SB 130 MARINE PILOTS  SENATOR LEMAN announced SB 130 to be up for consideration. SENATOR LEMAN announced an at ease from 5:10 p.m. - 5:15 p.m. JEFF BUSH, Deputy Commissioner, Department of Commerce and Economic Development, said he was a member of the Marine Pilots Board and supported SB 130 in its current form. He didn't have any recommended changes. He said their position on maximum tariffs is that they take no position on it. He thought there might be some anti-trust concerns if there is no maximum tariff, but he had meant with the association's attorneys and they felt confident there were no anti-trust problems. RICHARD MONKMAN, Alaska Coastwise Pilots Association, said he was available for questions. He supported Mr. Bush's comments about the maximum tariffs saying it did not affect his client in Southeast. DOUG MCPHERSON, President, Alaska Coastwise Pilots Association, supported SB 130 in its current form. He didn't see where the protection of a maximum tariff is required. The track record of the state's involvement in maximum tariffs tends to be very involved and somewhat costly. There is the question of whether it is in the public's best interest to be involved. LARRY COTTER, Alaska Steamship Association, supported a maximum tariff. The law requires use of pilots and that sets up a situation where they use pilots and it is absolutely critical that they develop a relationship with the pilots that allows for the commerce to flow freely and on time. He thought the proposed amendment limiting the maximum tariff to only areas where there is one association should be applied to all areas regardless of the number of associations that are in that area. The role of the state is to ensure that commerce flows. That is best accomplished by having some state oversite regarding the maximum tariff that can be charged by any association. TAPE 95-44, SIDE A Number 001 He noted that people who live in Juneau have discovered that two airlines can operate a monopoly almost as effectively as one company. Maximum tariff language has been in existence for the last four years and there have been no problems with it. STEPHAN MORENO, Alaska Marine Pilots, said they support the bill as it is. In the western region things have stabilized without the maximum tariff. He couldn't think of an example of where anyone has charged an exorbitant amount for a particular pilot move. HANS ANTONSON, Southeast Alaska Pilots Association, supported SB 130 as it came out of the subcommittee and said they don't have a problem with the maximum tariff in a region that doesn't have competition, but not in an area that has competition where market factors are working. Number 115 PETER LEE NIELSEN, representing himself, said he works for Alaska Coastwise Pilots. In 1991 when the legislature provided for competition in marine piloting he thought it was good for Alaska and marine piloting. Having observed first hand the management dynamics of both SEPA as a guild and ACP as an aggressive competitor, he thought there were advantages to both methods. However, competition has sharply divided and alienated southeast pilots as a peer group, resulting in litigious actions costing individuals and the Board of Marine Pilots considerable effort, time, and expense, increased pilot license fees, raised concerns and questions about pilot training, qualifications, and marine safety issues. As a result, he thought the guild system provided for stability, better trained pilots, and more qualified pilots, and keeps safety of lives, vessels, and our shorelines and wildlife foremost. A true guild system of pilotage cannot exist in a competitive market place, MR. NIELSEN said. Competition drives tariffs. A maximum tariff pushes competing pilot associations into difficult, and at times, last minute tariff negotiations with their principals in order for them to stay in business and ensure employment for their members. It's common knowledge that the low bidder in tariff and contract negotiations usually gets the business. Therefore, industry is in a favorable position. A state-fixed tariff periodically visited by an appointed rate review commission would bring structure and stability to a chaotic situation. SENATOR LEMAN asked him to explain the guild system. MR. NIELSEN explained it's the historical system of pilotage where people join together to benefit themselves and it's become accepted that it also benefits an area. When it first started there was pure competition. His great-great-grandfather was one of those in Norway who lost his life doing that. Later, because competition disrupted commerce, pilots banded together for their own safety, for their countries' commerce in a peer-guild system. Members of the guild join together for the betterment of pilotage, the skills and safety concerns of the state, and environmental concerns. SENATOR LEMAN asked if he knew of an area where there was a true guild system. MR. NIELSEN said there are true guild systems in the United States, one is in Florida. Number 237 ERIC ELIASSEN, President, Southwest Alaska Pilots Association, said this bill incorporates the recommendations of the Alaska State Pilots Alliance draft. In Southcentral they would accept the maximum tariff amendment as opposed to fixed tariffs. He said they could go either way and they were willing to go with arbitration in those regions that did have competition.