Legislature(2011 - 2012)BARNES 124

03/15/2011 10:15 AM ECON. DEV., TRADE & TOURISM

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Audio Topic
10:19:24 AM Start
10:20:06 AM Presentation: "alaska Adventure Center: Selling Tourism in the 21st Century"
11:34:58 AM HB191
12:16:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
"Alaska Adventure Center: Selling Tourism in the
21st Century," by Perry Green & Bob Coe
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         March 15, 2011                                                                                         
                           10:19 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Bob Herron, Chair                                                                                                
Representative Kurt Olson, Vice Chair                                                                                           
Representative Reggie Joule                                                                                                     
Representative Wes Keller                                                                                                       
Representative Cathy Engstrom Munoz                                                                                             
Representative Steve Thompson                                                                                                   
Representative Berta Gardner                                                                                                    
Representative Chris Tuck                                                                                                       
MEMBERS ABSENT                                                                                                                
Representative Neal Foster                                                                                                      
OTHER LEGISLATORS PRESENT                                                                                                     
Senator Johnny Ellis                                                                                                            
Representative Bill Stoltze                                                                                                     
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: "Alaska Adventure Center: Selling Tourism in the                                                                  
21st Century"                                                                                                                   
     - HEARD                                                                                                                    
HOUSE BILL NO. 191                                                                                                              
"An Act  establishing a state  department of agriculture  and food                                                              
and relating  to its  powers and  duties; relating  to the  powers                                                              
and duties  of the  Department of  Environmental Conservation  and                                                              
the  Department  of  Natural  Resources;   and  providing  for  an                                                              
effective date."                                                                                                                
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 191                                                                                                                  
SHORT TITLE: DEPARTMENT OF AGRICULTURE AND FOOD                                                                                 
SPONSOR(s): REPRESENTATIVE(s) THOMPSON BY REQUEST                                                                               
03/11/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/11/11       (H)       EDT, RES, FIN                                                                                          
03/15/11       (H)       EDT AT 10:15 AM BARNES 124                                                                             
WITNESS REGISTER                                                                                                              
PERRY GREEN, Board Member                                                                                                       
Alaska Adventure Exhibition Center                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Participated in a PowerPoint presentation                                                                
titled, "Alaska Adventure Center:  Selling Tourism in the 21st                                                                  
BOB COE, Development Chair                                                                                                      
Alaska Adventure Exhibition Center                                                                                              
La Quinta, California                                                                                                           
POSITION STATEMENT:  Provided a PowerPoint presentation titled,                                                               
"Alaska Adventure Center:  Selling Tourism in the 21st Century."                                                                
PETE FELLMAN, Representative                                                                                                    
Alaska Farm Bureau, Inc.                                                                                                        
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
LYALL BRASIER, Owner                                                                                                            
Brasier Farms                                                                                                                   
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
BRYCE WRIGLEY, President                                                                                                        
Alaska Farm Bureau, Inc.                                                                                                        
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
RUBY HOLLEMBAEK, Owner-Operator                                                                                                 
Alaska Interior Game Ranch; President                                                                                           
Alaska Diversified Livestock Association, Inc. (ADLA)                                                                           
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
LYNN GATTIS, Owner                                                                                                              
Gattis Farm                                                                                                                     
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
PAUL HUPPERT, Owner                                                                                                             
Palmer Produce, Inc.                                                                                                            
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
MICHAEL NEECE, President                                                                                                        
Homer Grange                                                                                                                    
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
BRUCE WILLARD, Director                                                                                                         
Alaska Farm Bureau, Inc.                                                                                                        
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
MARIE RICE                                                                                                                      
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:   Ms. Rice's  testimony supporting HB  191 was                                                            
read by Bill Burton.                                                                                                            
BILL BURTON                                                                                                                     
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
GAYLE EASTWOOD                                                                                                                  
Petersburg, Alaska                                                                                                              
POSITION STATEMENT:  Testified in support of HB 191.                                                                          
DELBERT SIMINEO                                                                                                                 
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the hearing on HB 191.                                                                  
