth recommendation suggests that
the Legislature should consider statutory changes to allow the
Board to grant marine pilot exemptions for specified vessels. She
voiced the concern "that economic activity is either being diverted
from the State" or vessels are traveling in the State but not
complying with existing regulations. She asserted that "there does
not appear to be any enforcement activity and it is difficult to
have laws on the books" when no one is enforcing them.
Senator Bunde announced that no marine pilot has failed a drug
test.
Ms. Davidson affirmed that the audit revealed no problem with
marine pilots failing drug tests.
Senator Hoffman asked whether the number of licensed marine pilots
is sufficient to service all pleasure crafts, were the marine
pilotage regulation enforced.
Ms. Davidson responded that this issue was not addressed in the
audit. She noted that, due to insufficient data, it is difficult to
determine the potential number of vessels that might require an
onboard marine pilot. She stated that Appendix B on page 35 of the
audit report depicts the extent of the audit's questioning on this
issue.
Appendix B
Department of Community and Economic Development
Board of Marine Pilots
Survey Results
Question 4: Do you think that the licensing requirements are
sufficient to ensure a competent pool of marine pilots?
Response Marine Pilots
Yes 89 %
No 11 %
Co-Chair Wilken directed Ms. Davidson to attend any Committee
hearing involving a Division of Legislative Audit report.
Ms. Davidson concurred.
Co-chair Wilken commented that, were modifications to the current
regulations considered, the on-going issue regarding whether or not
Canadian warships should have a licensed marine pilot onboard
should be addressed.
Co-Chair Wilken asked Captain Winter to explain the relationship
between United States and Canadian warships as well as US Coast
Guard and Canadian Naval warships.
CAPTAIN ROBERT WINTER, Representative, Southeast Alaska Pilots'
Association, declared that the US Navy supports an exemption of all
"friendly naval warships" from the marine pilot requirement;
however, he announced, the Southeast Alaska Pilots' Association
(SEAPA) does not support a blanket exemption because of language
barriers and other safety concerns. He expressed that SEAPA would
support an exemption for Canadian naval vessels homeported in
British Columbia which are familiar with Alaskan waters.
Co-chair Wilken clarified that extending waivers to Canadian naval
vessels based in British Columbia would be acceptable to SEAPA.
Captain Winter concurred and voiced that regulations currently
provide this exemption. He furthered that "there is a reciprocal
agreement" between the United States and Canada that allows, for
instance, a US Coast Guard vessel from Alaska to transverse the
inside waters of British Columbia provided there is a minimum of
two navigational officers onboard who have "a two-trip" experience
in those waters. However, he declared, Canadian naval vessels
routinely request a marine pilot be on board.
Senator Bunde asked how a Canadian officer would acquire the
necessary training to operate in Alaska waters.
Captain Winter replied that Canadian officers could accomplish the
required training by serving on ships transversing Alaskan waters.
However, he clarified, SEAPA would support a waiver for British
Columbia based naval vessels without this documentation.
JEFF BUSH, former Deputy Commissioner, Department of Community and
Economic Development, and Member and recent Chair, Board of Marine
Pilots testified in support of the BMP extension. He applauded the
findings of the audit and urged the Legislature to address the
issues raised in the report, specifically the exemption for
Canadian naval vessels and the waiver for yachts. He voiced that
the Board and the consortiums have discussed the drug testing of 50
percent of marine pilots regulation, and he noted that he is
"comfortable" with the progress being made.
Mr. Bush advised that the requirement specifying that vessels
exceeding 300 tons must have a marine pilot onboard was enacted in
1995 in response to safety concerns regarding a "quite large"
Greenpeace vessel, the Rainbow Warrior, which was operating in
Alaskan waters without a marine pilot. He opined that, "that one
bad situation" spawned legislation "that created more problems than
we needed." He commented that it costs up to $3,000 a day to have a
marine pilot on board, and he asserted, this expense in conjunction
with the discomfort of having "a stranger live onboard" a private
vessel deters large yachts from visiting the State and negatively
affects the State's economy. He voiced that, "it would be
appropriate to address this situation and find a way" to allow
these vessels to come to Alaska.
