03/14/2012 08:30 AM House FINANCE

HOUSE BILL NO. 358                                                                                                            
                                                                                                                                
     "An Act relating to an advertising campaign in support                                                                     
     of opening the Arctic National Wildlife Refuge for                                                                         
     development."                                                                                                              
                                                                                                                                
Co-Chair  Stoltze opened  the meeting  and reported  that HB
 was unchanged.                                                                                                              
                                                                                                                                
Vice-chair Fairclough MOVED to  ADOPT HB 358, 27-LS1406\M as                                                                    
a working document. There being NO OBJECTION is so ordered.                                                                     
                                                                                                                                
9:41:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LANCE PRUITT, SPONSOR  presented HB 358 as an                                                                    
advertising campaign  to open  the Arctic  National Wildlife                                                                    
Refuge  (ANWR) for  development. The  bill would  direct the                                                                    
state  to contract  with a  qualified trade  organization to                                                                    
advertise opening the coastal plain  of ANWR for oil and gas                                                                    
exploration  and development.  The Alaska  National Interest                                                                    
Land  Conservation Act  of 1980  prohibited  the leasing  or                                                                    
other development leading  to the production of  oil and gas                                                                    
from the  Arctic National Wildlife Refuge.  He stressed that                                                                    
domestic  demand for  oil continues  to  rise. The  proposed                                                                    
trade  organization could  communicate  that new  technology                                                                    
had greatly  improved the  environmental impact  on drilling                                                                    
and that  oil and  gas development  can coexist  in Alaska's                                                                    
arctic. He concluded that state  revenue depends on resource                                                                    
development;   therefore   it   makes   sense   to   promote                                                                    
responsible development to benefit Alaskans.                                                                                    
                                                                                                                                
DIRK  CRAFT, STAFF,  REPRESENTATIVE  LANCE PRUITT,  informed                                                                    
the  committee   that  the  legislation  has   been  modeled                                                                    
directly  after  the   state's  tourism  marketing  contract                                                                    
statute.                                                                                                                        
                                                                                                                                
9:44:21 AM                                                                                                                    
                                                                                                                                
Representative Wilson asked if there  was a needed amount to                                                                    
make the program  effective. Representative Pruitt responded                                                                    
that  a qualified  trade  organization  would determine  the                                                                    
amount. The amount would be  whatever the organization would                                                                    
be willing to  bring to the table, and then  the state would                                                                    
match  that  amount.  He  expected it  would  be  less  than                                                                    
$500,000   from   a   small  organization.   If   a   larger                                                                    
organization  was  interested  then   the  amount  would  be                                                                    
larger, but the expected amount  would probably be under one                                                                    
million for the first year.                                                                                                     
                                                                                                                                
Representative Gara  agreed it seemed reasonable  to set the                                                                    
record straight on ANWR. He  expressed his concern that some                                                                    
individuals  may  reap  a short  term  advantage,  but  give                                                                    
Alaska  a  long term  disadvantage.  He  suggested that  ads                                                                    
taken  out may  target certain  political candidates  in the                                                                    
lower 48. The short term  benefit could be for candidates to                                                                    
use the  cause for personal  gain to obtain more  votes, but                                                                    
the  long  term damage  would  be  other individuals  hating                                                                    
Alaska  for  interfering  in another  state's  politics.  He                                                                    
believed some politicians, who were  for opening ANRW, would                                                                    
support  it, but,  once  elected, makes  sure  it was  never                                                                    
opened.  He would  like accurate  information about  ANWR to                                                                    
set  the record  straight  in the  lower  48, but  cautioned                                                                    
against targeting candidates.                                                                                                   
                                                                                                                                
Representative Pruitt indicated he  would be willing to talk                                                                    
with Representative Gara. He avowed  that the intent was not                                                                    
to  influence  political  candidates,   but  to  provide  an                                                                    
opportunity  to address  constituents in  the United  States                                                                    
about the  information. He  wanted to  make sure  people had                                                                    
accurate information on ANWR.                                                                                                   
                                                                                                                                