ED FOGELS, Deputy Commissioner                                                                                                  
Office of the Commissioner                                                                                                      
Department of Natural Resources                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the hearing on HB 191.                                                                  
ACTION NARRATIVE                                                                                                              
10:19:24 AM                                                                                                                   
CHAIR BOB  HERRON called the  House Special Committee  on Economic                                                            
Development, International  Trade and Tourism meeting  to order at                                                              
10:19  a.m.   Representatives  Herron, Thompson,  Gardener,  Tuck,                                                              
and   Keller,   and  were   present   at   the  call   to   order.                                                              
Representatives  Munoz, Olson,  and Joule  arrived as the  meeting                                                              
was in  progress.  Senator  Ellis and Representative  Stoltze were                                                              
also in attendance.                                                                                                             
^PRESENTATION:  "Alaska Adventure Center:  Selling Tourism  in the                                                              
21st Century"                                                                                                                   
 PRESENTATION: "Alaska Adventure Center: Selling Tourism in the                                                             
                         21st Century"                                                                                      
10:20:06 AM                                                                                                                   
CHAIR HERRON announced  that the first order of  business would be                                                              
a  presentation   titled,  "Alaska  Adventure  Center:     Selling                                                              
Tourism in the 21st Century," by Perry Green and Bob Coe.                                                                       
10:21:08 AM                                                                                                                   
PERRY  GREEN, Board  Member, Alaska  Adventure Exhibition  Center,                                                              
noted his long  family history and business experience  in Alaska,                                                              
particularly  in  tourism.      The  Alaska  Adventure  Exhibition                                                              
Center is an  idea that has been  evolving for over 10  years, and                                                              
the  members of  the  board of  directors  were  chosen for  their                                                              
expertise  in tourism  marketing and  for their  ability to  think                                                              
"outside the  box."   Mr.  Green reviewed the business  history of                                                              
the co-presenter, Mr.  Coe, and named other members  of the board.                                                              
He pointed  out that 75  percent of his  personal business  - from                                                              
Ketchikan  to  Anchorage -  is  dependent  upon tourism,  and  his                                                              
organization seeks  to build a unique  structure on the  Las Vegas                                                              
Strip to  promote Alaska  tourism.  Las  Vegas was chosen  because                                                              
it has been  the number-one exhibition  city in the world  for the                                                              
last 16  years, and last  year 31 million  people visited  the Las                                                              
Vegas  Strip.    He  introduced   Mr.  Coe  and  listed  his  many                                                              
successful business and community activities.                                                                                   
10:26:45 AM                                                                                                                   
REPRESENTATIVE  GARDNER  asked  Mr.  Green whether  this  was  his                                                              
10:27:22 AM                                                                                                                   
MR. GREEN said yes.   He told a story of visiting  Bethel where he                                                              
realized  that  the Bush  had  changed,  and that  developing  the                                                              
tourism industry would help cities and rural areas as well.                                                                     
10:29:18 AM                                                                                                                   
MR.  GREEN, in  response  to Chair  Herron,  relayed  some of  his                                                              
accomplishments  related to poker  tournaments and promotion.   He                                                              
observed that  "it isn't the state  that sells, it's  the sizzle."                                                              
As an example  of the impact of tourism and  successful promotion,                                                              
he noted  that when Mr.  Coe managed the  duty-free stores  at the                                                              
Ted Stevens  Anchorage International Airport  (Anchorage airport),                                                              
$20 million in revenue was paid to the state annually.                                                                          
10:32:48 AM                                                                                                                   
BOB COE,  Development Chair,  Alaska Adventure Exhibition  Center,                                                              
informed  the committee  that he  retired from  work in Alaska  in                                                              
2004, but  is here  to give back  to the state.   He  provided his                                                              
background  and described  his  efforts to  market  Alaska as  the                                                              
gateway to  Japan after political  changes in Russia,  and longer-                                                              
distance  aircraft,  threatened   one-half  of  the  international                                                              
revenue coming into  the Anchorage airport.  In  Guam, he assisted                                                              
as the tourism industry  became a large part of the  economy.  His                                                              
primary tasks  were to design  and build retail  stores, worldwide                                                              
marketing   programs,  travel-industry   relationships,   consumer                                                              
research,   and   aspects  of   these   tasks  are   tourism   and                                                              
entertainment.     Mr.  Coe  began   presented  slide   2  titled,                                                              
"Alaska's Tourism  Economy" and described "economic sizing."    He                                                              
reviewed  the recent  economic  statistics  on tourism  in  Alaska                                                              
that  revealed the  tourism  industry  is shrinking,  and  causing                                                              
economic challenges  throughout  the state from  the loss  of jobs                                                              
and  state   revenue.    The   primary  cause  is   the  worldwide                                                              
recession,  which has  affected  the cruise  industry  especially,                                                              
and  the  future is  uncertain.    Mr.  Coe opined  that  spending                                                              
habits  have changed  and  traditional marketing  methods  through                                                              
advertising  will not  make  a difference;  what  is required  are                                                              
