Legislature(2007 - 2008)CAPITOL 106

04/03/2007 05:30 PM House ECONOMIC DEV., TRADE, AND TOURISM


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05:29:55 PM Start
05:30:28 PM Presentation: Alaska Seafood Marketing Institute
06:17:19 PM HB217
07:45:08 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation by Alaska Seafood Marketing TELECONFERENCED
Institute (ASMI)
*+ HB 217 TOURISM DISCLOSURES AND NOTICES TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         April 3, 2007                                                                                          
                           5:29 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mark Neuman, Chair                                                                                               
Representative Carl Gatto                                                                                                       
Representative Kyle Johansen                                                                                                    
Representative Vic Kohring                                                                                                      
Representative Bob Lynn                                                                                                         
Representative Andrea Doll                                                                                                      
Representative Mike Doogan                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Lindsey Holmes                                                                                                   
Representative Bill Thomas                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
PRESENTATION:  ALASKA SEAFOOD MARKETING INSTITUTE                                                                               
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 217                                                                                                              
"An  Act relating  to required  onboard disclosures  and displays                                                               
about   tours,   flight   seeing  operations,   other   shoreside                                                               
activities, and visitors bureaus;  and providing for an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 217                                                                                                                  
SHORT TITLE: TOURISM DISCLOSURES AND NOTICES                                                                                    
SPONSOR(s): REPRESENTATIVE(s) HOLMES                                                                                            
                                                                                                                                
03/22/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/07       (H)       EDT, JUD                                                                                               
04/03/07       (H)       EDT AT 5:30 PM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RAY RUITTA, Executive Director                                                                                                  
Alaska Seafood Marketing Institute (ASMI)                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Provided the presentation on the Alaska                                                                   
Seafood Marketing Institute.                                                                                                    
                                                                                                                                
JOHN WHITE, Owner                                                                                                               
Nenana Raft Adventures                                                                                                          
Healy, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
STEVE HITES, Owner                                                                                                              
Skagway Street Car Company                                                                                                      
Skagway, Alaska                                                                                                                 
POSITION STATEMENT:   Testified in support of HB 217.                                                                           
                                                                                                                                
TOM TOUGAS, Owner                                                                                                               
Four Seasons Tours;                                                                                                             
Alaska Coach Tours                                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
BRUCE BUSTAMANTE, President                                                                                                     
Anchorage Convention and Visitors Bureau (ACVB)                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified in support of HB 217.                                                                           
                                                                                                                                
RON PECK, President and Chief Operating Officer                                                                                 
Alaska Travel Industry Association (ATIA)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified in support of HB 217.                                                                           
                                                                                                                                
PAT LUBY, Advocacy Director                                                                                                     
American Association of Retired Persons (AARP)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified during the hearing on HB 217.                                                                   
                                                                                                                                
KAREN HESS, Owner                                                                                                               
Chilkat River Adventures                                                                                                        
Haines, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
CHIP THOMA                                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 217.                                                                    
                                                                                                                                
MIKE WINDRED, Employee                                                                                                          
Alaska Travel Adventures, Inc.                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
JEREMY GEISER, Employee                                                                                                         
Gastineau Guiding;                                                                                                              
President                                                                                                                       
Juneau Chapter                                                                                                                  
Alaska Travel Industry Association (ATIA)                                                                                       
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Speaking  as  an  employee  of  Gastineau                                                               
Guiding, testified in support of HB 217.                                                                                        
                                                                                                                                
BOB JANES, Owner                                                                                                                
Gastineau Guiding                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 217.                                                                            
                                                                                                                                
BOB WYSOCKI, President and Chief Executive Officer                                                                              
Huna Totem Corporation (Huna Totem)                                                                                             
Icy Strait Point                                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 217.                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR MARK NEUMAN called the  House Special Committee on Economic                                                             
Development, International Trade and  Tourism meeting to order at                                                               
5:29:55  PM.   Representatives  Doogan, Gatto,  Doll, and  Neuman                                                             
were  present at  the call  to order.   Representatives  Kohring,                                                               
Lynn, and Johansen arrived as the meeting was in progress.                                                                      
                                                                                                                                
^Presentation:  Alaska Seafood Marketing Institute                                                                            
                                                                                                                                
5:30:28 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN announced that the  first order of business would be                                                               
a presentation by the Alaska Seafood Marketing Institute (ASMI).                                                                
                                                                                                                                
5:30:59 PM                                                                                                                    
                                                                                                                                
RAY   RUITTA,  Executive   Director,  Alaska   Seafood  Marketing                                                               
Institute  (ASMI),  showed  the  committee some  of  the  current                                                               
advertisements  broadcast nationally  on  the Food  Network.   He                                                               
highlighted that the advertisements  attempt to capitalize on the                                                               
beauty  of Alaska  and indirectly  support the  tourism industry.                                                               
He then began  his PowerPoint presentation.  Slide  one, "What is                                                               
Alaska Seafood  Marketing Institute?",  indicated that ASMI  is a                                                               
partnership of  public and private  sectors established  25 years                                                               
ago and has  been reorganized to include seven  board members who                                                               
are appointed by  the governor.  The ASMI mission  is to increase                                                               
the  economic  value of  the  Alaska  seafood resource  which  is                                                               
accomplished by promoting the seafood  industry from the point of                                                               
harvest to  the consumption  of the product.   Mr.  Ruitta stated                                                               
that  ASMI's ultimate  goal is  to encourage  consumers to  pay a                                                               
little more for a premium product.                                                                                              
                                                                                                                                
5:35:24 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked for information regarding ASMI's budget.                                                                     
                                                                                                                                
