HB 63-ALASKA MARINE HIGHWAY OPERATIONS BOARD   1:53:59 PM CHAIR MYERS announced the consideration of CS FOR HOUSE BILL NO. 63(STA), "An Act relating to the duties of the Department of Transportation and Public Facilities; renaming the Alaska Marine Transportation Advisory Board the Alaska Marine Highway Operations Board; relating to the membership and duties of the Alaska Marine Highway Operations Board; and relating to the comprehensive, intermodal, long-range transportation plan for the state." 1:54:31 PM KERRY CROCKER, Staff, Representative Louise Stutes, Alaska State Legislature, Juneau, Alaska, provided the sponsor statement and sectional analysis on behalf of the sponsor of HB 63. He paraphrased the sponsor statement, which read: [Original punctuation provided.] This bill would establish a nine-member Alaska Marine Highway (AMHS) Operation's Board, with members having the skills and experience of a ferry commission or a marine business board. The board would have the ability to assess and suggest marine business practices that enhance revenue and reduce costs. Members of the board would be chosen based on experience in personnel management, ship maintenance, construction and repair, plans and activities, and they would also have insight on fleet strategy, reliability and other service objectives. A continuing challenge for AMHS has been frequent change in policy direction, coupled with insufficient appreciation of long-term implications of such changes. Lack of clarity and long-term planning objectives such as fleet design, vessel deployment strategy, and marine business expertise have also been a hindrance. A Marine Advisory Board was established under Alaska Statute (AS) 19.65.110, and though formed with capable individuals, it is not structured to effectively direct AMHS with its large marine business operations, planning, or solutions for issues it currently faces. Recent agendas suggest the Marine Advisory Board has kept community stakeholders informed of AMHS activities and budges and provided them with general feedback about AMHS service. Currently the board is comprised of members from ferry service areas, which brings public transparency and community engagement, however the system cannot survive with community feedback alone. The members must additionally weigh business practices and have expertise in strategic planning. 1:56:37 PM MR. CROCKER continued: The AMHS Marine Operations Board would provide professional advice focused on business and financial practices of the ferry system, including fleet planning, maintenance, pricing, service models, and capital asset investment. The board would be comparable to a board of directors providing business leadership and long-term strategic planning for a corporation. 1:57:11 PM MR. CROCKER read the sectional analysis for HB 63. Section 1: Changes 19.05.030 by adding two duties to the Department of Transportation. 19.05.030 (8) which requires the Department to review and respond to recommendations by the Marine Operations Board and (9) to report whether or not the Alaska Marine Highway is meeting performance goals. Section 2: Requires the Board to create comprehensive long term and short-term plans and provides them the framework detailing what should be included in the plans. Requires the Department to submit both the short-term and long-term plans, revisions, and updates to the legislature and the governor and make the plans available to the public. 1:57:58 PM MR. CROCKER continued: Section 3: Changes the name of the board from "Marine Transportation Advisory Board" (MTAB) to "Alaska Marine Highway Operations Board". Section 4: Repeals AS 19.65.120(a) and is reenacted to do the following: (a) Creates a nine-member board instead of twelve, which includes the deputy commissioner of transportation and public facilities and requires each member to be an Alaska resident. (1) Requires one member to be a recognized union employee from the Alaska Marine Highway, to be appointed by the governor. Page | 2 (2) Requires one member from an Alaska native organization or tribe, appointed by the governor (3) Requires six members of the public: (A) That have experience in marine business and procurement practices, marine personnel management, commercial service options, ship maintenance, construction, and repair, fleet strategy, reliability, and regulatory compliance, or risk management (B) Two of which are appointed by the governor, two by the speaker of the house and two by the president of the senate. 1:59:20 PM Section 5: Creates staggered six-year terms on the board instead of three-year terms, with exception of the deputy commissioner. If a vacancy arises, it allows for a new appointment to be made to serve out the remaining term of the vacant seat. Section 6: Exempts the deputy commissioner from being removed from the board. Section 7: Requires the board to provide orientation about the Alaska Marine Highway System to the newly appointed members. Also allows for regional development associations to make recommendations for appointments to the board. 