powerful  marketing   strategies  that   "push  and  pull."     He                                                              
explained that marketing  to those Outside by businesses  that are                                                              
based in  Alaska attempt to  pull tourists  to the state,  but the                                                              
cruise industry,  because it establishes a schedule  to a specific                                                              
destination, pushes  tourists to the state from  another location.                                                              
Thus the  decline of the cruise  industry is a problem  because of                                                              
the  loss of  the "push"  element of  tourism.   He observed  that                                                              
millions of  people still want to  come to Alaska, except  for the                                                              
cold and the cost.   Slide 4 titled, "Alaska  Visitor numbers have                                                              
declined since 2008,"  indicted a loss of 209,800  cruse visitors.                                                              
He  advised that  some of  the figures  were preliminary  numbers,                                                              
but they are "in the ballpark."                                                                                                 
10:42:42 AM                                                                                                                   
MR.  COE  doubted  the  airline   industry's  increase  of  70,000                                                              
visitors in  2009.   He then presented  slide 5 titled,  "Alaska's                                                              
Tourism  Economy is  Shrinking Detailed  Analysis Summary,"  which                                                              
indicated a decline  to the economy of $560 million  in direct and                                                              
indirect spending  since 2008.  Slide 6 titled,  "Alaska's Tourism                                                              
Economy  is  Shrinking," was  an  itemized  list of  spending  for                                                              
2008-2010,  although the  numbers for  2010 were  an average  from                                                              
2009.   He pointed out  the losses, and  concluded that  "we're in                                                              
trouble and  we need a  strategy."  Slide  9 was titled,  "Targets                                                              
Need  to  be  Established  New Marketing  Strategies  Need  to  be                                                              
Initiated,"  and Mr. Coe  advised that  an aggressive  strategy is                                                              
required  that   will  target  large   segments  of   the  visitor                                                              
industry.   Slide  12 titled,  "Key  New Strategies  Launch a  New                                                              
Foreign  Visitor  Strategy,"  described  Mr. Green's  idea  of  an                                                              
Alaska  Adventure  Center  "push"  marketing  strategy  to  target                                                              
foreign  visitors, expose  foreigners to  Alaska attractions,  and                                                              
provide   incentives  to   travel   agents  and   visitors.     If                                                              
successful,  the center  will return  20,000  visitors to  Alaska.                                                              
Mr.  Coe detailed  his objectives  for  tourism marketing  through                                                              
the 2013-2014 season with a focus on increasing air travelers.                                                                  
10:48:45 AM                                                                                                                   
REPRESENTATIVE  GARDNER asked  whether the  figures underlined  on                                                              
slide  11 were  the  visitors  targeted  by the  Alaska  Adventure                                                              
Center in Las Vegas.                                                                                                            
10:49:14 AM                                                                                                                   
MR. COE  indicated  yes, and explained  that  the first target  is                                                              
30,000  foreign   visitors,  primarily  from  China,   Japan,  and                                                              
Germany.  He  said there is a  need for a visa waiver  program and                                                              
to establish  a gateway  airline for Alaska  such as  the mainline                                                              
China air carrier.   The Alaska Adventure Center  would include an                                                              
outpost to focus on foreign travelers.                                                                                          
REPRESENTATIVE  GARDNER   asked  what  proportion   of  Las  Vegas                                                              
visitors are Chinese.                                                                                                           
10:51:18 AM                                                                                                                   
MR. COE  said he  was unsure;  although  he knows  China is  a new                                                              
market with  lots of  potential.   Slide 13 was  a picture  of the                                                              
Dena'ina Civic  and Convention  Center in  Anchorage and  he spoke                                                              
of   the   opportunity   to  attract   small-   and   medium-sized                                                              
conventions  to utilize  the facility;  as a  matter of fact,  4.5                                                              
million  conventioneers  meet in  Las  Vegas.   He  turned to  the                                                              
Alaska Adventure  Center,  which is a  themed attraction  intended                                                              
to  attract  100,000 new  visitors  to  Alaska.   Slide  17  began                                                              
depictions  of the  center which  would  be located  on Las  Vegas                                                              
Boulevard  and would  have  an  impressive marquis,  great  corner                                                              
visibility,  and would promote  all segments  of Alaska's  tourism                                                              
10:55:09 AM                                                                                                                   
MR. COE,  in response to  Chair Herron, said  this idea is  new to                                                              
Las Vegas,  but has  been done  at Disney's  Epcot Center  and the                                                              
Shanghai  World Expo.   He  opined  the center  will increase  the                                                              
Alaska tourism economy  by $217 million.  The  initial concept for                                                              
the  center includes  big  screen  video, oversized  images,  high                                                              
ceilings,  clear  and  open  lines  of sight,  and  animals.    He                                                              
provided a  description of the China  exhibit at Epcot  Center and                                                              
its impact on tourism.                                                                                                          
10:56:23 AM                                                                                                                   
REPRESENTATIVE  GARDNER asked  for  a comparison  of Epcot  Center                                                              
and Las Vegas.                                                                                                                  
MR.  COE said  Las  Vegas reaches  triple  the  market and  Alaska                                                              
needs to think big in terms of tourism.                                                                                         
REPRESENTATIVE  TUCK  asked  whether  Alaska  has  a  pavilion  at                                                              
10:57:44 AM                                                                                                                   
