SJR 12-CRUISE SHIP PORT TIMES: JONES ACT 5:08:02 PM CHAIR JOHANSEN announced that the first order of business would be CS FOR SENATE JOINT RESOLUTION NO. 12(STA), Requesting that Alaska be exempt from changes to the interpretation of the Passenger Vessel Services Act of June 19, 1886, proposed by the United States Department of Homeland Security, Bureau of Customs and Border Protection, affecting cruise itineraries of foreign- flagged vessels transporting passengers to ports in Alaska; or, if Alaska is not exempted, opposing the proposed changes to the interpretation of that Act. 5:08:15 PM HEATHER BRAKES, Staff to Senator Gene Therriault, Alaska State Legislature, presented the sponsor statement for SJR 12 on behalf of Senator Therriault. She stated that in November [2007], the U.S. Department of Homeland Security, Bureau of Customs and Border Protection, published a new interpretation of the Passenger Vessel Services Act of 1886. This new interpretation would require foreign-flagged cruise ships to spend [at least] 48 hours in foreign ports and that the period of time spent in foreign ports amount to more than 50 percent of the total time spent in U.S. ports of call. The interpretation would also [permit] cruise ship passengers to disembark at the foreign port. MS. BRAKES said the cruise industry brings more than one million passengers to Alaska each year and provides over 40,000 jobs, a significant contribution to the state's economy. This new interpretation would have a devastating impact on many jobs and Alaskan-owned businesses in both coastal and inland communities throughout the state. According to the Department of Commerce, Community, & Economic Development, the expected impact to Alaska would be approximately 158 fewer voyages, approximately 349,000 fewer passengers, and an expected loss of $222 million in direct spending. She said SJR 12 requests that Alaska be exempted from this new interpretation, and that the state opposes the interpretation if it is not exempted. 5:10:28 PM REPRESENTATIVE FAIRCLOUGH inquired whether the ships currently servicing communities in Alaska can qualify for the exemption that is listed in the Federal Register, Volume 72, under III. Current Law and Policy, which states: (2) has been issued a certificate of documentation with a coastwise endorsement or is exempt from documentation but would otherwise be eligible for such a certificate and endorsement. MS. BRAKES deferred to Chris Poag with the Department of Law. 5:11:45 PM JOHN BINKLEY, President, Alaska Cruise Association, stated that the Alaska Cruise Association's membership is made up of cruise lines that bring visitors to Alaska, as well as Alaska business that rely on the cruise ship industry for their livelihood. He said the association supports CSSJR 12(STA) and thanks the committee for hearing the resolution and the sponsor for bringing it forward. The resolution would put the State of Alaska on record as opposing this proposed interpretation that would bring significant harm to many communities and businesses throughout the state. The economic impact from this rulemaking would be devastating to some Southeast Alaska communities. He urged the committee to support the resolution. 5:13:11 PM REPRESENTATIVE FAIRCLOUGH reiterated her question about the Federal Register exemption. MR. BINKLEY said the cruise lines' legal departments have studied this thoroughly and he has not heard any mention of an exemption that could be applied for. He related that the cruise lines are hopeful that one of the following actions will occur: 1) the rulemaking does not apply to Alaska and is only specific to Hawaii, 2) the rule does not occur, or 3) there is legislation clarifying that Alaska and other jurisdictions are exempt from the interpretation. 5:14:51 PM RON PECK, President, Alaska Travel Industry Association (ATIA), informed the committee that ATIA is a trade association that advocates on behalf of its more than 1000 member businesses involved in the travel and visitor industry. He said ATIA wholeheartedly endorses SJR 12. The proposed reinterpretation would dramatically impact cruise itineraries in Alaska, the visitor experience in the state, and severely impact a multitude of independently-owned Alaska businesses throughout the state that work with the cruise industry in offering land-based experiences for cruise visitors. He read ATIA's unanimously- passed resolution opposing the proposed federal rule change. 5:17:19 PM CHRIS POAG, Assistant Attorney General, Commercial/Fair Business Section, Civil Division (Juneau), Department of Law (DOL), responded to Representative Fairclough's previous question about the Federal Register. He explained that what she is reading is the actual federal law. However, what is being reinterpreted, or formally interpreted by the proposed regulation packet, is the federal regulation. In the actual law the "or" being referred to does not modify the "and" that comes after (1), the first requirement. 5:18:10 PM MR. POAG, in response to Representative Johnson, defined the term coastwise as meaning that when a ship stops at a U.S. port it is a coastwise stop. He said this is about foreign-flagged vessels stopping in U.S. ports and when they are allowed to stop under this federal law. This is a reinterpretation of a regulation that currently allows for these vessels to stop in Alaska because they return to the port they started from in Seattle, but made a stop in a nearby foreign port which is Vancouver [British Columbia, Canada]. However, the reinterpretation for the Hawaii ports is implicating, or arguably affecting, the Alaska vessels as well. 5:19:22 PM CHAIR JOHANSEN closed public testimony. REPRESENTATIVE NEUMAN moved to report CSSJR 12(STA) out of committee with individual recommendations and the accompanying fiscal notes. There being no objections, CSSJR 12(STA) was reported from the House Transportation Standing Committee.