Mr. Bush expressed support for a marine pilot waiver fee being
implemented. He communicated that, due to the expense of operating
the small Division of Occupational Licensing program, two-year
marine pilot licenses cost approximately $2,500, and he suggested
that $500 would be "a reasonable" waiver fee. He stated that this
fee would "alleviate" the expense of the marine pilot license fee
and set a precedent for other states. He specified that this fee
level would be acceptable to marine pilots.
KATE TESAR, Representative, Alaska Yacht Services and Provisioning,
reviewed her professional experience with marine pilot operations
and the yachting and cruise ship industries. She informed that she
was involved in the "major rewrites" of the Marine Pilot Act of
1991 and 1995, and she spoke in favor of extending the termination
date of the Board. She informed the Committee that Alaska Yacht
Services and Provisioning has determined that the marine pilot
requirement as it applies to foreign-flagged yachts exceeding 300
gross tonnage, is "an impediment" to business. She urged the
Committee to modify this regulation, and she echoed earlier
testimony that this law, while mandated on the books, "is
unenforceable" and is an economic obstruction because vessels are
choosing not to visit Alaska.
Ms. Tesar informed the Committee that the 1991 revisions to the
Marine Pilot Act were the "direct result" of the Exxon Valdez
tanker oil spill "catastrophe," and that prior to the further
changes in the Act in 1995, all pleasure craft of domestic or
foreign registration were allowed to travel in Alaska without
marine pilots onboard. She stressed that this issue must be
reevaluated due to the changes in the industry and the unforeseen
growth in the number of large yachts being built. She voiced
concern about the negative economic impact resulting from the Act
and affirmed that the audit report recommendations are valid.
Ms. Tesar reviewed the State of Washington vessel waiver system and
noted its inclusion of a waiver application fee. She voiced that a
similar fee should be instituted in Alaska to offset the expense of
the marine pilot license fee. She furthered that, as part of the
waiver application process in Washington, the state evaluates the
"authority and expertise" of the vessel's captain. She voiced
support for this concept.
Ms. Tesar spoke to the difficulty experienced by pleasure craft
crew in coordinating yacht traffic in Alaska. She explained that a
vessel must contact the State's piloting associations twenty-four
hours in advance of arrival while large cruise ships schedule
approximately a year in advance to ensure that accommodations are
in place. She reviewed that each of the 430 cruise ships dockings
in Juneau in 2002 required a minimum of one, and more often two,
marine pilots on board. She expressed that the volume of ship
traffic in the summer months places a tremendous demand on marine
pilots.
Ms. Tesar voiced that safety concerns including such things as an
event occurring that could negatively affect the tourist industry
could be addressed by instituting an intelligence tracking system
for vessels traveling between the US and Canada. She stated that US
Customs, US Immigration and Nationalization Service (INS), the US
Coast Guard and other intelligence agencies are involved in
discussions regarding foreign flagged vessels in US waters. She
noted, however, that many vessels that are built and owned by
citizens of the United States are registered in a foreign country,
particularly Great Britain.
Ms. Tesar stated that US Customs requires that foreign flagged
vessels apply for a US cruising permit. She noted that local
intelligence gathering networks are comprised of such entities as
the local port authority, port service industries and local
businesses that watch for suspicious activity among vessels. She
stated that were a waiver system in place, it would provide further
intelligence regarding what ships are transversing Alaskan waters.
Ms. Tesar referred the Committee to the Marine Exchange of Alaska
information [copy on file] that is included in the members'
packets. She explained that this information provides additional
tracking system options such as the "Automated Secure Vessel
Tracking System" which uses satellite communication to report a
vessel's position.