5:35:39 PM                                                                                                                    
                                                                                                                                
MR.  RUITTA  pointed  out that  Alaska  seafood  represents  $1.4                                                               
million in direct  payments to fishermen for their  harvest.  The                                                               
core  funding  for ASMI  is  provided  by  processors who  pay  a                                                               
voluntary seafood  marketing assessment amounting to  0.5 percent                                                               
of  the  first value  of  what  they  process.   This  assessment                                                               
provides about $7  million annually in core funding  that is then                                                               
used to leverage federal funding  through the U. S. Department of                                                               
Agriculture  (USDA), Foreign  Agricultural Service  Market Access                                                               
Program.   Additional funding, for  a total  FY 07 budget  of $19                                                               
million,  was provided  through  the  Alaska Fisheries  Marketing                                                               
Board and the general fund.  The  FY 08 budget is estimated to be                                                               
$16.5 million,  and this  reduction will  result in  a diminished                                                               
advertising program.                                                                                                            
                                                                                                                                
5:38:16 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN  questioned whether ASMI will  receive general funds                                                               
from the FY 08 budget.                                                                                                          
                                                                                                                                
MR. RUITTA  confirmed that $1  million in general funds  has been                                                               
requested again this year.                                                                                                      
                                                                                                                                
5:38:40 PM                                                                                                                    
                                                                                                                                
MR. RUITTA  then displayed a  pie chart illustrating  that ground                                                               
fish species provide almost 50 percent  of the total value of the                                                               
seafood marketing  assessment.  Halibut and  sablefish contribute                                                               
20 percent  of value.   There is a significant  disparity between                                                               
the  tonnage of  harvested fish  and the  commercial value.   Mr.                                                               
Ruitta stressed that  over 5 billion pounds of  Alaska seafood is                                                               
marketed.     He  then  turned   to  some  of  the   threats  and                                                               
opportunities that  face the industry.   Alaska is the  model for                                                               
the  world in  sustainability,  which is  mandated  by the  state                                                               
constitution.   Mr. Ruitta informed  the committee  that Alaska's                                                               
practices  are  similar  to   the  science  supported  principles                                                               
encouraged by the North Pacific  Fisheries Management Council and                                                               
the  future looks  good regarding  this issue.   The  question of                                                               
wild  versus  organic  is currently  creating  confusion  in  the                                                               
industry.  Some  foreign farmed seafood is  identified as organic                                                               
and ASMI is working to inform  consumers that wild is superior to                                                               
organic, and  to fight  efforts to  have the  organic designation                                                               
for U.  S. farmed fish.   Currently,  the industry is  doing well                                                               
with  the exception  of king  crab,  which, due  to imports  from                                                               
Russia, has dropped in value by 50 percent.                                                                                     
                                                                                                                                
5:42:43 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN asked  about the  challenges of  import and  export                                                               
markets.                                                                                                                        
                                                                                                                                
MR.  RUITTA said  that low  import  and high  export tariffs  are                                                               
problematic for the industry.   For example, Europe assesses a 15                                                               
percent premium on Pacific halibut,  but not on Atlantic halibut.                                                               
Valued-added products  are assessed  heavy tariffs  as well.   In                                                               
addition, China, although  a large potential market,  sets a very                                                               
high tariff on finished, rather than raw, products.                                                                             
                                                                                                                                
5:44:06 PM                                                                                                                    
                                                                                                                                
MR. RUITTA continued his presentation  by informing the committee                                                               
that  aquaculture continues  to be  a serious  challenge for  the                                                               
industry.  The  availability of farmed whitefish  varieties are a                                                               
threat  to the  pollock, halibut,  and sablefish  fisheries.   He                                                               
said  that  talapia  is  a  vegetarian  fish  that  grows  almost                                                               
anywhere, is now the fastest growing  import in the U. S. market,                                                               
and  will threaten  the value  of cod  and halibut.   Mr.  Ruitta                                                               
explained that  Alaska harvests 5  billion pounds of  seafood but                                                               
only provides  2 percent of  the world's supply.   This disparity                                                               
is due to the high  cost of transportation and processing; Alaska                                                               
can only compete  at the higher level of premium  valued fish and                                                               
not on a commodity basis.   For example, the salmon harvest stays                                                               
within  the  range of  biological  limits  and is  a  sustainable                                                               
resource;  however,   the  aquaculture  industry  can   grow  its                                                               
harvest, and Alaska can not  grow the salmon harvest.  Similarly,                                                               
Alaska's pollock harvest is stable,  whereas, the talapia harvest                                                               
continues to grow and will drive the price of pollock down.                                                                     
                                                                                                                                
5:47:09 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN asked  for clarification  on how  the world  market                                                               
brings  the  prices   down  for  the  fish   caught  by  Alaska's                                                               
commercial fishermen.                                                                                                           
                                                                                                                                
MR. RUITTA  further explained that  the global seafood  market is                                                               
growing due  to the  large number of  aquaculture products.   Mr.                                                               
Ruitta returned  to the subject  of challenges  and opportunities                                                               
to the  industry.  He  said that  consumers around the  world are                                                               
interested  in healthful  eating and  in the  value of  omega 3s.                                                               
Wild seafood  is accepted  to be  the best  source for  omega 3s,                                                               
though other options are becoming  available.  However, confusion                                                               
over  seafood contaminants  impairs the  market.   The ASMI  must                                                               
continue   to  emphasize   that   Alaska's   seafood  is   nearly                                                               
contaminant  free and  to  work closely  with  the Department  of                                                               
Health  and   Social  Services  (HESS)  and   the  Department  of                                                               
Environmental   Conservation   (DEC)   to   provide   information                                                               
regarding the safety of Alaska's  seafood.  Mr. Ruitta reiterated                                                               
that  the seafood  prices, particularly  halibut, are  doing well                                                               
with the  exception of king crab.   It is extremely  difficult to                                                               
compete  with nations  such  as China,  Norway,  and Chile,  that                                                               
spend millions  of dollars for  seafood marketing.   In addition,                                                               
Alaska's   geographic  distance   from  its   market  drives   up                                                               
production cost.                                                                                                                
                                                                                                                                
5:52:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked whether farmed fish  have a different                                                               
colored flesh than wild fish.                                                                                                   
                                                                                                                                
MR.  RUITTA answered  yes, artificial  additives are  put in  the                                                               
feed to change the flesh to red.                                                                                                
                                                                                                                                
