Legislature(1995 - 1996)

02/22/1995 03:00 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 HL&C - 02/22/95                                                               
 HB 147 - SPORT FISHING MARKETING COUNCIL/SURCHARGE                          
                                                                               
 Number 379                                                                    
                                                                               
 REPRESENTATIVE JOE GREEN, PRIME SPONSOR OF HB 147, stated he                  
 introduced the bill to establish, within the state, a proponent               
 for encouraging non-resident sports fisherman to come to the                  
 state and enjoy what we can offer them.  He said the bill would               
 not be geared to bringing non-residents to places suffering from              
 over use such as the Russian and Kenai Rivers.  The purpose of                
 this council would be to appeal to non-resident sports fisherman,             
 the people who want to be in the "out back."  The council would               
 direct publicity and advertising towards that end.                            
                                                                               
 JEFF LOGAN, LEGISLATIVE ASSISTANT TO REPRESENTATIVE JOE GREEN,                
 stated Alaska was a maturing tourism market.  He made reference               
 to specialized marketing, such as eco-tourism, which focuses on               
 environmental tourism, and senior citizen tourism, which brings               
 senior citizens up during the off seasons.  He stated that this               
 market was ready for the Alaska sport fishing experience, as a                
 specialized market.  This bill does not create a new organization             
 as much as it helps bring together the members of an existing                 
 industry to promote themselves.  He stated in the committee                   
 member's packet was a page from the Governor's transition report,             
 where the Governor's Task Force on Fisheries recognizes that an               
 effort to market a sport fishing experience is something the                  
 state needs to do.  HB 147 creates a marketing council, which is              
 directed by a board, and managed jointly by the Commissioner of               
 Commerce and a qualified trade association.  As the bill was                  
 initially written, the board would have 19 members.  Mr. Logan                
 stated he had some proposed amendments for HB 147.  He stated                 
 that they would amend the number of members to 11.  The board                 
 then would be comprised of the director of the Division of                    
 Tourism, and the director of the Division of Sport Fish, in which             
 both would be permanent positions.  The sport fishing industry                
 would nominate five members, and the Governor would nominate                  
 four.  The board would be responsible for directing the efforts               
 of the council in entering into agreements with private and                   
 public organizations to market Alaska as a sport fishing                      
 destination.  The bill says that the board may not hire                       
 employees.  It brings an existing industry together to promote                
 itself.  The board and the council would have the ability to                  
 enter into contracts to accomplish their duties, but it wouldn't              
 be necessary to hire any new people to do this.                               
                                                                               
 Number 476                                                                    
                                                                               
 CHAIRMAN KOTT stated since the legislature was appropriating some             
 money in the form of per diem, it would be creating another layer             
 of bureaucracy.  Whether this was essential or necessary is the               
 issue.                                                                        
                                                                               
 REPRESENTATIVE PORTER said it was his understanding that the                  
 Alaska Tourism Marketing Council (ATMC) members pay their own way             
 to board meetings, and that would be the case here as well.                   
                                                                               
 Number 493                                                                    
                                                                               
 REPRESENTATIVE GREEN stated that the bill allows per diem                     
 expenses within the state but not outside the state.  He stated               
 that there would be a self generating extreme surplus of funding.             
 The current fiscal note shows a large amount of money going to                
 this council; however, that isn't the intent of the council.  It              
 would be less than $100,000 for the first couple years.  He                   
 stated that it would never approach the $900,000 shown on the                 
 fiscal note.  In essence, the added layer would be more of a kin              
 to an advisory council.                                                       
                                                                               
 Number 511                                                                    
                                                                               
 REPRESENTATIVE ELTON stated that the fiscal note reflects over $1             
 million a year.  He inquired as to how they estimated their                   
 expenditures at substantially less than that amount.                          
                                                                               
 REPRESENTATIVE GREEN commented that this was one of the items to              
 which Mr. Logan referred to, in that the fiscal note should be                
 down sized considerably.  He stated that the misunderstanding in              
 the preparation of the note was in thinking that all of the items             
 were expenditures, with the balance of the fund being used by the             
 council for advertising.  He stated that in reality, the fiscal               
 note would be 15 percent of that.                                             
                                                                               