MR. COE  said no.   Slide  22 displayed  images from the  Shanghai                                                              
World  Expo 2010.    Slide  23 provided  demographic  similarities                                                              
between  Alaska and  Las  Vegas  visitors.   He  advised that  the                                                              
Alaska  Adventure   Exhibition  Center  board  of   directors  has                                                              
located  a site  adjacent to  the  New YorkNew  York casino  where                                                              
45,000 people  walk by every day.   Due to the  economic downturn,                                                              
the  price  of the  building  is  negotiable.   Returning  to  the                                                              
visitors  targeted  by  the  center, he  stated  that  the  center                                                              
intends to  increase cruise visitors  by 20,000, air  travelers by                                                              
65,000,  business  travelers  by  5,000 and  foreign  visitors  by                                                              
10,000.   Slide  29 titled,  "Alaska  Adventure Center  Attraction                                                              
Focus and Content," listed preferred tourism activities.                                                                        
11:04:53 AM                                                                                                                   
MR.  COE envisioned  the  center  would be  a  new structure  that                                                              
symbolizes  Alaska with  a wilderness  lodge  concept -  authentic                                                              
and of  high quality.   Slides 32-34 were  depictions of  a center                                                              
based on  a wilderness  lodge theme that  is magical  and competes                                                              
with the other attractions  in Las Vegas.  Design  elements of the                                                              
building  were:  the  wonders  of  Alaska;  wild  animals;  photo-                                                              
opportunities;   Native  culture;   sounds  of  nature;   historic                                                              
replicas.   He assured  the committee  this would  not be  a phony                                                              
experience,  but  a  multi-dimensional  entertainment  attraction,                                                              
with  four stand-alone  attractions:  theatre, restaurant,  retail                                                              
shops, and  vacation planning.   In a 300-seat theatre  there will                                                              
be live  shows and a  free movie.   At the Fur Rendezvous  Trading                                                              
Post, there would  be seven retail businesses.   At the restaurant                                                              
there  would  be  wilderness  lodge   dining.    At  the  vacation                                                              
planning  zones   there  would  be  information   on  sightseeing,                                                              
adventures  outdoors,  culture  and  history, and  cruises.    The                                                              
planning zones  would provide  videos, consultations  with trained                                                              
staff,  computerized  vacation   planning,  print  materials,  and                                                              
11:14:12 AM                                                                                                                   
MR.   COE   presented   slide    52   titled,   "Alaska   Business                                                              
Participation,"  which listed  the  benefits to  business and  how                                                              
small  and  large  businesses  can  be  a  part  of  the  vacation                                                              
planning  zones   by  sponsorship  and  advertising.     Slide  54                                                              
displayed  a  plan  for  "Alaska  Visitor  Dollars,"  intended  to                                                              
offset the  perception of the  high cost  of travel in  Alaska and                                                              
to increase  visitors' spending.   Slide 56  was the  beginning of                                                              
Phase 1,  Development Feasibility,  which is scheduled  for August                                                              
2011 to March  2012.  Slide 57  was a timeline beginning  with the                                                              
feasibility  phase in  2011, and  continuing to  opening in  2013.                                                              
Mr.  Coe concluded  his presentation,  saying that  timing is  key                                                              
because of  the following:   depressed real  estate in  Las Vegas;                                                              
national  interest in Alaska;  the Travel  Promotion Act;  support                                                              
for tourism by leaders in Alaska.                                                                                               
11:18:23 AM                                                                                                                   
REPRESENTATIVE   GARDNER  asked   whether   the  presentation   is                                                              
available online.                                                                                                               
MR.  COE indicated  no.   In  further response  to  Representative                                                              
Gardner  he  agreed  that  the  Alaska  Railroad  belongs  in  the                                                              
presentation.  In  further response, he said the  Travel Promotion                                                              
Act  is an  economic benefit  plan  by the  federal government  to                                                              
bring foreign tourists to America.                                                                                              
11:20:01 AM                                                                                                                   
REPRESENTATIVE  MUNOZ  asked  whether   Mr.  Coe  has  a  specific                                                              
MR. COE  expressed the need for  money for the  feasibility study.                                                              
He  opined the  center  has a  good  chance of  working;  however,                                                              
feasibility  studies are  needed to determine  the square  footage                                                              
and  the  location,   to  determine  what  attractions   would  be                                                              
successful,  to conduct  customer  surveys, and  to determine  the                                                              
11:22:19 AM                                                                                                                   
CHAIR HERRON  asked whether there  are other partners  involved at                                                              
this point that would match state funds.                                                                                        
MR. COE  indicated  this is  "a solo act."   The  project must  be                                                              
proven  viable and  then, typically,  a hardcore  group of  people                                                              
"will drive it through."                                                                                                        
CHAIR HERRON  surmised the Alaska  Railroad, the  cruise industry,                                                              
the  governor,   and  Alaska  Airlines  could  partner   with  the                                                              
11:23:46 AM                                                                                                                   
MR. GREEN  indicated that the legislature  must take the  lead and                                                              
show  confidence in  the project  after the  feasibility study  is                                                              
done.  He said  he and others have spent $250,000  so far, and Mr.                                                              