2:00:06 PM MR. CROCKER continued: Section 8: Requires the Department to provide information at the request of the board in a timely manner. Section 9: The board will provide recommendations to the commissioner of the department. (f) creates a mechanism for reporting if the recommendations are not followed. (g) allows the board to create a taskforce consisting of non-board members to investigate matters relevant. (h) Requires the board to annually make recommendations regarding preparation of the "STIP" to the department. Section 10: Changes the name of the board from "Marine Transportation Advisory Board" (MTAB) to "Alaska Marine Highway Operations Board". Section 11 AS 44.0Section 11: Amends 44.42.050(a) to require the commissioner to incorporate the comprehensive long-term plan recommended by the board into the long-range plan required under the statute. 2:01:19 PM Section 12: Repeals 19.65.120(B) Section 13: Once this bill is enacted, this section directs the terms of members of the current Marine Transportation Advisory Board to expire on the effective date and sets new staggered terms for the members of the Alaska Marine Highway Operations Board. 2:01:53 PM SENATOR KIEHL asked whether the intention was for the board to only consider vessels or if it would also include shoreside activities, such as strategy, reliability and reservations. MR. CROCKER responded that the sponsor's intent was that all aspects of AMHS would be covered, including terminals and marketing. 2:03:06 PM SENATOR MICCICHE recalled that the committee previously considered and amended [SB 103] with respect to the board composition for an Alaska Native from a coastal community that is served by the AMHS. However, that language does not seem to be part of this bill. The committee agreed it was important that the Alaska Native participant be from a coastal community that the AMHA serves. MR. CROCKER answered that was covered in HB 63 [in AS 19.65.120(a)(2)], which read "one representative of an Alaska Native organization or tribe who is currently from a community served by the Alaska marine highway system, appointed by the governor;". 2:04:13 PM SENATOR KIEHL referred to another change the committee made to [SB 103] was to require the Alaska Marine Highway Operations Board to propose an operating and capital budget ahead of the governor's usual budget schedule. He asked whether the sponsor considered this. MR. CROCKER answered that the sponsor believed this would inherently happen when developing the short and long-term plans. The sponsor did not think it was possible to craft the plans without considering a budget. 2:05:31 PM CHAIR MYERS opened public testimony on HB 63. 2:05:49 PM SHANNON ADAMSON, Alaska Regional Representative, International Organization of Masters, Mates and Pilots, Juneau, Alaska, said she serves on the current Marine Transportation Advisory Board (MTAB). She spoke in support of HB 63 because it created a more diverse board membership than the current MTAB. MM&P believes this will help depoliticize the board and isolate AMHS from some political infighting, she said. HB 63 also includes language to require that DOTPF incorporate the board's short and long-term plans, which would help the board with existing management and create better solutions. As a current MTAB member, she found that aspect invaluable because DOTPF has not adopted MTAB's recommendations. She offered her view that increasing funding to AMHS would not produce significant positive changes in service or sustainability unless AMHS's management structure were to change. Every report related to AMHS has recommended changes to its management structure. This bill starts that process and MM&P looks forward to that change. 2:07:36 PM SENATOR SHOWER asked whether MM&P would support moving AMHS out of DOTPF. MS. ADAMSON responded that MM&P would support any positive change to AMHS's current structure. The current system does not work, so that any change would be positive. 2:08:32 PM BEN GOLDRICH, representative, Marine Engineers Beneficial Association (MEBA), Juneau, Alaska, said MEBA represents the engineers on board AMHS vessels and shoreside. He said he was fully supportive of Ms. Adamson's comments. Although he does not work on the vessels, he has worked closely with AMHS for 18 years. He said Governor Dunleavy appointed him to serve on AMHS's Reshaping Work Group. One recommendation of the group was to change AMHS's management structure, which MEBA views as necessary. 2:09:42 PM SENATOR SHOWER asked if he would support moving AMHS being out of DOTPF. MR. GOLDRICH answered that MEBA would support such a change. 2:10:12 PM CHAIR MYERS, after first determining no one wished to testify, closed public testimony on HB 63. [HB 63 was held in committee.]