 MR. LOGAN added that in the preparation of the fiscal note, there             
 were a number of assumptions the department utilized.  There were             
 a large number of unanswered questions in the preparation of the              
 fiscal note.  Now that they'd seen it, the note would be a                    
 working document.  He acknowledged that it posed a number of                  
 questions, and that they would answer those questions.  The                   
 fiscal note then would change.                                                
                                                                               
 Number 528                                                                    
                                                                               
 REPRESENTATIVE ELTON noted that some of the outstanding costs                 
 would be for travel.  To accomplish the purposes of the council,              
 he assumed there would be a substantial amount of contractual                 
 money.  He inquire regarding the anticipated size of that                     
 expenditure.                                                                  
                                                                               
 Number 538                                                                    
                                                                               
 REPRESENTATIVE GREEN said the amount utilized would depend on                 
 what the Department of Fish and Game actually allocates.  There's             
 the possibility that once the funds are realized, Fish and Game               
 wouldn't allocate anything.                                                   
                                                                               
 MR. LOGAN stated that a marketing program would take a lot of                 
 money.  He referred to the difference is in the fiscal notes for              
 FY 96 and 97 and said they don't expect to have too much income               
 generated by that point, so those numbers will be reduced                     
 considerably.                                                                 
                                                                               
 Number 559                                                                    
                                                                               
 REPRESENTATIVE PORTER surmised that there wouldn't be any net                 
 impact on the general fund.  He stated that with the program                  
 receipts going back into the general fund from the sale of                    
 brochures and the $5 increase on the 220,000 out of state                     
 licenses, there was a chance that the receipts would never come               
 back to the program.  He stated that it was not inappropriate to              
 dedicate them all to this program.                                            
                                                                               
 Number 571                                                                    
                                                                               
 REPRESENTATIVE GREEN stated the proponents of this council were               
 concerned in having money coming in then having to allocate back              
 out, they were willing to take that chance.  The more money                   
 available, the better the advertising.                                        
                                                                               
 REPRESENTATIVE ROKEBERG stated he had concerns with the                       
 memorandum sent by Mr. Bertke and Mr. Hodson, dated the February              
 21.  He said the committee should be talking about whether they               
 should continue considering the bill before the problems were                 
 cleared up.  The point of the memorandum was that they could be               
 guilty of diverting federal funding and be in jeopardy of losing              
 $10 million of federal funds.                                                 
                                                                               
 REPRESENTATIVE KOTT pointed out to Jeff Logan that on page 4,                 
 line 30 of the bill, it suggests that the council shall deposit               
 the money in the general fund, and on page 5, line 16, the money              
 collected from the $5 surcharge will be deposited into the fish               
 and game fund.  He asked if the $5 surcharge goes to the fish and             
 game fund, we don't have to divert monies from the general fund               
 to the fish and game fund, which is currently being done.  He                 
 asked if under federal law, the money that went to the fish and               
 game fund would have to stay there.                                           
                                                                               
 MR. LOGAN stated that in the committee member's packet, there is              
 a memorandum from George Utermohle, Attorney, Legislative Affairs             
 Agency, explaining the workings of the fish and game fund.  He                
 further stated that once the $5 surcharge went into the fund, it              
 stayed there and could only be used for sport fish research or                
 management.                                                                   
                                                                               
 REPRESENTATIVE KOTT asked if there was an anomaly between the two             
 sections on pages 4 and 5.                                                    
                                                                               
 MR. LOGAN answered, "No."                                                     
                                                                               
 Number 619                                                                    
                                                                               
 JOHN BURKE, DEPUTY DIRECTOR, SPORT FISH DIVISION, ALASKA                      
 DEPARTMENT OF FISH AND GAME (ADF&G), AND FEDERAL AID COORDINATOR,             
 explained he is in charge of federal aid to sport fish                        
 restoration for the ADF&G, and stated he had spoken several times             
 with the Federal Aid Office in Anchorage and was told they would              
 view this as a diversion of funds.  Money collected for licenses              
 must, in turn, be used to directly benefit sports fisherman.                  
                                                                               