5:52:41 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked whether ASMI  marketing has resulted in higher                                                               
prices for halibut.                                                                                                             
                                                                                                                                
MR. RUITTA responded  that ASMI has established  a powerful brand                                                               
name  for Alaska's  seafood; however,  to determine  the specific                                                               
impact is  difficult.   He pointed  out that  the rise  in prices                                                               
coincides  with ASMI's  active marketing  campaign.   Mr.  Ruitta                                                               
returned  to the  PowerPoint  presentation.   He  noted that  the                                                               
value of  seafood has  steadily increased,  not from  volume, but                                                               
from higher prices,  and that the expectation is  that revenue in                                                               
2006 will  be equally high  or higher.  Specifically,  the salmon                                                               
prices are returning to their highest levels.                                                                                   
                                                                                                                                
5:56:18 PM                                                                                                                    
                                                                                                                                
MR. RUITTA then described  ASMI's international marketing efforts                                                               
in Japan, China, and the European  Union (EU).  Japan is Alaska's                                                               
largest international  seafood customer;  however, for  the first                                                               
time, the  EU imported more salmon  than Japan.  He  said this is                                                               
an indication of Europe's renewed  interest in seafood and ASMI's                                                               
diverse international marketing campaign.                                                                                       
                                                                                                                                
5:57:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN recalled  his opportunity to go  to Japan for                                                               
the Special Olympics  and he said that he was  hosted in Tokyo by                                                               
ASMI.  He expressed his  impression that ASMI representatives are                                                               
very knowledgeable of their products and of the Japanese market.                                                                
                                                                                                                                
5:59:01 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN  requested  that Mr.  Ruitta  describe  a  European                                                               
marketing tour.                                                                                                                 
                                                                                                                                
MR. RUITTA described the European  Seafood Show that will be held                                                               
in  Brussels  in  May,  2007.    He  noted  that  sales  directly                                                               
following  last  year's  show   amounted  to  approximately  $104                                                               
million.  The cost to  sponsor the show is approximately $400,000                                                               
to $500,000.                                                                                                                    
                                                                                                                                
6:00:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN asked how ASMI  and World Trade Center Alaska                                                               
work together.                                                                                                                  
                                                                                                                                
MR.  RUITTA replied  that  ASMI  exchanges marketing  information                                                               
with World  Trade Center  Alaska and  the Alaska  Travel Industry                                                               
Association (ATIA) whenever possible.                                                                                           
                                                                                                                                
6:01:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL  asked whether  ASMI works  with any  type of                                                               
regulatory agency.                                                                                                              
                                                                                                                                
MR. RUITTA answered that ASMI's  technical program works with the                                                               
U. S.  Food and Drug Association  (FDA), the U. S.  Department of                                                               
Agriculture   (USDA,   and   the  United   Nations   Alimentarius                                                               
Commission  (Codex), which  set  standards for  food quality  and                                                               
safety.  Although  ASMI has no regulatory powers, it  serves as a                                                               
resource   to  the   industry  and   to   state,  national,   and                                                               
international agencies.                                                                                                         
                                                                                                                                
6:02:33 PM                                                                                                                    
                                                                                                                                
MR. RUITTA further  described the European Union as  a mixture of                                                               
mature  and  emerging  markets,  including  the  United  Kingdom,                                                               
Russia, Eastern  Europe, Czechoslovakia,  and Ukraine.   China is                                                               
still  an  emerging market  and  ASMI  is maintaining  an  active                                                               
presence  there as  China  begins  to increase  the  size of  its                                                               
middle class.   Mr.  Ruitta pointed out  that in  countries where                                                               
ASMI is  marketing, seafood  demand has grown  by 44  percent; in                                                               
countries lacking an  ASMI campaign, seafood demand  has grown by                                                               
24 percent.   The U.S.  market is also growing,  particularly for                                                               
sockeye.  Many U. S.  consumers are re-discovering Alaska seafood                                                               
and ASMI is advertising heavily in  the U. S. in magazines and on                                                               
television.  Television  advertising began for the  first time on                                                               
the  Food Network  in 2006,  and has  increased ASMI's  marketing                                                               
presence  by  five-fold.    Television  advertising  reaches  193                                                               
million households  and the target  audience is women  aged 35-54                                                               
and  with  a  household  income of  over  $75,000.    Advertising                                                               
campaigns  will  often  tie  in with  the  tourism  industry  and                                                               
include cruise promotions.   Mr. Ruitta concluded  by saying that                                                               
a  consumer is  77  percent  more likely  to  purchase salmon  or                                                               
halibut  from  Alaska  than  from another  source.    Thus,  ASMI                                                               
believes  it is  contributing  to the  rising  value of  Alaska's                                                               
seafood.    Present  and  future ASMI  marketing  will  focus  on                                                               
foreign consumers,  in promoting the purchase  of frozen seafood,                                                               
and on  continuing the  message that wild  Alaska seafood  is the                                                               
best in the world.                                                                                                              
                                                                                                                                
6:09:19 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN recognized  Representative Thomas  as a  commercial                                                               
fisherman and  asked him  to advise the  committee about  how the                                                               
legislature can assist the commercial fishing industry.                                                                         
                                                                                                                                
6:09:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BILL THOMAS,  Alaska  State Legislature,  drawing                                                               
upon  his many  years of  experience as  a commercial  fisherman,                                                               
informed  the committee  that  ASMI's efforts  have  led to  more                                                               
money for  fisherman.  He  pointed out that the  fishing industry                                                               
pays a 3 percent  raw fish tax of which 1.5  percent stays in the                                                               
local  communities.    Representative   Thomas  opined  that  the                                                               
legislature should  continue its support  of ASMI and  the Alaska                                                               
Department of  Fish & Game (ADF&G).   The ADF&G needs  funding to                                                               
complete  research  and  fish  surveys.    Representative  Thomas                                                               
recalled that last  year an additional $120,000  was allocated to                                                               
ADF&G for ground  crab research and the result  was an additional                                                               
three weeks of fishing.                                                                                                         
                                                                                                                                