9:48:38 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze appreciated  Representative Gara's  point.                                                                    
He  wondered  if  the  state should  be  spending  money  on                                                                    
initiatives and  referendums and  stressed that it  could be                                                                    
counterproductive  to use  state  money in  that manner.  He                                                                    
indicated the desire to move  the bill out of committee, but                                                                    
a   few  policy   questions  needed   to   be  cleared   up.                                                                    
Representative Pruitt agreed.                                                                                                   
                                                                                                                                
Representative   Costello  indicated   she  was   trying  to                                                                    
understand  the logistics  of the  bill.  She questioned  if                                                                    
there  would  be  proposals from  organizations,  the  state                                                                    
would  identify the  winning proposal,  and  then match  the                                                                    
proposal's amount.  She asked  how that  would work  and how                                                                    
the money  would be  raised. Representative  Pruitt answered                                                                    
that the trade association,  determined by the Department of                                                                    
Commerce, would provide the proposed  money amount that they                                                                    
received  from many  different sources.  The money  would be                                                                    
from  the  private  sector and  the  organization  would  be                                                                    
responsible for acquiring the money;  it would not be on the                                                                    
state. The  legislature then would appropriate  the money to                                                                    
match the  amount. The ownership  of the  marketing campaign                                                                    
would be  shared jointly  by the  trade association  and the                                                                    
state. Representative  Costello asked if an  amount had been                                                                    
determined   for   the   campaign.   Representative   Pruitt                                                                    
specified that  that he did not  want to put a  limit on the                                                                    
marketing group.  The plan was to  market Alaska's resources                                                                    
and  bring more  money into  the state.  He believed  Alaska                                                                    
should celebrate if a group wanted  to put a large amount of                                                                    
money into the  campaign. He did not want to  limit what the                                                                    
private sector could  bring in. He emphasized that  it was a                                                                    
50/50 program.  He reiterated  that to  date the  number was                                                                    
closer  to  $500,000.  Representative Costello  pointed  out                                                                    
that there are organizations  presently working on the issue                                                                    
and wondered  if the bill  included coordination  to prevent                                                                    
duplication  of efforts.  Representative Pruitt  stated that                                                                    
there  was  nothing in  the  bill  that specifically  states                                                                    
there must be coordination to  avoid duplication. He was not                                                                    
aware of  any other campaign  on a national  scale regarding                                                                    
the issue.                                                                                                                      
                                                                                                                                
9:54:18 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze appreciated  that  on page  1, line  13-14                                                                    
where it states a direct ownership of the campaign.                                                                             
                                                                                                                                
Representative  Neuman indicated  his confusion  on how  the                                                                    
funding  mechanism  worked. Representative  Pruitt  revealed                                                                    
that the  bill was modeled  after the tourism  campaign. The                                                                    
Department of  Commerce does not  have a monetary  fund, but                                                                    
the trade  association would approach the  department with a                                                                    
monetary amount and then money  would be appropriated by the                                                                    
legislature   up  to   50  percent.   Representative  Neuman                                                                    
summarized that the state would  enter into a contact with a                                                                    
qualified  trade  association,  the  association  would  get                                                                    
funding for lobbying for ANWR,  and then ask the legislature                                                                    
for  matching funds.  Representative Pruitt  emphasized that                                                                    
the  plan was  for  a marketing  campaign  not lobbying.  He                                                                    
continued  that the  association  would find  the money;  it                                                                    
would not be on the state.                                                                                                      
                                                                                                                                
Representative Neuman  voiced his  concern over  the state's                                                                    
monetary obligation  and would  like to see  a limit  put on                                                                    
for budgetary reasons. He would  like further information on                                                                    
the state's obligation.                                                                                                         
                                                                                                                                
Co-Chair Stoltze  reiterated that the monetary  number would                                                                    
be   subject   to   appropriation.   Representative   Neuman                                                                    
questioned  if the  state does  not match  the amount  by 50                                                                    
percent, what then would happen.                                                                                                
                                                                                                                                