 TAPE 95-8, SIDE B                                                             
                                                                               
 CHAIRMAN KOTT asked if the Sport Fish Division receives any money             
 at this time.                                                                 
                                                                               
 MR. BURKE replied no.  They were asking for $200,000 next year,               
 specifically to support the Earl West Cove project through the                
 Crystal Lake Hatchery.  Outside of this, they have no general                 
 funds.                                                                        
                                                                               
 Number 013                                                                    
                                                                               
 REPRESENTATIVE PORTER stated there had to be a way to craft this              
 legislation so that it didn't fall under the federal mandate.  He             
 was requesting those involved try to get around this.                         
                                                                               
 REPRESENTATIVE ROKEBERG agreed with Representative Porter.  He                
 stated that he was conceptually in full support of the council,               
 but at this stage, he would be uncomfortable moving on the bill.              
                                                                               
 Number 041                                                                    
                                                                               
 JEFF BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE AND                    
 ECONOMIC DEVELOPMENT, stated that his department favored any                  
 efforts to market Alaska in any form.   However, he regretfully               
 stated that the department would oppose this bill as it is                    
 currently written.  His concern with the bill is that essentially             
 the Alaska Tourism Marketing Council (ATMC) has always run a                  
 generic marketing campaign, but this bill sounds like the                     
 sponsors would like to essentially make marketing "target                     
 specific" for sport fish.  The concern was that the state has a               
 limited amount of marketing money available.  If they start                   
 fragmenting those efforts, by taking out $1 million for sport                 
 fish, the next people at the table would be the hotel operators               
 and other specialized groups.  He stated that he didn't oppose                
 these efforts.  If the money is there for more marketing, then                
 great.  What he opposes was that they have a finite amount of                 
 money, and he didn't want it being fragmented.  Another problem               
 he had is that it was a state entity.  If the state can raise $1              
 million and the legislature deems that they can use this for                  
 sport fish marketing, then they could do this through a grant.                
 He doesn't want the Department of Commerce and Economic                       
 Development to be creating an association for this particular                 
 industry.  He felt that this would end up having a snowball                   
 effect.                                                                       
                                                                               
 Number 190                                                                    
                                                                               
 CHAIRMAN KOTT asked if current marketing, in Alaska, within ATMC              
 or the Division of Tourism, couldn't use its own staff to assist              
 in this procurement or delineation of (indisc.).                              
                                                                               
 MR.BUSH answered, "certainly."  But, what they would be asking                
 them to do was to take on more work with an already overworked                
 staff.  This would be taking efforts away from what they do on a              
 daily basis.  Since they are working with program receipts, he                
 didn't feel it would be unreasonable to add a Marketing                       
 Coordinator.  The response he has received from the people                    
 supporting this legislation is that they don't want to create                 
 more bureaucracy.  They feel they can contract out.  They need to             
 find a person who is a specialist in advertising or marketing.                
 He said that what they need is an administrator.  He stated that              
 you need one state employee to administer this program.                       
                                                                               
 Number 160                                                                    
                                                                               
 REPRESENTATIVE ELTON stated that he was sympathetic to Mr. Bush's             
 plight.                                                                       
                                                                               
 GEORGE UTERMOHLE, ATTORNEY, LEGISLATIVE AFFAIRS AGENCY, stated                
 that the issues raised by the Department of Fish and Game, on                 
 behalf of the Federal Fish and Wildlife Service, concerns the                 
 diversion of fish and game license fees.  The state participates              
 in the federal aid program for sport fisheries.  As a result, the             
 state gets a large sum of money from the federal government.  The             
 state has to dedicate its fish and game license fees to a                     
 particular fund that can only be used for sport fishing purposes.             
 If participation in the federal program was to be suspended, we               
 would lose the ability to be able to dedicate those funds.  We                
 cannot divert the fish and game license fees to a purpose other               
 than the management of sport fisheries.  The federal regulations              
 relate only to the diversion of license fees, not to the                      
 diversion of any other state money that might go to the ADF&G or              
 the Division of Sport Fisheries.  It does not address the issue               
 of general funds.  Mr. Utermohle stated that HB 147 does not                  
 provide for any diversion from the fish and game fund.  He felt               
 there was no logic behind the position of the Fish and Wildlife               
 Service.                                                                      
                                                                               