Coe has  donated $100,000  of consulting  work.  Without  partners                                                              
throughout Alaska  and Yukon, Canada, the center  cannot be built.                                                              
Currently, major  "players" are  lined up with supportive  letters                                                              
and  contacts.   Mr.  Green opined  the  building  will be  wildly                                                              
successful  and will  sustain itself  once it  is funded,  without                                                              
further support from  the legislature.  He restated  the strengths                                                              
of the  Las Vegas location;  in fact, having  a base in  Las Vegas                                                              
means more economical visitor marketing for Alaska.                                                                             
11:28:52 AM                                                                                                                   
CHAIR  HERRON observed  the  members  of the  committee  represent                                                              
interests throughout  the state, and said that  the committee will                                                              
work with the presenters on the project.                                                                                        
11:29:37 AM                                                                                                                   
REPRESENTATIVE   MUNOZ   asked   whether  the   Alaska   Adventure                                                              
Exhibition Center has a lease-option on the property.                                                                           
11:29:46 AM                                                                                                                   
MR. GREEN responded  that a real estate agent has  quoted a price,                                                              
and the  availability of  the property.  Because of the  depressed                                                              
real estate  market in  Las Vegas,  this is  an opportune  time to                                                              
buy.  He reminded  the committee that there is  parking nearby and                                                              
the  property  is  a  large  parcel  in  an  ideal  location  with                                                              
neighboring attractions  to bring people in.   In further response                                                              
to Representative  Munoz,  he said,  "It's a  short window  for an                                                              
exclusive option."                                                                                                              
11:32:49 AM                                                                                                                   
REPRESENTATIVE  JOULE  asked for  the  length  of time  needed  to                                                              
complete a feasibility study.                                                                                                   
MR.   COE  estimated   one   year.     In   further  response   to                                                              
Representative Joule,  he said the estimated cost of  the study is                                                              
$4 million.                                                                                                                     
11:34:19 AM                                                                                                                   
           HB 191-DEPARTMENT OF AGRICULTURE AND FOOD                                                                        
11:34:58 AM                                                                                                                   
CHAIR HERRON announced  that the final order of  business would be                                                              
HOUSE BILL  NO. 191,  "An Act establishing  a state  department of                                                              
agriculture  and  food and  relating  to  its powers  and  duties;                                                              
relating  to   the  powers  and   duties  of  the   Department  of                                                              
Environmental   Conservation  and   the   Department  of   Natural                                                              
Resources; and providing for an effective date."                                                                                
11:35:12 AM                                                                                                                   
REPRESENTATIVE  THOMPSON,  as  the  sponsor,  introduced  HB  191.                                                              
Representative Thompson  said he is  a businessman who  supports a                                                              
strong,   diversified  Alaska   economy.     He  heard  from   the                                                              
agriculture  community concerns  about  agricultural projects  and                                                              
the ability  to provide  a safe,  long-term food  supply.   In the                                                              
'70s, Governor Hammond  established goals for the  state:  broaden                                                              
the economic  base of the  state through agricultural  production;                                                              
stabilize   food  costs   by   increasing   local  food;   provide                                                              
alternative  job   opportunities  through  expanded   agriculture;                                                              
improve  rural  life  by  developing   an  economic  base  through                                                              
agriculture.   Currently,  there  is renewed  interest in  growing                                                              
food locally;  there are  markets for  farmers' produce,  Alaska's                                                              
disease-free potatoes,  and greenhouse  products.  House  Bill 191                                                              
will  enable   farmers  to   communicate   their  ideas   for  the                                                              
enhancement  of agriculture  in the  state.   He pointed out  that                                                              
only  Rhode  Island  and  Alaska  do  not  have  a  department  of                                                              
agriculture.  Representative  Thompson acknowledged  that the bill                                                              
is "a  work in  progress," and  asked the  committee to  assist in                                                              
strengthening  the agriculture  industry  for the  benefit of  all                                                              
11:37:31 AM                                                                                                                   
PETE FELLMAN,  Representative,  Alaska Farm  Bureau, Inc.,  gave a                                                              
brief  discussion  of  the history  of  the  state's  agricultural                                                              
policy.   He referred  to efforts  - spanning over  20 years  - to                                                              
stabilize   the    state   policy   on   agriculture    from   one                                                              
administration  to  the  next.   However,  Mr.  Fellman  has  been                                                              
involved  in this effort  during many  changes in  administration,                                                              
and some administrations  did not support agriculture  in any way.                                                              
He  opined  the  Department  of Natural  Resources  (DNR)  is  not                                                              
serious in supporting  agriculture; in fact, $12  million from the                                                              
Agriculture  Revolving Loan  Fund (ARLF)  has been  tapped to  run                                                              
the  Division  of   Agriculture  within  DNR.     Because  of  the                                                              
restriction  preventing  farmers   from  borrowing  money  against                                                              
agricultural  land, the ARLF  at the division  is the  only source                                                              
