HB 407-PROHIBIT COMMERCE WITH RUSSIA  10:07:06 AM CO-CHAIR SPOHNHOLZ announced that the final order of business would be HOUSE BILL NO. 407, "An Act relating to commerce with Russia; relating to the use of the ports in the state; and providing for an effective date." CO-CHAIR SPOHNHOLZ noted that HB 407 is another bill in the suite of legislation that the committee is considering from the House Labor and Commerce Standing Committee. 10:07:14 AM CO-CHAIR FIELDS introduced HB 407 on behalf of the House Labor and Commerce Standing Committee, sponsor. He stated that HB 407 would prohibit the importation of Russian goods specifically by using Alaska's powers of state to prohibit Russian boats from docking at Alaskan ports and offloading goods and materials. He noted that the late Alaska Congressman Don Young introduced an important federal bill on this point, and that Congress has taken swift action to assure that there is strong federal law prohibiting the fueling of the Russian war machine through Russian imports. He further noted that some of the assets of some Russian oligarchs who were enriching Putin have been seized by other nations. He recognized that there is a lot of commerce in Alaska with Asia and Europe and said longshoreman across the U.S. have on their own refused to unload Russian products at ports. Alaska as a state should support democracy and the free people of Ukraine, he said, and HB 407 will ensure that Alaskans don't inadvertently provide financing to Putin and his aggressive regime. 10:08:49 AM EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State Legislature, provided the sectional analysis for HB 407 on behalf of the House Labor and Commerce Standing Committee, sponsor. He paraphrased from the document provided in the committee packet titled "Sectional Analysis House Bill 407 Version A," which read as follows [original punctuation provided]: * Section 1. AS 30.50 is amended by adding a new section to prohibit all Russian ships from docking at ports in Alaska. This includes Russian-flagged vessels, ships that are crewed by Russian nationals, and ships that carry Russian cargo. * Sec. 2. AS 45.45 is amended by adding a new section that bans all imports and exports with Russia, including seafood, alcohol, and oil & gas. * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section that permits specific trade with Russia, including the docking of specific vessels, if contracts were signed prior to the effective date. * Sec. 4. AS 30.50.030 and AS 45.45.940 are repealed. Section 1 & 2 of this bill are automatically repealed after 10 years. * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section that automatically repeals the provisions of this bill banning commerce with Russia, if the current security risk is resolved and the U.S. Government lifts its sanctions on Russia. * Sec. 6. If, under sec. 5(a) of this Act, sec. 4 of this Act takes effect, it takes effect on the earlier of either July 1, 2032; or the day on which DCCED commissioner revises the statutes under Section 5(b) Sec. 7. Except as provided in sec. 6 of this Act, this Act takes effect immediately under 3 AS 01.10.070(c). Provides for an effective date. MR. ANDERSON expounded on Section 1 and explained that typically the only information tracked is for flagged vessels. However, he continued, vessels come into Alaska waters which are crewed or carry Russian cargo, and these are not always tracked under similar measures. 10:11:49 AM CO-CHAIR SPOHNHOLZ opened invited testimony on HB 407. 10:11:59 AM STEVE WHITE, Captain, Executive Director, Marine Exchange of Alaska, provided invited testimony on HB 407 via a PowerPoint presentation titled "Russian Vessels in Alaska." He displayed the second slide, "Sovcomflot (SCF) Vessels 2010-current 'Russia's Largest Shipping Company.'" He stated that the Marine Exchange does traffic analysis and sea traffic management, and a traffic analysis was done on Russian ships and ships that are associated with Russia or Russian companies, some of which was done for the federal government. He said SCF, a Russian-owned company with a focus on moving hydrocarbons, jet fuel, made 12 port calls at Anchorage over the last 10 years, including three [in 2022]. He related that SCF ships are flagged by Liberia, not Russia, but noted that flagging in another country is a common practice. He said the black lines on the map delineate traffic to Alaska and the white lines delineate traffic to Canada and Washington. CAPTAIN WHITE proceeded to the third slide, "SCF Tankers at Alaska Ports 0 < COG < 180." He explained that the blue lines on the map represent where the tankers came from, east to west, to hit Alaska ports. But, he continued, they originated in Korea and before they were in Korea they came from Russia. He reiterated that SCF is a Russian owned company but is not Russian flagged. CAPTAIN WHITE moved to the fourth slide, "SCF Tankers at Alaska Ports 180 < COG < 360." He explained that the red lines on the map represent the tankers going back from the west to the east and that they went to Russian ports instead of South Korea. CAPTAIN WHITE showed the fifth slide, "Russian-flagged Vessels Along the Border (2014 2021)." He said the two maps on the slide show the massive amount of Russian