 Number 283                                                                    
                                                                               
 REPRESENTATIVE PORTER asked if there was a similar program where              
 this problem had been addressed.  He asked if we could have the               
 existing license fee, with an additional $5 marketing surcharge               
 directed to the general fund as opposed to this other dedicated               
 fund.                                                                         
                                                                               
 MR. UTERMOHLE replied that we can't, under the terms of the                   
 federal program.  The fish and game license fee is any fee                    
 imposed upon a person which conveys the right to engage in sport              
 fishing.  If you can't go sport fishing without a sport fishing               
 marketing fee, its considered a license fee for purposes of the               
 federal program and must be dedicated to this program.                        
                                                                               
 REPRESENTATIVE ELTON said if the Sport Fish Program does not                  
 receive general funds, are they taking general funds out of a                 
 different part of the ADF&G or another department's budget?                   
                                                                               
 MR. UTERMOHLE stated that would be the case, but he didn't see                
 how that could come out of the Commercial Fisheries Division's                
 budget.  The loss to their budget in general fund dollars could               
 not be offset by money taken by the Sport Fish Program because                
 that money is restricted to sport fish purposes.  Therefore, the              
 commercial fisheries program would take a loss, and that would be             
 out of the jurisdiction of the Fish and Wildlife Service.                     
                                                                               
 BUD HODSON, OWNER, TIKCHIK NARROWS LODGE; FOUNDING MEMBER,                    
 ALASKA SPORT FISH INDUSTRY ASSOCIATION, stated that he was a                  
 proponent of this bill.  He stated that they had a mechanism to               
 be self-funding, but they are running into some roadblocks.  What             
 they are trying to establish with the marketing council is not to             
 bring more people into problem areas.  He stated that they wanted             
 to provide a vision for sport fishing and to target fisheries                 
 that were under utilized.  It also is a goal to help the industry             
 identify where it could expand or recuperate closed fisheries.                
 Their intent is not to pump more anglers into the Kenai, it is to             
 educate the public and the industry to look at what the options               
 are for helping people survive closures.  The industry and the                
 state needs to look at where they are going to be in ten years.               
                                                                               
 Number 373                                                                    
                                                                               
 DUKE BERTKE, CHELATNA LAKE LODGE; FOUNDING MEMBER, ALASKA SPORT               
 FISHING INDUSTRY ASSOCIATION, stated that the sport fishing                   
 industry was in no way trying to fragment the ATMC.  He felt they             
 could operate under the umbrella, doing value-added marketing to              
 help keep the tourists happy.  They felt they could direct people             
 out of problem areas out and into Western Alaska, Prince William              
 Sound, or parts of the valley that haven't been utilized.  The                
 funding mechanism is in no way an assault on the ADF&G or the                 
 general fund.  They felt they had something in mind to carry its              
 own weight.  They are willing to go back and do whatever it takes             
 to accomplish that goal.                                                      
                                                                               
 MITCH GRAVO, LOBBYIST, ALASKA SPORT FISHING INDUSTRY ASSOCIATION,             
 stated with respect to fragmentation issue, they do not take any              
 money from any marketing organization.  If that happens, he                   
 stated, he would ask the House and the Senate to withdraw the                 
 bill.                                                                         
                                                                               