6:12:13 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN asked whether the  Alaska Industrial Development and                                                               
Export Authority (AIDEA) was  assisting commercial fisherman with                                                               
refrigerated salt water and flash-freezing.                                                                                     
                                                                                                                                
REPRESENTATIVE THOMAS  replied that  federal and state  funds are                                                               
available for fisherman.  He pointed  out that it is incumbent on                                                               
the  fisherman,  with  or without  incentives,  to  maintain  the                                                               
quality of the fish and protect the market.                                                                                     
                                                                                                                                
6:13:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN asked  whether  fishermen are  concerned                                                               
about fish quality.                                                                                                             
                                                                                                                                
REPRESENTATIVE THOMAS  replied yes, and  said that how a  fish is                                                               
handled determines its marketability.                                                                                           
                                                                                                                                
REPRESENTATIVE  JOHANSEN   further  asked  whether   the  fishing                                                               
industry  is  responding  to  the   fact  that  fish  quality  is                                                               
important.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  THOMAS replied  yes; his  partnership with  Ocean                                                               
Beauty requires  ice and bleeding at  the time of the  catch, and                                                               
fish quality is the key to the industry's success.                                                                              
                                                                                                                                
6:16:16 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN thanked the presenter and Representative Thomas.                                                                   
                                                                                                                                
HB 217-TOURISM DISCLOSURES AND NOTICES                                                                                        
                                                                                                                                
6:17:19 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN announced that the  final order of business would be                                                               
HOUSE  BILL  NO.  217,  "An  Act  relating  to  required  onboard                                                               
disclosures and  displays about tours, flight  seeing operations,                                                               
other shoreside  activities, and visitors bureaus;  and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
6:18:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN  moved that the committee  adopt Amendment 1,                                                               
which read:                                                                                                                     
                                                                                                                                
     Page 2, line 1                                                                                                             
          After "other alternatives may available":                                                                             
               Insert "for a higher or lower price"                                                                             
                                                                                                                                
[Although not  formally stated,  line 2  of the  amendment reads:                                                               
After "other alternatives may be available":]                                                                                   
                                                                                                                                
REPRESENTATIVE LYNN informed the committee  that Amendment 1 is a                                                               
friendly  amendment   and  will  ensure  that   the  cruise  ship                                                               
passenger understands that other  alternative tours are available                                                               
for a higher or lower cost.                                                                                                     
                                                                                                                                
REPRESENTATIVE  GATTO objected.   He  expressed his  concern that                                                               
there would  be few  instances when the  price of  an alternative                                                               
tour will  be higher and  many instances  when the price  will be                                                               
lower.   The implication  of equal weight  to the  words "higher"                                                               
and  "lower" gives  little useful  information to  the purchaser.                                                               
Representative Gatto suggested striking the word "higher".                                                                      
                                                                                                                                
REPRESENTATIVE LYNN,  after discussion, noted that  the amendment                                                               
to Amendment 1 would strike the words "higher or".                                                                              
                                                                                                                                
6:20:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LINDSEY  HOLMES, Alaska State  Legislature, stated                                                               
that she is  amenable to action on Amendment 1,  as amended.  She                                                               
said that  the purpose of  HB 217 is  to implement the  intent of                                                               
the   Alaska  Cruise   Ship  Initiative   and  avoid   unintended                                                               
consequences.                                                                                                                   
                                                                                                                                
6:22:18 PM                                                                                                                    
                                                                                                                                
There  being  no objection,  the  Amendment  to Amendment  1  was                                                               
adopted.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO withdrew his objection to Amendment 1.                                                                     
                                                                                                                                
There being no objection, Amendment 1, as amended, was adopted.                                                                 
                                                                                                                                
6:23:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES explained  that the intent of HB  217 is to                                                               
implement the intent  of the voters who passed  the Alaska Cruise                                                               
Ship   Initiative   ("initiative")  while   avoiding   unintended                                                               
consequences.  She noted that  the bill adds a second alternative                                                               
disclosure  requirement for  tour operators  that sell  tours on-                                                               
board  the cruise  ships.   The  alternative  requires that  tour                                                               
operators disclose  the existence  of a  paid promotion  and that                                                               
other options  may be available in  the port of call  for a lower                                                               
price.  In  addition, the cruise ship passenger  is given contact                                                               
information for the  convention and visitors bureau  in each port                                                               
of call.  Representative Holmes  expressed her belief that HB 217                                                               
complies  with the  voter pamphlet  language  of the  initiative,                                                               
with  the  language  on  the  initiative  ballot,  and  with  the                                                               
initiative  sponsor  statement.   She  added  that the  committee                                                               
packets include many  letters of support for HB 217  and that her                                                               
office   has   not   received    any   letters   in   opposition.                                                               
Representative   Holmes  concluded   that  the   intent  of   the                                                               
initiative  was not  to harm  local  Alaska businesses;  however,                                                               
unintended  consequences  result  in the  disclosure  of  pricing                                                               
structures of  local businesses and  will limit their  ability to                                                               
compete.    This  legislation addresses  the  aforementioned  and                                                               
informs the consumer of his or her options.                                                                                     
                                                                                                                                
6:27:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL remarked:                                                                                                   
                                                                                                                                
     What I  want to do is  just sort of clarify  where this                                                                    
     comes inside the initiative ...  it is actually on page                                                                    
     6b, "A  person or  other entity  aboard a  cruise ship,                                                                    
     conducting  or making  a sale  of tours,  flight seeing                                                                    
     operations  or   other  shore-side  activities   to  be                                                                    
     delivered by  a vendor or other  entity, shall disclose                                                                    
     both orally and in writing  the amount of commission or                                                                    
     percentage of  the total sale  retained or  returned to                                                                    
     the  ... person  making  the  sale."   ...  That is,  I                                                                    
     think,  what we're  looking at  right now  in terms  of                                                                    
     intent of the initiative....                                                                                               
                                                                                                                                