flagged vessels that came close to Alaska borders. He explained that the depictions are of the Bering Strait with tracks in color by industry [blue = fishing, black = tanker, green = cargo, orange = tug, fuchsia = passenger/pleasure, and red = military/law enforcement]. He drew attention to the map on the left and noted that the [solid blue color] that looks like water is just the fishing activity. He then brought attention to the extensive activity shown on the map to the right and said it excludes the fishing activity. He pointed out that the boat making port calls out of Nome [depicted by the fuchsia-colored line] is listed as a passenger/pleasure craft on the Automated Information System (AIS), but that it is actually a research vessel which receives its permits through the [U.S. Department of State]. Captain White turned to the sixth slide, "Russian-flagged Vessels in AK Ports 2010-current," and stated that there has not been a ton of port calls in Alaska since 2010. CAPTAIN WHITE displayed the seventh slide, "Russian Superyachts 2010-2021." He said these superyachts of oligarchs have visited Southeast Alaska, with the last one in 2018. He offered his belief that one of the vessels has been seized by another country at this time. He pointed out that these superyachts are not flagged by Russia, but rather Bermuda and Cayman Islands, and advised that deeper analysis must often be done to figure out where [vessels] come from. CAPTAIN WHITE spoke to the eighth slide, "Russian Vessel Calls at Alaska Ports 2010-current." He stated that not many cargo ships come from overseas directly to Alaska - much of Alaska's cargo comes from the bigger ports on the [U.S.] West Coast and then to Alaska, and a lot of that is by barge rather than cargo ship, especially in Southeast Alaska. So, he added, the control points really are in the Lower 48. He summarized by noting that over the past 11 years, there have been less than 20 commercial visits from Russian ships which includes the Russian-owned ships that are Liberian flagged, and less than 40 personal or pleasure port calls in Alaska. 10:18:17 AM REPRESENTATIVE KAUFMAN asked whether there would be some kind of work around for an emergency if Alaska was to close its ports to vessels owned by Russians. Responding to Captain White for clarification, he asked whether there would be a safety valve should there be a Russian vessel is in distress, but Alaska has closed its ports to vessels owned by Russians. CAPTAIN WHITE replied yes. He explained that anyone having a problem can claim force majeure, which gives the right to pull into port. He said this is a common practice internationally, and it allows for that to happen for safety reasons, such as a mechanical breakdown or humanitarian crisis. REPRESENTATIVE KAUFMAN asked whether the bill as currently written would allow that. CAPTAIN WHITE responded that he doesn't know all the details of the bill, but he doesn't think Alaska could write a bill that would prevent force majeure. 10:19:56 AM CO-CHAIR SPOHNHOLZ asked whether force majeure is international law as well as U.S. law. CAPTAIN WHITE confirmed that force majeure is international law. He said it protects U.S. vessels like other vessels that operate here; for example, a U.S. boat that needs to pull into a foreign country for an emergency reason. It is for safety of life and protection of the environment, he stated, and it is extreme circumstances. 10:20:41 AM CLAYTON W.A. CHRISTY, Captain, President, provided invited testimony during the hearing on HB 407. He stated that Alaska Marine Pilots is a small group comprised of 10 captains mandated by the State of Alaska to provide pilotage services to vessels plying the coastal waters of Region III, Western Alaska, to assure the protection of shipping, human life and property, and the marine environment. He noted that Region III encompasses all state waters west of 156 degrees west longitude, which includes the Alaska Peninsula, the Aleutian Islands, the west coast of Alaska including the islands of the Bering Sea, and along the northern coast to the Canadian border. He said Alaska Marine Pilots provides firsthand the pilotage services to foreign flagged vessels that are calling in Alaskan waters. Over the years, he related, Alaska Marine Pilots has seen Russian flagged oil tankers, Russian flagged research ships calling into the Port of Nome and Port of Dutch Harbor, and Russian flagged icebreakers calling into Dutch Harbor and various other ports during the years when Shell was doing its exploration in the Chukchi Sea. 10:22:23 AM REPRESENTATIVE NELSON asked whether enactment of HB 407 would cause any concerns or dangers to utilizing Russian flagged icebreakers that are vital on the north side of Alaska. CAPT. CHRISTY replied that, to his knowledge, this would not be harmed by the bill. 10:23:15 AM MR. ANDERSON recalled that about four or five years ago a Russian icebreaker provided a fuel delivery to Nome when the city had run out fuel. He stated that HB 407 does not currently contain any provision for emergencies and that that change would be welcomed. REPRESENTATIVE NELSON said that is the incident he was referring to, and he would look at that change until U.S. icebreakers are put online. [HB 407 was held over.]