Ms. Tesar asserted that an increase in yacht traffic in the State
could infuse "lots of new money" into the economy. She testified
that yachts spend approximately "30 percent over the cost of the
trip itself in communities" on such things as restaurants, port
fees and shopping. She stressed that due to the uncertainty of safe
travel in other foreign destinations, Alaska is a "premiere
destination" and action should be taken to encourage this traffic.
She pointed out the letters of support from tourism businesses in
support of the tonnage exemption. She stated that the State should
be addressing the recommendations in the Audit report as well as
determining "how to attract these desirable independent" vessels to
Alaskan waters in a safe navigational manner.
Senator Bunde observed that while foreign flagged vessels over 300
tons are required to have marine pilots aboard, similar sized US
flagged vessels are exempt from the requirement.
Ms. Tesar confirmed that any size private vessel registered in the
US is exempt from the marine pilot requirement.
Senator Bunde characterized the gross ton measurement system as
"archaic," and he suggested that, were the regulation revised,
consideration be given to include the language "length of vessel."
He warned that utilizing waiver fees to offset marine pilot license
fee should be further explored, as this language would entail
dedicated funds.
Senator Hoffman asked whether the number of licensed marine pilots
is sufficient to provide pilots for both cruise ships and pleasure
crafts.
Ms. Tesar voiced that "anecdotally" she has heard of problems with
the availability of a sufficient number of marine pilots, and she
spoke of a situation whereby a retired marine highway ferry captain
has had to refuse calls to pilot small vessels primarily because he
is not a member of a marine pilots association. She continued that
there are approximately 37 licensed marine pilots in Southeast
Alaska with approximately 13 more licenses to be issued within the
next few years. She deferred to yacht boat owners and the marine
pilot associations to better answer the question.
Senator Hoffman asked the fee level that would be required for a
marine pilot waiver.
Ms. Tesar responded that the waiver fee schedule for the State of
Washington, "WAC 363-116-360 Exempt vessels" [copy on file], is
included in the member's packets. She clarified that a fee schedule
for Alaska has not been established at this time.
DAVID SOKOL testified from an offnet site in Omaha Nebraska. He
communicated that the 38-foot, 350-ton private vessel he owns is
registered in England, was built in the United States, is
exclusively a pleasure craft, and is not for hire. He announced
that six of the seven-member crew, including both captains, are
American, and that one of the vessel's captains spent over three
years piloting in Alaskan waters, and he declared that all members
of the crew undergo random drug tests. He affirmed that tonnage
calculations could be interpreted a multitude of ways.
Co-chair Wilken interjected that letters from Mr. Sokol to various
members of the Alaska Legislature are included in the Members'
packets.
Mr. Sokol informed the Committee that even though he had previously
traveled in the State, he was unaware of the State's marine pilot
tonnage regulations. He continued that upon learning of the
requirement, he contacted the State's marine pilot coordinator who
referred him to the marine pilots associations to arrange for
pilots for the upcoming trip. He was informed that the rates would
range between $1,400 and $2,200 a day plus room, food and
transportation to and from the yacht. He stated that due to an
insufficient number of marine pilots being available during his
six-week trip timeframe, he was asked to consider changing the
dates of his trip. He was informed that another option would be to
alter his port of call plans in order to require a marine pilot
only when the vessel needed to be moved. He noted that he would be
required to pay for the pilot's transportation costs.
SFC 03 # 5, Side B 09:52 AM
Mr. Sokol stated that although he is familiar with marine pilot
regulations in other areas of the county, Canada, and Central
America, he "has never faced a situation" where a marine pilot was
required seven days a week on the vessel. He stated that, in
addition to the expense factor, supplying a marine pilot with a
stateroom would present a hardship because he would be required to
reduce the number of guests he could house. Consequently, he
stated, due to the cost, the inconvenience, and the moveability
restrictions placed on the vessel he opted to cruise to British
Columbia (BC) Canada, instead of Alaska. He noted that the vessel,
the crew, and the passengers infused approximately $300,000 into
the BC economy through purchases of fuel, food, fishing guide
services, reservations, and provisions. He mentioned that Canadian
officials granted a marine pilot exemption to his vessel within two
weeks of the application being submitted.