of loans  for operating money for  farmers.  He asked  whether the                                                              
committee wants agriculture in Alaska to die a slow death.                                                                      
11:42:06 AM                                                                                                                   
LYALL BRASIER, Owner,  Brasier Farms, stated his farm  has been in                                                              
operation for  40 years raising  potatoes, livestock,  forage, and                                                              
grain.   He  expressed his  support of  HB 191  because the  state                                                              
needs a  strong food  security program,  and should eliminate  the                                                              
multi-layers  of bureaucracy  between  agriculture, the  governor,                                                              
and the legislature.                                                                                                            
11:44:02 AM                                                                                                                   
BRYCE WRIGLEY,  President, Alaska  Farm Bureau, Inc.,  stated that                                                              
food production and  food security need to become  a top priority.                                                              
There is  only a three  to nine day supply  of food in  the state,                                                              
and Alaska's  food distribution  system is  vulnerable to  natural                                                              
and  man-made disasters.   Farmers  and ranchers  are thwarted  by                                                              
regulations  that  prohibit  the   growth  of  the  industry;  for                                                              
example,  agencies   providing  inspection  services,   veterinary                                                              
services, oversight  of land, and  other issues, are  functions of                                                              
several  different departments,  and  would be  more efficient  if                                                              
located in  a single department  of agriculture.  The  Alaska Farm                                                              
Bureau proposes a  10-year goal of increased food  production to a                                                              
level  that would  provide for  the population  for 90  days.   If                                                              
created, the department  of agriculture would be funded  as is the                                                              
Division  of  Agriculture,  and  critical  agricultural  functions                                                              
would  move  from the  Department  of  Environmental  Conservation                                                              
(DEC)  and DNR  to  one  department.   He  offered  help from  the                                                              
agricultural community  to develop and focus the  department.  Mr.                                                              
Wrigley advised that  for three decades the needs  of the division                                                              
have been sidetracked  by the size of DNR and its  other large and                                                              
important  priorities; in  fact, DNR  does not  have the  capacity                                                              
for an appropriate  level of management to provide  food security,                                                              
which  is something  that has  been possible  for many  years.   A                                                              
dynamic  agricultural industry  would  benefit  Alaska by  growing                                                              
local food,  reducing social  ills in  rural areas, and  fostering                                                              
good  work ethics  in  young people.   He  urged  support for  the                                                              
creation of  a department of  agriculture that will  be efficient,                                                              
responsive,  proactive, empowered,  and  positively involved  with                                                              
many facets of life in Alaska.                                                                                                  
11:48:15 AM                                                                                                                   
RUBY  HOLLEMBAEK,  Owner-Operator,  Alaska  Interior  Game  Ranch;                                                              
President,   Alaska   Diversified  Livestock   Association,   Inc.                                                              
(ADLA), said  she is  a life-long Alaskan  resident and  noted her                                                              
support for several  agricultural organizations around  the state.                                                              
She provided a brief  personal history.  In her  role as president                                                              
of ADLA,  she expressed support  for the creation of  a department                                                              
of agriculture and  food.  A department of agriculture  was formed                                                              
under  the territorial  constitution,  but  unfortunately was  not                                                              
retained at  statehood.  This  department should be  reinstated to                                                              
supply resources  for Alaskans who produce food,  fiber, and fuel.                                                              
Ms. Hollembaek  advised that  there was a  15 percent  decrease in                                                              
the  amount of  land in  production from  1987 to  2007; in  fact,                                                              
Alaska is ranked  50th in the amount of land in  production of all                                                              
of  the  states,  due  not  to  a  lack  of  land,  water,  or  an                                                              
acceptable growing  season, but  because of the political  outlook                                                              
toward  agriculture in  Alaska.   As a  matter of  fact, ADLA  was                                                              
formed in 2001 to  bring unity and a voice to  livestock producers                                                              
who are  encouraged by  the public's  interest in eating  locally,                                                              
alternative  energy products,  and Alaskan-made  fiber.   She said                                                              
livestock businesses  are thriving,  although fuel and  fertilizer                                                              
prices are  high.   Livestock producers are  looking for  the same                                                              
consideration from  state government  as oil, gas,  fisheries, and                                                              
other  resources receive,  and "to  sit at the  table and  conduct                                                              
business  about our  product ...  we want  a cabinet-level  seat."                                                              
She stated  the purpose of  the department of agriculture  created                                                              
by the  territorial constitution,  and relayed  that the  ARLF was                                                              
created in 1953 with an authorization of $1 million.                                                                            
11:52:40 AM                                                                                                                   
LYNN  GATTIS, Owner,  Gattis Farm,  observed that  as a  life-long                                                              
Alaskan  she  continues to  be  interested  in how  residents  get                                                              
their  food.   Ms.  Gattis  is  a  farmer in  Port  MacKenzie  and                                                              
supports HB  191 because  the attention  to agriculture  in Alaska                                                              
is    lacking,   which    she    attributed    to   DNR's    other                                                              
responsibilities.   Furthermore,  this situation  reflects a  lack                                                              
of  a  true  plan  for  the  needs  of  Alaska  and  its  farmers.                                                              