6:29:21 PM                                                                                                                    
                                                                                                                                
JOHN  WHITE,   Owner,  Nenana   Raft  Adventures,   informed  the                                                               
committee  that  this  particular  initiative  is  flawed.    His                                                               
company pays a  20 percent commission to the  cruise industry and                                                               
to other local  travel agents and he expressed  his concern about                                                               
the  disclosure of  the wholesale  pricing  arrangements for  his                                                               
white-water  rafting   company.    Mr.  White   said  that  other                                                               
industries  make  arrangements  for   discounts  based  on  sales                                                               
volume.  He  noted that he has  lived in Alaska for  32 years and                                                               
that the  initiative was heavy-handed revenge  against the cruise                                                               
industry.  In the white-water  rafting industry, discounts result                                                               
in discounts  to safety  and the  cruise ships  require stringent                                                               
safety procedures from the tours  they book.  Mr. White concluded                                                               
by saying that  cruise ship passengers account  for two-thirds of                                                               
his  business  and the  disclosure  of  his confidential  pricing                                                               
information is an intrusion on small business owners.                                                                           
                                                                                                                                
6:33:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked  whether Mr. White feels  that the 90-                                                               
day Session Initiative is flawed.                                                                                               
                                                                                                                                
MR.  WHITE  replied  yes.    He  added  that  he  felt  that  the                                                               
legislature is the best judge of  the amount of time necessary to                                                               
complete its business.                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO  remarked that if the  initiative is flawed,                                                               
that would  mean that the  voters are flawed  in their vote.   He                                                               
expressed his  belief that the  voters tell the  legislature what                                                               
they want  and the  legislature must deal  with what  voters have                                                               
asked it  to do, rather than  search for a way  to circumvent the                                                               
vote.   He  said that  his respect  for the  voters supports  his                                                               
inclination to not make changes in the initiative.                                                                              
                                                                                                                                
6:35:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   LYNN  asked   whether   the  rafting   company's                                                               
arrangement with the cruise ships included limits of liability.                                                                 
                                                                                                                                
MR.  WHITE responded  that the  standard  practice for  liability                                                               
insurance  is that  the booking  agents are  named as  additional                                                               
insured;  however, essentially  the service  provider is  liable.                                                               
Mr.  White expressed  his belief  that there  is a  need for  the                                                               
regulation of  rafting and kayaking  companies, and  repeated his                                                               
concern that a lower price can mean an unsafe operation.                                                                        
                                                                                                                                
6:39:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOLL  expressed  concerns   with  regard  to  the                                                               
constitutionality of  the initiative and  thus wanted that  to be                                                               
addressed.                                                                                                                      
                                                                                                                                
CHAIR  NEUMAN told  the committee  that there  will be  testimony                                                               
from the Department of Law at a later date.                                                                                     
                                                                                                                                
6:40:15 PM                                                                                                                    
                                                                                                                                
STEVE  HITES, owner,  Skagway Street  Car  Company, informed  the                                                               
committee that he is a 34-year  resident of Skagway and the owner                                                               
of a Skagway sightseeing company.   He said that his business has                                                               
grown with  the market, has  five year-around employees,  and has                                                               
been in  business for 21  years.  He said  that he felt  that the                                                               
disclosure statement in  the initiative goes far  beyond what the                                                               
voters  intended.    He  noted  that  other  businesses  are  not                                                               
required to disclose prices.  He  stated that his concern is that                                                               
his family business  and other tourism businesses  that work with                                                               
the  cruise lines  will be  forced to  disclose confidential  and                                                               
negotiated pricing to consumers and  competitors.  This bill will                                                               
offer an  alternative choice that  still meets the spirit  of the                                                               
disclosure initiative.   Mr.  Hites concluded  that parts  of the                                                               
initiative were not  clearly stated for the public  and, thus, HB
217  will  correct  unforeseen   ramifications.    He  urged  the                                                               
committee to consider supporting HB 217.                                                                                        
                                                                                                                                
6:44:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO remarked:                                                                                                  
                                                                                                                                
     I'm going  to give  you a statement  that I  have here;                                                                    
     [reading] "Since 1994 Alaska  law has required oral and                                                                    
     written disclosure  to passengers by cruise  lines when                                                                    
     they  receive  commissions  for  promoting  shore-based                                                                    
     tours."   That,  that  statement is  a pretty  powerful                                                                    
     statement, because as a person  who's bought 15 tickets                                                                    
     on the  cruise lines,  I can promise  you I  have never                                                                    
     seen that disclosure. ... What  the initiative has done                                                                    
     ... is to it set out  as clearly as possible that since                                                                    
     they  did not  observe the  requirement that  maybe the                                                                    
     requirement   was  not   clear  to   the  cruise   ship                                                                    
     operators....                                                                                                              
                                                                                                                                
6:45:57 PM                                                                                                                    
                                                                                                                                
TOM TOUGAS,  Owner, Four  Seasons Tours  and Alaska  Coach Tours,                                                               
said that he and his wife  operate a tour business offering tours                                                               
in  Seward,  Juneau, Ketchikan  and  Skagway.   He  informed  the                                                               
committee that the initiative puts  his company at a disadvantage                                                               
in its  negotiations with the cruise  lines due to the  fact that                                                               
his  company gives  different prices  to different  cruise lines.                                                               
The  disclosure,  he  said, harms  small  Alaska  businesses  and                                                               
benefits  the cruise  lines  who will  now  compare pricing  with                                                               
other operators.  Mr. Tougas  expressed his concern that the time                                                               
necessary for  the oral  disclosure will  slow the  sales process                                                               
and hurt business.  He suggested  that the changes in HB 217 have                                                               
more impact on helping Alaska  businesses and less on hurting the                                                               
cruise lines.                                                                                                                   
                                                                                                                                
6:48:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  expressed   his  understanding  that  the                                                               
initiative requires  the shoreside  tour operator to  disclose to                                                               
the consumer  how much  the operator receives  from the  price of                                                               
the tour.                                                                                                                       
                                                                                                                                
MR. TOUGAS  responded that  the assumption  is that  the consumer                                                               
must be told what percentage  or amount that the operator retains                                                               
from the price of  the tour.  It is important  to know, he added,                                                               
that  the  cruise  lines  are  doing all  of  the  marketing  and                                                               
accounting and, thereby, earn a commission.                                                                                     
                                                                                                                                