Mr. Sokol voiced support for marine safety measures, including
insurance requirements; however, he asked that a waiver system be
considered to exempt qualified vessels and crews from the marine
pilot requirement. He informed the Committee that although yacht
owners highly recommend travel to Alaska, and it is known that the
marine pilotage regulation is relatively unenforced, he asserted
that many yacht owners, including himself, would not risk
jeopardizing their vessel or their personal reputation, and would
therefore, he opined, decide not to visit the State.
Senator Bunde inquired whether yacht insurance rates might be
negatively affected by yachts, "either through ignorance or
ignoring the law requiring a marine pilot" incurring an accident in
the State.
Mr. Sokol believed that insurance rates would be negatively
affected, as, he attested, most insurance policies require a vessel
to be in compliance with the rules and regulations of an area.
Senator Bunde asked for clarification as to when a vessel is
required to have a marine pilot onboard.
Mr. Sokol understood that a marine pilot must be onboard a vessel
when "the anchor was up or we were away from dock." He commented
that the distance between communities in Southeast Alaska
"effectively" requires a pilot to be onboard 24 hours a day.
Senator Bunde asked that further clarification be supplied to the
Committee.
Co-chair Wilken thanked Mr. Sokol for testifying. He acknowledged
that the next testifier's company, Delta Marine, has also submitted
written testimony to the Legislature, which is included in the
Members' packets.
DOUG GREASON, Delta Marine, testified offnet from Seattle,
Washington and voiced agreement with Mr. Sokol's comments. Mr.
Greason expressed that yachts "are global vessels with global
owners," and as such could travel anywhere in the world. He
furthered that when negative issues arise about an area, these
vessels just go somewhere else. He asserted that his company relies
on refitting and building these global vessels, and that his
business is negatively impacted when these vessels do not travel in
the Northwest, including Alaska.
Mr. Greason professed that the use of "the archaic" 300 gross
tonnage measurement system is inappropriate for international
vessels. He clarified that, with the exception of the United
States, other countries utilize an "international" tonnage
measurement. He stated that the US Coast Guard issues licenses with
both US tonnage and international tonnage designations in
recognition of this fact. He urged the Committee to incorporate the
international tonnage definition into any proposed legislation.
PETER CHRISTENSEN, Marine Pilot Licensing Coordinator, Division of
Occupational Licensing, Department of Community and Economic
Development, explained that while some Canadian warships are
typically granted marine pilot exemptions, he asserted that the
State has "really stretched" the law. He read the exemption as
written in statute.
Co-Chair Wilken asked whether the Department could produce a draft
revision to address this issue.
Mr. Christensen replied in the affirmative.
Senator Bunde asked the Department to clarify under what
circumstances a Marine Pilot would be required to be onboard a
foreign owned vessel.
Mr. Christensen read the regulation and communicated that the Board
has determined that a vessel at anchor or tied to a dock would not
require a pilot.
Senator Olson asked whether Canada provides a similar exemption to
US naval ships traveling in Canadian waters.
Mr. Christensen responded that Canada reviews whether one of the
vessel's officers has, within the previous three or five years,
transversed BC waters and issues a determination. He stated that
Alaska requires two of the Canadian crew to have experience in
Alaskan waters.
Senator Bunde opined that any proposed language change should
specifically exempt Canadian warships rather than exempting all
"friendly" foreign vessels from the marine pilot requirement.