Although  she did  not agree  with all  aspects of  the bill,  the                                                              
bill will  address the issue of  inattention to agriculture.   Ms.                                                              
Gattis expressed  her preference  for less  government, not  more,                                                              
but  she  said   agriculture  struggles  to  be   heard  by  state                                                              
government, and  instead the state  should support  agriculture so                                                              
its businesses can be profitable.                                                                                               
11:54:46 AM                                                                                                                   
REPRESENTATIVE  TUCK asked which  aspects of  the bill  Ms. Gattis                                                              
did not support.                                                                                                                
MS. GATTIS  explained  that the  bill adds a  layer of  government                                                              
and  cost, but  will  allow agriculture  to  have "a  seat at  the                                                              
table."    She  opined  DNR  cannot   provide  a  "direction"  for                                                              
agriculture,  such  as small  farms  and  niche markets,  or  huge                                                              
tracts of land.                                                                                                                 
11:56:28 AM                                                                                                                   
PAUL   HUPPERT,  Owner,   Palmer  Produce,   Inc.,  informed   the                                                              
committee his  family and he are  involved in agriculture  in many                                                              
ways, and he  has served on industry-related councils  and boards.                                                              
Mr.  Huppert supported  the testimony  of  the previous  speakers,                                                              
and added  that an additional problem  with DNR is  its negativity                                                              
towards  agricultural   issues.    He   opined  if  there   is  no                                                              
department  of   agriculture,  the   industry  will   continue  to                                                              
decline.   Mr. Huppert is also  upset by the inappropriate  use of                                                              
the  ARLF.   He concluded,  saying  that Alaska's  isolation is  a                                                              
protection  from  agricultural  diseases  and  that  creates  many                                                              
opportunities   for  agriculture  in   Delta  Junction   and  Port                                                              
11:59:03 AM                                                                                                                   
MICHAEL NEECE, President,  Homer Grange, expressed  his support of                                                              
HB 191.  He  informed the committee that the Grange  is a national                                                              
organization  established  in 1867  to  help provide  support  for                                                              
farmers throughout the U.S.                                                                                                     
11:59:52 AM                                                                                                                   
BRUCE WILLARD,  Director, Alaska  Farm Bureau,  Inc., said  he has                                                              
been involved in  commercial agriculture in the  state since 1959.                                                              
Mr. Willard  expressed his support  of HB 191, and  described some                                                              
of   the  problems   surrounding  the   marketing  of   livestock.                                                              
Although there  is a  slaughterhouse in  Palmer, it is  threatened                                                              
with  closure, and  then conditions  would  revert to  "butchering                                                              
under a tree."   He reiterated that agriculture  needs a direction                                                              
and a voice, and the state does not need more fisheries.                                                                        
12:02:01 PM                                                                                                                   
MARIE  RICE had  her  testimony  read by  Bill  Burton as  follows                                                              
[original punctuation provided]:                                                                                                
     I've  been  involved  in the  agriculture  community  in                                                                   
     Kodiak since  1963 when we  purchased a cattle  ranch at                                                                   
     Kalsin Bay.   We took a big hit in the  1964 tidal wave,                                                                   
     [losing] many  of our purebred Scottish  Highland cattle                                                                   
     we had  shipped all the way  from Colorado.   We revived                                                                   
     and added  a large lease  and cattle from the  adjoining                                                                   
     ranch  a  few years  later  that  resulted in  a  cattle                                                                   
     ranch  encompassing 50,000  acres  of lease  and we  ran                                                                   
     nearly 1,000  head of cattle.   At the time  agriculture                                                                   
     was at  its peak with  seven large cattle operations  on                                                                   
     the road system on Kodiak.                                                                                                 
     I  remember  when  the  transition  was  made  from  the                                                                   
     Department   of   Agriculture   to   the   Division   of                                                                   
     Agriculture  and  the  great concern  the  ranchers  had                                                                   
     about the  change.  The  fear at  the time was  that the                                                                   
     emphasis on  support for agriculture in Alaska  would be                                                                   
     greatly  diminished.    The  timing  of  this  was  also                                                                   
     coupled with  the Native Land Claim Settlement  Act that                                                                   
     allowed  for native  selection of  land that  encroached                                                                   
     on some  of the  leasehold interest.   Those fears  have                                                                   
     come to reality  in the place agriculture  has been able                                                                   
     to hold in the state.                                                                                                      
     I strongly  support  the switch back  to the  Department                                                                   
     of  Agriculture.     Agriculture  in  our   state  needs                                                                   
     renewed emphasis  and support if we are  to increase the                                                                   
     level  of production  to serve  our needs.   I  recently                                                                   
     saw a  statistic that  said we produce  3% of our  food.                                                                   
     I  have  recently taken  part  in  the USDA  hoop  house                                                                   
     project  which is very  exciting in  trying to  increase                                                                   
     local  production of  vegetables.   Please  support  the                                                                   