REPRESENTATIVE HOLMES clarified that,  as written, the initiative                                                               
requires the  disclosure of the  amount of the commission  or the                                                               
percentage of  the total  sale.   She gave an  example of  a tour                                                               
that cost  $100, with  a commission  of 20  percent or  $20, that                                                               
would reveal  to the consumer the  wholesale cost of the  tour to                                                               
be $80.                                                                                                                         
                                                                                                                                
MR.  TOUGAS added  that the  commission may  not be  a consistent                                                               
amount when it is based on the volume of tickets sold.                                                                          
                                                                                                                                
6:52:41 PM                                                                                                                    
                                                                                                                                
BRUCE  BUSTAMANTE, President,  Anchorage Convention  and Visitors                                                               
Bureau (ACVB),  informed the  committee that  the ACVB  has 1,250                                                               
members  and  its  mission  is  to build  and  grow  the  tourism                                                               
industry in Southcentral  Alaska.  He said that  ACVB's review of                                                               
the  initiative  revealed  that the  disclosure  section  of  the                                                               
initiative  was damaging  and  punitive to  its  large and  small                                                               
members.  Mr.  Bustamante noted that the ACVB  board of directors                                                               
has issued a  resolution in support of HB 217,  and copies of the                                                               
resolution have been submitted to members of the legislature.                                                                   
                                                                                                                                
6:55:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOOGAN asked whether the  ACVB was involved in the                                                               
campaign against the initiative.                                                                                                
                                                                                                                                
MR.   BUSTAMANTE   replied  yes.      In   further  response   to                                                               
Representative Doogan,  he said  that the [disclosure  issue] did                                                               
come up during campaign.                                                                                                        
                                                                                                                                
REPRESENTATIVE  DOOGAN  referred  to the  $2  million  television                                                               
campaign and  asked whether this  argument should have  been made                                                               
prior to Election Day.                                                                                                          
                                                                                                                                
MR.  BUSTAMANTE said  yes.   However,  HB 217  will mitigate  the                                                               
potential damage to Alaska business.                                                                                            
                                                                                                                                
CHAIR NEUMAN  noted that  he was  contacted about  the initiative                                                               
prior to the election.                                                                                                          
                                                                                                                                
6:58:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked Mr.  Bustamante whether the disclosure                                                               
was "the worst part" of the initiative.                                                                                         
                                                                                                                                
MR. BUSTAMANTE  replied that the  disclosure has the  most impact                                                               
on  small businesses.   However,  the initiative  causes problems                                                               
throughout  an  industry  that brings  one  million  visitors  to                                                               
Alaska each year and is a big part of its economy.                                                                              
                                                                                                                                
REPRESENTATIVE  GATTO  stated  that  the  growth  in  the  cruise                                                               
industry is  fairly substantial.   He asked whether the  ACVB has                                                               
objections to  the establishment of  the Ocean Ranger  program or                                                               
to other parts of the initiative.                                                                                               
                                                                                                                                
MR. BUSTAMANTE  responded that all  four parts of  the initiative                                                               
can  harm the  growth of  the tourism  industry in  Alaska.   The                                                               
cruise industry  is the  state's biggest  partner in  tourism and                                                               
Alaska needs to  ensure that it remains competitive  and does not                                                               
layer costs on its product.                                                                                                     
                                                                                                                                
7:00:53 PM                                                                                                                    
                                                                                                                                
RON PECK,  President, and Chief Operating  Officer, Alaska Travel                                                               
Industry  Association  (ATIA),  testified  that  ATIA  represents                                                               
1,050  small and  large businesses.   The  board of  directors of                                                               
ATIA has  passed a  resolution in  support of HB  217.   Mr. Peck                                                               
read the resolution  and concluded by saying  that the initiative                                                               
undermines the basic business model of tour programs.                                                                           
                                                                                                                                
7:02:33 PM                                                                                                                    
                                                                                                                                
[Although not formally stated the  gavel was passed to Vice Chair                                                               
Lynn]                                                                                                                           
                                                                                                                                
VICE CHAIR LYNN inquired as to  what portion of the initiative is                                                               
of most concern to ATIA.                                                                                                        
                                                                                                                                
MR. PECK  responded that  ATIA is specifically  in support  of HB
217 and that the ATIA board  has only taken a position to request                                                               
modification  of  the  disclosure   portion  of  the  initiative.                                                               
Through  HB  217,  a  modification  is made  which  is  good  for                                                               
business in Alaska and fulfills the intent of initiative.                                                                       
                                                                                                                                
7:04:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN  expressed his  desire for  the committee                                                               
to  focus  only  on  HB  217  and  to  not  continue  a  "fishing                                                               
expedition."                                                                                                                    
                                                                                                                                
VICE CHAIR LYNN acknowledged Representative Johansen's comment.                                                                 
                                                                                                                                
[Although not formally stated Vice  Chair Lynn returned the gavel                                                               
to Chair Neuman]                                                                                                                
                                                                                                                                
7:05:17 PM                                                                                                                    
                                                                                                                                
MR. PECK  urged the committee to  move forward with HB  217 as it                                                               
will  continue to  support small  businesses within  Alaska.   He                                                               
then read from an Alaska Daily News article.                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO objected to the testimony.                                                                                 
                                                                                                                                
7:06:24 PM                                                                                                                    
                                                                                                                                
PAT  LUBY, Advocacy  Director,  American  Association of  Retired                                                               
Persons (AARP),  informed the committee  that AARP of  Alaska has                                                               
no  position  on  HB  217  at   this  time  and  will  need  more                                                               
information  with regard  to the  impact on  consumers.   He said                                                               
that AARP's  standard on  evaluating bills  is normally  that the                                                               
more consumer  information available,  the better  it is  for the                                                               
consumer.   This bill,  he said, seems  to limit  the information                                                               
available  to the  consumer and  he requested  clarification from                                                               
Representative Holmes.                                                                                                          
                                                                                                                                