PAUL FUHS, Representative, Southwest Alaska Pilots' Association,
spoke in support of the extension of the Board of Marine Pilots. He
recounted occasions in which the Board was responsive to
Association members' concerns. He stated that "in addition to
providing safe pilotage of vessels in this time of increased
concerns about security, the marine pilots" serve as a first line
of defense because they are usually the first American citizen
onboard a foreign vessel. He continued that while the Association
does not object to exempting Canadian warships from the marine
pilot regulation; he noted that US warships historically request a
marine pilot be onboard their vessels when in Alaskan waters even
though it is not required.
Mr. Fuhs stated that the pilots associations are working with the
bill's sponsor to address the pilotage exemption waiver and other
security concerns in separate legislation. However, he voiced, the
State should retain the ability to make decisions regarding these
issues.
Senator Bunde questioned how unforeseen issues might be addressed
were a marine pilot waiver system in place.
Mr. Fuhs expressed that requiring the Board to be an active
participant in the waiver process as well as requiring a marine
pilot to board a vessel on its initial voyage to the State would
ensure that safeguards "would be in place, both for national
security issues" and to validate the competency of the crew and the
vessel.
Captain Winter testified that, in his professional opinion, the
Board of Marine Pilots conducts essential responsibilities. He
voiced support, on behalf of the marine pilots association, for the
bill as presented. He proclaimed that Alaska's Marine Pilotage Act
"serves the shippers, the cruise industry, and the public well." He
stated that the Act "is the envy of many other states" and that the
State's marine pilots "serve to protect the integrity" of the Act.
Captain Winter responded to questions that arose during other
committee hearings on this bill; specifically that the marine
pilots associations are addressing the drug-testing recommendations
outlined in the audit report and that the audit report did not
identify that drug testing is mandatory for anyone undertaking
marine pilot training or apprenticeship programs.
Co-Chair Wilken asked Ms. Davidson to provide a Division response
regarding the mandatory drug testing for trainees.
Captain Winter agreed with previous testimony that determining the
length of a vessel is easier than determining the tonnage weight of
a vessel. He voiced support for establishing 100 feet as the
maximum length of a foreign flagged vessel that could apply for a
marine pilot waiver as, he continued, the association is concerned
about navigational safety issues that could be presented by ships
exceeding that length. He stated that the association prefers the
word "waiver" rather than "exemption" to ensure that the Board
would be involved in the determination; and he asserted that the
association would continue to work with the Board on addressing
these concerns.
Senator Olson asked the accident rate of foreign flagged vessels in
the State.
Captain Winter responded that most accidents in the State have
involved vessels that are familiar with Alaska's waters; therefore,
he contended, there is concern regarding vessels that are
unfamiliar with the State's waters. He mentioned that small US
vessels that carry paying passengers are required to have a marine
pilot on board for the first three sailings into an area. He
specified that international tonnage is the preferred unit of
measurement.
Senator Olson asked, due to the occurrence of accidents, the
safeguards provided by requiring marine pilots to be onboard
vessels.
Captain Winter replied that he is unaware of a single yacht
accident occurring while a marine pilot was onboard. However, he
stated, not all accidents might be reported.
Senator Olson countered that an accident must be reported if an
insurance claim is made.
Co-Chair Wilken asked whether the simulator at the Alaska
Vocational and Technical Education Center (AVTEC) is beneficial in
pilotage training.
Captain Winter responded that it is a "small" Alaska resource.
However, he noted, new features could be added to the simulator to
expand its abilities to the point where it could be effectively
used for training.
Co-Chair Wilken surmised that the State might be required to invest
more funding into AVTEC.
Captain Winter replied that this would be beneficial.
Co-Chair Wilken inquired how many marine pilots have failed random
drug testing.
Captain Winter replied, none.
Senator Bunde voiced that the waiver issue should be addressed in
separate legislation.
Co-Chair Wilken affirmed that the issue would be addressed either
in this bill or in another bill.
Co-chair Wilken ordered the bill HELD in Committee.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 10:19 AM
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