 Number 373                                                                    
                                                                               
 BEN ELLIS, EXECUTIVE DIRECTOR, KENAI RIVER SPORT FISHING                      
 INCORPORATED, testified via teleconference.  He stated that he                
 was speaking in tentative support of HB 147, providing that the               
 funding mechanism can be addressed.  He gave the following                    
 testimony:  "Alaska contains some of the world's best sports                  
 fishing opportunities.  It is only right that the state market                
 this potential in a clear concise, accurate, and logical manner.              
 We believe that it is fair to say that, regardless of whether                 
 you're a strong advocate of commercial fisheries or a staunch                 
 supporter of sport fishing, we all agree that the states                      
 fisheries have been a crucial part of Alaska's past and will be               
 an important aspect of the state's future.  I think we can also               
 agree that Alaska's fishing footprint is changing.  Depressed                 
 prices in commercially caught fish, overseas competition from pen             
 reared salmon and the waste of hundreds of thousands of tons of               
 incidental by-catch each year has sent commercial fishing not                 
 only in Alaska but across the United States in a tailspin.  While             
 the state's commercial fishing industry is facing its toughest                
 decade ever, sport fishing has grown from a `wet behind the ears              
 toe head,' to a `full blown adult' in the state's economic                    
 employable arena.  Sport fishing continues to fuel a growing                  
 tourist economy that accounted for more than $1 billion.  In a                
 recent memo to the Governor's fisheries transition, former Deputy             
 Commissioner of the Department of Fish and Game, Chuck Meacham,               
 underlined the potential for sport fishing across the state, and              
 he quotes, `We have great challenge ahead in terms of how we                  
 promote and develop our fisheries he wrote under the section of               
 sport fishing.  Alaska contains more than 40 percent of the                   
 nation's surface water resources, while not all of our lakes and              
 streams contain sport fish resources, there are over 12,000 known             
 anadromous fish streams with 120,000 to 180,000 linear miles of               
 fresh water.  Alaska also has thousands and thousands of                      
 coastline and adjacent marine waters rich with sport fishing                  
 opportunities.  With over half of the sport fishing effort                    
 presently concentrated in the Cook Inlet Region, there is                     
 substantial area into which this industry can be encouraged to                
 expand."                                                                      
                                                                               
 MR. ELLIS continued by stating that the need for marketing a                  
 quality sport fishing experience was noted in a recent report by              
 the Governor's Fisheries Transition Team.  For the state sport                
 fishing industry to grow, it is imperative to advance the concept             
 that is behind this bill.  He stated that HB 147 will provide the             
 tool to polish this jewel in the ruff, called Alaska's sport                  
 fishing.                                                                      
                                                                               
 Number 467                                                                    
                                                                               
 PAUL DALE, representing THE KING SALMON FUND, testified via                   
 teleconference.  Mr. Dale stated that The King Salmon Fund is a               
 non-profit organization in the Kenai area interested in                       
 protecting the Kenai River habitat.  He stated that he was                    
 pleased to hear that this legislation would not increase user                 
 activity on the Kenai River; but the bill does not specifically               
 prohibit marketing increased sport fishing on the Kenny Peninsula             
 or the Kenai River.  He stated that people fishing for halibut                
 off the coast, or fishing for salmon in Seward, would be in the               
 area.  He felt that would result in increased pressure on the                 
 Kenai River.  He would feel much more comfortable with the                    
 legislation if it specifically precluded the Kenai Area from                  
 being marketed.  There should be a consensus among agency people,             
 or user participants, that we have addressed the habitat concerns             
 and developed policies and infrastructure to handle the load that             
 exists currently.                                                             
                                                                               
 Number 503                                                                    
                                                                               
 MAX LOWE, GENERAL MANAGER, REGAL ALASKAN HOTEL, testified via                 
 teleconference, that he has watched the continued positive impact             
 of the Alaska sport fishing industry on individual tourism                    
 related businesses.  He feels it imperative that tourism, sport               
 fishing, and smaller businesses have a voice in their own future,             
 especially as it relates to visitor preferred activity.  The                  
 Alaska Sport Fishing Industry Marketing Council is a good idea,               
 and it allows fair representation by all the individuals in                   
 Alaska who actually have invested in our state resources.   He                
 stated that, like any other marketing effort, it will create more             
 jobs, more revenue, and it will bolster the state of Alaska, the              
 sport fishing industry, and all related industries.                           
 Number 536                                                                    
                                                                               