7:08:29 PM                                                                                                                    
                                                                                                                                
KAREN  HESS,  owner,  Chilkat   River  Adventures,  informed  the                                                               
committee that passage  of HB 217 is vital to  her business.  She                                                               
noted  that she  has submitted  additional written  testimony for                                                               
members to review in their committee  packets.  Ms. Hess told the                                                               
committee that,  in 1991, she and  her husband choose to  begin a                                                               
small tourism  business with  their savings and  hard work.   She                                                               
said that  she was  asking for protection  for her  business, and                                                               
for  all future  businesses, from  the impact  of the  disclosure                                                               
statement.  Ms. Hess expressed  her belief in free enterprise and                                                               
the American  value of opportunities  for private business.   She                                                               
stated  that   virtually  every  business  in   America  operates                                                               
according  to   the  principles  of  free   enterprise,  and  the                                                               
initiative is  discriminatory to Alaska  tourism.  Ms.  Hess read                                                               
from the Alaska Constitution of  the State of Alaska, Article 1.,                                                               
Declaration of Rights,  subsection 1, Inherent Rights.   Ms. Hess                                                               
stated  that the  disclosure  statement does  not  allow her  the                                                               
enjoyment  of the  rewards of  her industry  or equal  rights and                                                               
opportunities.  In fact, the  disclosure requirement violates her                                                               
right to  privacy and  confidentiality.   She expressed  her hope                                                               
that the committee will support HB 217.                                                                                         
                                                                                                                                
7:12:42 PM                                                                                                                    
                                                                                                                                
CHIP THOMA  testified that he  is in support  of HB 217  with one                                                               
recommendation.  He  commented that HB 217 attempts  to devise an                                                               
alternate  system of  public disclosure  regarding the  choice of                                                               
tours.  However,  the bill does not address the  many local tours                                                               
and activities  that are  purchased prior  to the  actual cruise.                                                               
He  pointed  out  that  the  initiative  does  not  affect  these                                                               
purchases either;  in fact,  the language  of the  initiative was                                                               
designed  for  consumer  protection  of  the  passenger  on-route                                                               
because many  local businesses are not  advertised or recommended                                                               
on-board the ships.   It is estimated that  in northern Southeast                                                               
$250 million  of business is  done by shore-based  tours annually                                                               
and this  amounts to a $50  million profit to cruise  lines.  Mr.                                                               
Thoma said that  this amount is generally off  the books, because                                                               
there  are no  ship  taxes or  reporting  requirements for  shore                                                               
trips.    Ship passengers,  he  said,  should  have a  choice  of                                                               
activities and the ability to  shop for inexpensive tours because                                                               
that  is the  basis of  consumer  protection.   He recommended  a                                                               
change  to HB  217; on  page 1,  line 13,  change "or"  to "and."                                                               
This  change will  preserve the  consumer protection  language in                                                               
the initiative,  enable cruise passengers  to search  further for                                                               
local activities, and thereby, satisfy all parties.                                                                             
                                                                                                                                
7:17:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHANSEN   asked  whether  HB  217   changes  the                                                               
language of the initiative that was approved by the voters.                                                                     
                                                                                                                                
MR. THOMA said he believes it does.                                                                                             
                                                                                                                                
REPRESENTATIVE   JOHANSEN  expressed   his   concern  about   the                                                               
potential  impact of  changing one  word [in  an amendment].   He                                                               
said  that  he   also  has  a  problem  with   the  reference  to                                                               
"kickbacks"  by  local  tour operators  and  requested  that  Mr.                                                               
Thoma's written  testimony be  re-drafted with  less inflammatory                                                               
language.                                                                                                                       
                                                                                                                                
7:19:43 PM                                                                                                                    
                                                                                                                                
MIKE  WINDRED, employee,  Alaska Travel  Adventures, Inc.  (ATA),                                                               
said that ATA operates 15  shore excursions and books travel with                                                               
the cruise  line passengers and  with independent travelers.   He                                                               
expressed his support of HB 217.   Mr. Windred explained that ATA                                                               
has developed its  pricing structure since its  beginnings in the                                                               
1980s and  that transparency to  consumers has to do  with retail                                                               
prices, rather than pricing structures.   For example, ATA's Gold                                                               
Creek  Salmon Bake  does not  receive many  complaints about  the                                                               
price,  but he  believes that  passengers will  begin to  compare                                                               
mark-ups and  will subsequently stay on  board to eat.   He urged                                                               
the committee to  move HB 217 on to the  House Judiciary Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
7:22:27 PM                                                                                                                    
                                                                                                                                
JEREMY  GEISER,  employee of  Gastineau  Guiding  and the  Juneau                                                               
Chapter  president  of  the Alaska  Travel  Industry  Association                                                               
(ATIA), speaking  as an employee  of Gastineau  Guiding, informed                                                               
the  committee  that   the  pre-election  television  advertising                                                               
campaign  was too  expensive  to be  conducted  by small  tourism                                                               
businesses.  This  bill, he said, will support the  intent of the                                                               
original  initiative,  will  benefit local  businesses  and  will                                                               
promote the  tourist's use of  the local convention  and visitors                                                               
bureaus.  Mr. Geiser told  the committee that the local operators                                                               
want  to  add  language  that  supports the  measure  as  it  was                                                               
originally proposed.                                                                                                            
                                                                                                                                
7:25:36 PM                                                                                                                    
                                                                                                                                
BOB JANES, Owner,  Gastineau Guiding, testified in  support of HB
217.  He  said that his company is a  local family-owned business                                                               
and  is an  established and  commissioned service  to the  cruise                                                               
industry.   Mr. Janes  clarified that  commissions to  the cruise                                                               
lines  are paid  by check  or  electronic deposit  and local  and                                                               
federal taxes are paid.  He  expressed his belief that the HB 217                                                               
legislation not  perfect, but it is  a good step to  bringing the                                                               
language closer to the intent of the initiative.                                                                                
                                                                                                                                