     move to the Department of Agriculture.                                                                                     
BILL BURTON  said that ranchers  in Kodiak  have lost land  due to                                                              
the  Alaska Native  Claims  Settlement Act,  and  a department  of                                                              
agriculture  is needed to  help promote  agriculture in  the event                                                              
of a disruption in the delivery of food.                                                                                        
12:06:03 PM                                                                                                                   
GAYLE  EASTWOOD disclosed  she was  a  member of  the Alaska  Farm                                                              
Bureau  and that  she  was  testifying on  her  own  behalf.   Ms.                                                              
Eastwood  and  her  husband have  imported  different  species  of                                                              
trees for  future sale  in Southeast  Alaska.   At their  ranch in                                                              
Delta Junction,  they can  grow and sell  hay cheaper  than buying                                                              
imported hay, thus  they are proponents of  Alaska-grown products.                                                              
Ms.  Eastwood expressed  her support  for HB  191, restating  that                                                              
the department  was originally  created in 1945  and the  ARLS was                                                              
authorized  in  1953.    She  further   explained  that  the  ARLS                                                              
intended  to  help  farmers  control  animal  diseases  and  plant                                                              
pests,  and for  other agricultural  endeavors.    Agriculture  in                                                              
Alaska  extends  beyond  garden-grown  vegetables  to  the  barley                                                              
project  in  Delta  Junction where  farmers  are  growing  barley,                                                              
wheat, oats,  canola, and potatoes  on a commercial scale.   Also,                                                              
farmers are raising  sheep, cattle, yak, bison,  and other animals                                                              
for commercial  sale.   In Southeast Alaska,  on a smaller  scale,                                                              
sheep  and  cattle  are  raised,   and  there  are  nurseries  and                                                              
Farmer's   Markets.    Ms.   Eastwood  opined   a  department   of                                                              
agriculture  will  benefit  farmers  and  consumers  by  assisting                                                              
farmers to  improve products,  thus providing  a locally  produced                                                              
product  reducing   freight  costs  and  increasing   the  vitamin                                                              
content of  food.    She  concluded that  agriculture is  the poor                                                              
relation of oil, gas, and coal at DNR.                                                                                          
12:09:14 PM                                                                                                                   
DELBERT SIMINEO, Palmer, Alaska (Indisc.).                                                                                      
12:11:46 PM                                                                                                                   
ED  FOGELS,  Deputy  Commissioner,  Office  of  the  Commissioner,                                                              
Department of Natural  Resources, advised that  the administration                                                              
has no  position on  the bill at  this time;  however, as  long as                                                              
the division  is located within  DNR, he and the  commissioner are                                                              
committed to making  it more effective.  Mr.  Fogel recognized the                                                              
true  value  of agriculture  to  Alaska  and  the issues  of  food                                                              
security,   and   agreed  with   the   need  to   strengthen   the                                                              
agricultural plan  for the state.   In fact, the  commissioner has                                                              
a strong  connection to the  agricultural industry, and  Mr. Fogel                                                              
has  met  with  the  farming  community   on  numerous  occasions.                                                              
Referring  to the  bill, he  agreed  that state  agencies need  to                                                              
collaborate  on  agricultural  issues,  and  said  DNR  will  work                                                              
toward that goal.                                                                                                               
12:13:46 PM                                                                                                                   
CHAIR HERRON  referred to  the passion  of the previous  testimony                                                              
and asked  for clarification  on whether Mr.  Fogel felt  that the                                                              
division needs to become a department of agriculture.                                                                           
MR.  FOGEL stated  that his  intent  was to  inform the  committee                                                              
that there  is new management  at DNR,  thus the division  will be                                                              
given a "fresh look".                                                                                                           
CHAIR HERRON  observed the newest  member of the  legislature from                                                              
Fairbanks  was  listening  to  the   deep-rooted  concern  of  his                                                              
12:15:43 PM                                                                                                                   
REPRESENTATIVE KELLER  appreciated the department's  commitment to                                                              
examine the issue.                                                                                                              
12:16:15 PM                                                                                                                   
[HB 191 was held for further testimony.]                                                                                        
12:16:43 PM                                                                                                                   
There being  no further business  before the committee,  the House                                                              
Special  Committee on  Economic  Development, International  Trade                                                              
and Tourism meeting was adjourned at 12:16 p.m.                                                                                 

Document Name Date/Time Subjects
Alaska Tourism Recovery Executive Summary Final 3.10.2011 BC.pptx HEDT 3/15/2011 10:15:00 AM
HB 191 - Alaska Business Monthly - ARLF.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 Alaska's State-Funded Ag Projects and Policy.pdf HEDT 3/15/2011 10:15:00 AM
HEDT 4/7/2011 8:00:00 AM
HB 191
HB 191 farm bureau Department of AG.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 Letter of Support Ruby Hollembaek.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 Sectional Analysis.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - Brasier Farms letter of support for Dept of AG.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - Mat-Su Farm Bureau 2007 letter.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - SPONSOR_STATEMENT_HB_191 (Revised #2).pdf HEDT 3/15/2011 10:15:00 AM
HEDT 4/7/2011 8:00:00 AM
HB 191
HB 191 - Letters of support.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - New - Farm Bureau legislator's Letter-December 22.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - New -Farm Bureau Dept of Ag.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - 14 Fiscal Notes.pdf HEDT 3/15/2011 10:15:00 AM
HEDT 4/7/2011 8:00:00 AM
HB 191
HB 191 - Eastwood Support LTR.pdf HEDT 3/15/2011 10:15:00 AM
HB 191 - ARLF - Fiscal Summary10.pdf HEDT 3/15/2011 10:15:00 AM