 BILL SIMS, OWNER, LAKE ILLIAMNA LODGE, testified via                          
 teleconference that we need this council because the fisherman                
 that normally would come to Alaska are now traveling to foreign               
 countries that we are competing with.  He stated many of his                  
 clients are traveling to Russia because of their advertising                  
 campaigns.  He also pointed out when there are closures, we need              
 to let people know that the whole state is not being closed.  A               
 closure in the Cook Inlet area doesn't mean that Bristol Bay and              
 the Prince William Sound areas are also closed.                               
                                                                               
 BARBARA BINGHAM, MEMBER, SITKA CHARTER BOAT OPERATOR'S                        
 ASSOCIATION, testified via teleconference that, in Sitka, the                 
 state marketing of sport fishing to non-residents will aggravate              
 an already tense situation.  Many resident anglers and charter                
 operators are very concerned about local fish recourses.  She                 
 explained that, in the Southeast king salmon are allocated                    
 between commercial and sport anglers.  The proposed allocations               
 of halibut between Alaska sport and commercial users is currently             
 before the North Pacific Fisheries Management Counsel.  She noted             
 that the local Sitka's Visitor's Bureau and the private sector                
 were doing a good job marketing in Sitka                                      
                                                                               
 Number 580                                                                    
                                                                               
 JOSEPH JOLLY, BOARD MEMBER, UNITED COOK INLET DRIFT ASSOCIATION,              
 and COMMERCIAL FISHERMAN, stated that there was nothing in HB                 
 147, as it is currently written, to insure that only remote                   
 location promotion will be done.  As it stands, the people who                
 would benefit from this act would be the sport fish entities in               
 the already overworked areas with habitat problems.  He stated                
 that the commercial fisheries industry would be harmed further by             
 the reduction in raw fish taxes, jobs would be lost, and the                  
 trucking and support industries would suffer.  This, he said,                 
 would keep snowballing and the taxpayer would end up paying the               
 bill.  Mr. Jolly stated he was against HB 147.                                
                                                                               
 Number 616                                                                    
                                                                               
 KEITH JOHNSON explained he was the owner and operator of a lodge              
 in Southwest Alaska.  He stated he was in favor of HB 147.  It                
 has the potential to start the organizational business of taking              
 care of the sport fishing, guiding, and lodge activities                      
 throughout the state.  He agreed that the Kenai, Russian, Deshka,             
 et cetera, were over worked.  The way to ease that pressure would             
 be to build a road from Wasilla across the drainage ditches to                
 Talkeetna Bay.  He concluded that HB 147 would bring in money and             
 let the people in the lower 48 know that there's is organized                 
 fishing all over the state.                                                   
                                                                               
 TAPE 95-9, SIDE A                                                             
 ROD BERG, testifying via teleconference, stated HB 147 has some               
 merits; however, the ATMC, the Kenai Peninsula Tourism Council                
 and other entities, were adequately promoting all angles of                   
 tourism within the state.  He noted when the king salmon stamp                
 was added onto licenses a few years ago, funds were suppose to go             
 back into a king salmon enhancement fund.  However, 60 percent to             
 70 percent of the funds are generated in Southcentral Alaska, but             
 less the 50 percent is going back into that area.  Being from the             
 Kenai Peninsula area, he testified that he was totally opposed to             
 any more governmental involvement in the promotion of the area.               
                                                                               
 CHAIRMAN KOTT closed public testimony on HB 147, and pointed out              
 that the basic problem with the bill was the funding mechanism                
 He stated that he was hopeful that Representative Green would be              
 able to work out the funding problems and, thereafter, bring the              
 bill back before the committee.                                               
                                                                               
 Number 119                                                                    
                                                                               
 REPRESENTATIVE GREEN noted that the funding problem had been                  
 brought to his attention only just prior to the meeting.  Had he              
 known about it sooner, he stated, he wouldn't have brought the                
 bill before the committee.  He pointed out though, that it had                
 been a very beneficial meeting, addressing a wide cross section               
 of ideas.  He thanked the committee and said he would bring the               
 bill back with changes.                                                       

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