7:27:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DOLL asked  whether Mr. Janes had  taken a cruise,                                                               
and if  so, had  felt the  need for the  disclosure of  costs for                                                               
shore excursions.                                                                                                               
                                                                                                                                
MR. JANES  answered that he took  his first cruise this  year and                                                               
in one  port purchased a shore  excursion on the ship.   He noted                                                               
that  the benefit  to  buying a  more  expensive shore  excursion                                                               
affiliated  with the  ship is  that the  ship will  wait if  your                                                               
party is late returning to the dock.   Mr. Janes added that he is                                                               
opposed to  the lower  price amendment  because the  services and                                                               
reliability of the excursion may be lower as well.                                                                              
                                                                                                                                
7:30:06 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN advised  the committee members that  a legal opinion                                                               
will be requested regarding the change suggested by Mr. Thoma.                                                                  
                                                                                                                                
7:30:19 PM                                                                                                                    
                                                                                                                                
BOB WYSOCKI,  President, and Chief Executive  Officer, Huna Totem                                                               
Corporation  (Huna   Totem),  Icy  Strait  Point,   informed  the                                                               
committee  that   Icy  Strait  Point  is   Huna  Totem's  largest                                                               
investment and is  the only private port in Alaska.   Mr. Wysocki                                                               
noted  that as  a private  port  owner, Huna  Totem has  invested                                                               
millions of  dollars to market  the Icy Strait  Point destination                                                               
and attract  the cruise ship  market.   This is a  very different                                                               
business  model,  he  explained,  and requires  that  Huna  Totem                                                               
recover its  investment through tour  sales.  Icy  Straight Point                                                               
has no convention and visitors  bureau or other independent tours                                                               
operating on the site.  Huna  Totem's local economic impact is an                                                               
annual payroll of  $1.5 million and employment  for the residents                                                               
of Hoonah.   All economic  activity in  Hoonah is related  to the                                                               
evolution  of Icy  Strait Point.   Mr.  Wysocki stated  that Huna                                                               
Totem's business has  grown from 32 visits by cruise  ships to 80                                                               
expected visits  this year,  and he related  his support  for the                                                               
disclosure of Huna Totem's relationship  with the cruise ships as                                                               
disclosure promotes safe and quality  programs.  He said that the                                                               
cruise industry earns its funds  by marketing programs, receiving                                                               
bookings, and collecting  revenues.  Huna Totem  does not support                                                               
the  disclosure  of  its  business   margins.    He  stated  that                                                               
encouraging   ruthless    competition   based    on   proprietary                                                               
information can not be helpful  to Alaskans and small businesses.                                                               
Consumer  demand  is driven  by  the  quality  and value  of  the                                                               
product, not  by margins, commissions,  or efficiency  of volume.                                                               
Huna Totem  has made an  investment in the community,  the state,                                                               
and the  people of Alaska, and  fully supports HB 217.   However,                                                               
for Icy Strait  Point as a unique port, the  reference to a local                                                               
convention  and  visitor  bureau  does not  apply,  and  thus  he                                                               
requested an amendment.                                                                                                         
                                                                                                                                
7:37:44 PM                                                                                                                    
                                                                                                                                
CHAIR  NEUMAN requested  that Mr.  Wysocki submit  his suggestion                                                               
for an  amendment to Representative  Holmes.  Chair  Neuman noted                                                               
that the  legislative process is  a discovery process  and issues                                                               
need to be studied  in depth.  He then read the  names of some of                                                               
the businesses  present and asked for  a show of hands  as to how                                                               
many support HB  217.  Chair Neuman noted  that galley opposition                                                               
to the bill was nominal.                                                                                                        
                                                                                                                                
7:39:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO  stated   that  approximately  one  million                                                               
passengers  a  year  come  to   Alaska;  however,  they  are  not                                                               
represented by today's testimony.   The initiative was to address                                                               
the concerns  of those visiting  the state and  thereby, affected                                                               
those running the tourism businesses  in the state.  He expressed                                                               
his  belief that  visitors desire  transparency.   The initiative                                                               
was inspired by the concerns of  an owner of a flight service who                                                               
stated that  40 percent of her  profit was paid to  cruise ships.                                                               
In  addition, she  expressed her  fear that  the cruise  industry                                                               
would refuse to sell her tours  if her concerns were made public.                                                               
Representative  Gatto said  that this  bill tends  to modify  the                                                               
initiative  and that  he is  very cautious  when the  legislature                                                               
attempts to change  an initiative passed by a vote  of the people                                                               
of the state.                                                                                                                   
                                                                                                                                
                                                                                                                                
7:42:35 PM                                                                                                                    
                                                                                                                                
CHAIR NEUMAN stated that further testimony must refer to HB 217.                                                                
                                                                                                                                
7:43:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DOOGAN  opined that  discussion  of  HB 217  must                                                               
include  discussion  of the  intent  of  the initiative,  and  he                                                               
requested  to  see  authorization   that  permits  the  chair  to                                                               
restrict debate.                                                                                                                
                                                                                                                                
CHAIR NEUMAN remarked:                                                                                                          
                                                                                                                                
     Representative Doogan, as the  chair of this committee,                                                                    
     I certainly control  the tone of the debate,  and I did                                                                    
     state earlier  that we  would get  a legal  opinion and                                                                    
     have  some discovery.   I  never, I  never cut  anybody                                                                    
     back, but I  wanted to make sure, that, I  want to stay                                                                    
     on the bill here.                                                                                                          
                                                                                                                                
REPRESENTATIVE DOOGAN said, "I renew my request."                                                                               
                                                                                                                                
7:44:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN  opined that the committee  must realize that                                                               
HB 217  impacts the  initiative and members  will need  to review                                                               
the bill in a  broad context.  He said that  he was supportive of                                                               
the   legislation,  but   was  concerned   about  how   much  the                                                               
legislature should change the initiative.                                                                                       
                                                                                                                                
CHAIR  NEUMAN  announced that  HB  217  would  be held  over  for                                                               
further discussion and with public testimony open.                                                                              
                                                                                                                                
7:45:08 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism meeting was adjourned at 7:45 p.m.                                                                                  

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