Despite opposition from local maritime businesses, new legislation in Oregon amends existing state law to to allow seaports to “acquire, construct, maintain and operate facilities for constructing, repairing or maintaining any type of watercraft.”
A divisive bill that supporters declared would aid economic development in Oregon, but whose detractors contended gives public ports an unfair business advantage, has been signed into law by the state’s governor.
House Bill 2902 went into effect immediately upon being signed into law by Oregon Gov. Kate Brown at the end of May. Her signature followed a 20-9 approval vote on the state Senate floor in May and a 48-11 passage by the House in March.
The bipartisan legislation, which was introduced by Rep. David Gomberg, D-Neotsu, and co-sponsored by Rep. David Brock Smith, R-Port Orford, and state Sen. Arnie Roblan, D-Coos Bay, was put forth at the request of Oregon Public Ports Association. It amends existing state law to allow seaports to “acquire, construct, maintain and operate facilities for constructing, repairing or maintaining any type of watercraft.”
“This bill brings to Oregon assurance commercial and recreational fleets that if a private party that currently operates a shipyard is unable or unwilling to do so, a port can step in and fill that void and provide service to those various fleets,” Mark Landauer, executive director of the Oregon Public Ports Association, told American Shipper.
“These are ports that have invested millions of dollars to these [shipyard] facilities, regardless of if they are operated by private business or a port. This [legislation] is to ensure that vessel repair, maintenance and construction services are available for Oregon’s commercial and recreational fleets,” Port of Coos Bay CEO John Burns, a supporter of the bill, said in a statement.
Competitive Advantage? Despite the bill’s supposed benefits, HB 2902 had been heavily opposed by numerous maritime-related businesses within the state prior to its passage. They argued that the legislation would unfairly benefit the ports and potentially drive private shipyards out of business due to that unfair competition.
None of the companies that had opposed the legislation responded to American Shipper’s request for comment on the bill becoming law, but in written testimony filed before HB 2902 was passed, some owners said they wanted a simple change made to the legislation—the removal of the word “operate.”
In written testimony to the House Committee on Economic Development and Trade, Jim Zimmer, a grant writer for Reedsport-based Fred Wahl Marine Construction, argued that the bill, as written, would authorize public ports to “drive existing marine repair facilities out of business.”
Coos County Commissioner John Sweet also voiced his opposition to the bill, calling it a classic example of the debate over where government’s role in providing infrastructure ends and the private sector’s role begins.
“Although the line between public infrastructure and private enterprise is often blurred, I think it is one thing for thing for ports to provide facilities such as dry docks…and another for them to operate such facilities,” said Sweet.
State legislators ultimately declined to alter the language of the bill, which they say was actually written specifically to give ports shipyard authorization to run shipyards.
Housekeeping Rule. There are five seaports in Oregon that own shipyards in the cities of Astoria, Brookings Harbor, Coos Bay, Port Orford and Toledo. However, the primary beneficiary of the new law, at least initially, is the Port of Toledo, which is the only one of the five that also operates its shipyard.
Port of Toledo Port Manager Bud Shoemake told American Shipper much of the impetus for HB 2902 came years ago, when his port was forced to step in and operate its shipyard out of necessity after what was then called the Fred Wahl Boat Yard closed.
“When the only shipyard that was capable of hauling our larger commercial fishing boats closed its doors, after a couple of years, the Port of Toledo stepped in to operate and run that facility,” he explained. Fred Wahl closed the facility in 2008. The port bought the shipyard for $1.5 million in late 2010 and reopened it Feb. 1, 2011.
At the time, however, there was no law on the books stating that a seaport was allowed to operate a shipyard. So an Oregon Public Ports Association legislative committee looked into updating and clarifying the law. The OPPA eventually brought the matter to legislators for what Shoemake called a “housekeeping rule” that would make it clear that the Port of Toledo wasn’t doing anything illegal by running the shipyard.
“All along, we felt we had the right to operate it, but there wasn’t specific language in the law that said it. There were lots of other things we could do, but it didn’t actually say ‘shipyard,’ so it was just clarification,” Shoemake said. “We had legal opinions that said that we were allowed to be doing what we’re doing, but we just wanted it straight-up being said.”
Filling A Need. Shoemake said he understands the concerns of the private operators better than most because he was actually one himself once.
“I actually had operated a shipyard as a private operator. I managed it for about six years before I became a port manager, so I know the players and I know the concerns,” he said. “There’s a number of ports that operate shipyards now. And so what [the legislation] does is it just makes it so that we really can’t get challenged and spend money on costly lawsuits that aren’t to the public’s best interest.
“We are the only boatyard in our region, so it was important the port stepped in, bought it and took over the operation of it, or otherwise we would not have a shipyard here,” he explained.
Roblan echoed that sentiment in a statement following the bill’s passage in both sides of the state legislature.
“When private sector businesses aren’t available or choose not to pursue ship building and repair opportunities for any reason, that port should be able fill that need, if it exists, by operating the shipyard themselves,” he said. “This bill simply clarifies that these activities are allowed through clear language in the statutes. It will help these agencies, which exist solely for the economic development of their communities, an option to fill service needs for the small businesses and other community members they serve.”
Despite their vigorous hostility toward the bill, its opponents have shown no indication that they will try to repeal or alter it now that it’s been signed into law, which means that going forward, the Port of Toledo and other seaports in Oregon will have what the legislation was intended to bring: confirmation and authorization.