9:59:46 AM                                                                                                                    
                                                                                                                                
Representative Pruitt responded that  choices would be made.                                                                    
The campaign  could still  go forth even  if the  state does                                                                    
not match the 50 percent.                                                                                                       
                                                                                                                                
Representative Doogan wanted  an idea of how  much money has                                                                    
been put into the ANWR  Arctic Power.  Representative Pruitt                                                                    
did not  know the exact  amount. Arctic Power money  is used                                                                    
for individuals to talk directly  to people on Capitol Hill.                                                                    
The  purpose of  the campaign  was  not to  reach people  in                                                                    
Washington,  but to  communicate information  to the  people                                                                    
who elect the representatives to Washington.                                                                                    
                                                                                                                                
Representative Doogan  wanted the Arctic  Power information.                                                                    
He  expressed his  frustration  with  all the  indeterminate                                                                    
fiscal notes.  He asked for  a projection, not just  a blank                                                                    
check.  He did  not believe  it responsible  to keep  rubber                                                                    
stamping indeterminate fiscal notes.                                                                                            
                                                                                                                                
Co-Chair   Stoltze  interjected   his  concerns   about  the                                                                    
political perimeters  and the monetary  limits of  the bill.                                                                    
He  indicated  that  he  would   like  to  see  a  committee                                                                    
substitute  to answer  the questions  rather than  deal with                                                                    
the questions on the floor.                                                                                                     
                                                                                                                                
Representative Doogan  revealed he  was not trying  to block                                                                    
the  bill,  but would  prefer  more  parameters. The  fiscal                                                                    
notes are not telling the committee anything.                                                                                   
                                                                                                                                
10:06:27 AM                                                                                                                   
                                                                                                                                
Vice-chair Fairclough revealed a  letter of support from the                                                                    
local Teamsters  959 indicating that there  could many trade                                                                    
organizations that  might want  to move the  message forward                                                                    
concerning ANWR.  A limit or  an amount was needed  so there                                                                    
would  be a  real number  to evaluate.  She wondered  if the                                                                    
campaign would  qualify for  a film  tax credit.  She voiced                                                                    
her  concern of  an outside  organization crafting  the ANWR                                                                    
message. She  again mentioned the Arctic  Power organization                                                                    
was a very  small office, but the state was  receiving a lot                                                                    
for the money  invested. She stated though that  it was hard                                                                    
for one  person to reach  all the powers in  Washington with                                                                    
the message.  Arctic Power  has been  trying to  get factual                                                                    
information out to the public,  but some in the organization                                                                    
may not know enough. There needs  to be a consistency in the                                                                    
message.  She   suggested  that   maybe  Arctic   Power  was                                                                    
targeting  those  who   already  support  ANWR  development,                                                                    
instead of  targeting those who  are opposed.  She indicated                                                                    
her support  for an advertising  campaign, but  suggested it                                                                    
be a  consolidated effort with  the Arctic Power  board. She                                                                    
reported  that 41  U.S. senators  voted  for development  of                                                                    
ANWR  and  it was  a  prime  time  to advertise  for  arctic                                                                    
development.                                                                                                                    
                                                                                                                                
10:13:09 AM                                                                                                                   
                                                                                                                                
Representative Edgmon  indicated he would be  supporting the                                                                    
bill,  but  was  skeptical  on  what  it  will  produce.  He                                                                    
believed  it would  take a  broad scale  message. Alaska  is                                                                    
viewed nationally as  the last frontier so he  is dubious on                                                                    
what  will be  achieved.  He also  indicated some  technical                                                                    
questions.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze asserted  that  Alaska is  not  in a  good                                                                    
position just having the oil  industry is the spokesmen. The                                                                    
state  needs to  speak as  a  state policy  issue. HE  would                                                                    
prefer Alaskans to speak with their own voice.                                                                                  
                                                                                                                                
HB  358  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.