02/13/2006 06:00 PM House ECONOMIC DEV., TRADE, AND TOURISM
| Audio | Topic |
|---|---|
| Start | |
| HB389 | |
| HB416 | |
| Testimony on Proposed Committee Resolution - Alaska Association of Future Farmers of America | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 389 | TELECONFERENCED | |
| *+ | HB 416 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
February 13, 2006
6:05 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Jay Ramras, Co-Chair
Representative John Coghill
Representative Bob Lynn
Representative Harry Crawford
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Beth Kerttula
COMMITTEE CALENDAR
HOUSE BILL NO. 389
"An Act relating to tourist accommodations permits and to
penalties for failing to comply with permitting requirements;
removing a requirement that persons operating tourist
accommodations post certain laws and regulations on the
premises; and providing for an effective date."
- MOVED HB 389 OUT OF COMMITTEE
HOUSE BILL NO. 416
"An Act relating to the amount of the state business license
fee."
- MOVED CSHB 416(EDT) OUT OF COMMITTEE
TESTIMONY ON PROPOSED COMMITTEE RESOLUTION - ALASKA ASSOCIATION
OF FUTURE FARMERS OF AMERICA
- HEARD BUT NOT SCHEDULED
PREVIOUS COMMITTEE ACTION
BILL: HB 389
SHORT TITLE: REGULATION OF TOURIST ACCOMMODATIONS
SPONSOR(s): REPRESENTATIVE(s) COGHILL
01/23/06 (H) READ THE FIRST TIME - REFERRALS
01/23/06 (H) EDT, L&C
02/13/06 (H) EDT AT 6:00 PM CAPITOL 106
BILL: HB 416
SHORT TITLE: BUSINESS LICENSE FEE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
02/01/06 (H) READ THE FIRST TIME - REFERRALS
02/01/06 (H) EDT, L&C, FIN
02/13/06 (H) EDT AT 6:00 PM CAPITOL 106
WITNESS REGISTER
KAREN LIDSTER, Staff
to Representative John Coghill
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified that HB 389 is in response to a
request by the Department of Environmental Conservation (DEC) to
repeal legislation regarding the permitting requirements for
tourist accommodations and identified the sections that will be
repealed by it.
KRISTIN RYAN, Director
Division of Environmental Health
Department of Environmental Conservation (DEC)
Anchorage, Alaska
POSITION STATEMENT: Testified that permitting tourist
accommodations is not helpful in the mission of the Division of
Environmental Health and the Department of Environmental
Conservation (DEC).
JIM POUND, Staff
to Representative Jay Ramras
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified that HB 416 will repeal the
increase in the business license fee made by House Bill 162 in
2003.
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as a sponsor, testified in support
of HB 416.
RICK URION, Director
Division of Occupational Licensing
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified that HB 416 would generate a
significant fiscal note and discussed the current allocation of
business license fee funds and the potential effects of a
decreased business license fee.
HANNAH HARRISON, President
Alaska Association of Future Farmers of America (FFA)
Homer, Alaska
POSITION STATEMENT: Testified that potential legislation
regarding marketing Alaska Grown produce to the Alaska tourism
industry would have a positive effect on the FFA.
ACTION NARRATIVE
CO-CHAIR MARK NEUMAN called the House Special Committee on
Economic Development, International Trade and Tourism meeting to
order at 6:05:12 PM. Representatives Neuman, Ramras, Coghill,
Lynn, and Crawford were present at the call to order.
HB 389-REGULATION OF TOURIST ACCOMMODATIONS
6:05:35 PM
CO-CHAIR NEUMAN announced that the first order of business would
be HOUSE BILL NO. 389, "An Act relating to tourist
accommodations permits and to penalties for failing to comply
with permitting requirements; removing a requirement that
persons operating tourist accommodations post certain laws and
regulations on the premises; and providing for an effective
date."
6:06:32 PM
KAREN LIDSTER, Staff to Representative John Coghill, Alaska
State Legislature, informed the committee that [HB 389] is in
response to a request by the Department of Environmental
Conservation (DEC) to repeal legislation regarding the
permitting requirements for tourist accommodations. Currently,
[DEC] doesn't enforce the statute, and tourist accommodations
are regulated by annual water testing, health inspectors, fuel
tank inspections, and the number of toilets that have to be in a
[bathroom]. She added that tourist accommodations are heavily
regulated as public accommodations.
6:07:26 PM
MS. LIDSTER identified the sections that will be repealed by [HB
389]: AS 18.35.040, which relates specifically to [tourist
accommodation] permits that DEC no longer requires; AS
18.35.050, which is the penalty for noncompliance for the permit
requirement; and AS 44.64.030(a)(16), with AS 44.64.030 relating
to the adjudicatory authority and jurisdiction of DEC and AS
44.64.030(a)(16) specifically relating to AS 18.35.040 tourist
accommodations.
6:08:36 PM
REPRESENTATIVE COGHILL requested that Ms. Lidster inform the
committee as to what [the State of Alaska] isn't going to do
[when HB 389 is enacted].
MS. LIDSTER remarked that [the State of Alaska] isn't going to
require a permit for tourist accommodations [when HB 389 is
enacted].
6:09:41 PM
KRISTIN RYAN, Director, Division of Environmental Health,
Department of Environmental Conservation (DEC), explained that
the Food Safety and Sanitation Program regulates hotels and
tourist accommodations through 18 AAC 30. She noted that these
regulations were last drafted in 1982 and need to be updated.
The [DEC] has not permitted tourist accommodations since 1982.
6:10:21 PM
MS. RYAN informed the committee that [the Division of
Environmental Health] conducts complaint investigations as well
as inspections if/when a complaint arises. She remarked that
the requirement of permitting [tourist accommodations] adds a
layer of paperwork that isn't helpful in the mission of [the
Division of Environmental Health]. She added that the risk of
[tourist accommodation noncompliance] is extremely low compared
to other facilities that [the Food Safety and Sanitation
Program] inspects. The kitchens, for example, in [tourist]
accommodations, are still inspected and regulated under the Food
Safety Regulation.
6:10:59 PM
MS. RYAN explained that tourist accommodations sanitation
statutes and regulations address the rooms of the facility to
ensure that they are clean and sanitary. She informed the
committee that [HB 389] does not remove or eliminate [DEC]'s
obligation to set sanitary standards for tourist accommodations
and [DEC] will continue to do so. However, [HB 389] removes
[DEC's] requirement to permit, post the permit, and fine
[tourist accommodations] if/when a permit is not posted, which
[DEC] is currently not doing and hasn't done since 1982.
6:11:37 PM
CO-CHAIR NEUMAN inquired as to what constitutes a tourist
accommodation.
MS. RYAN responded that [a tourist accommodation] provides
lodging for the public for a fee. She added that a tourist
accommodation includes hotels, lodges, and RV parks. In further
response to Co-Chair Neuman, she informed the committee that
[DEC] has a special permit for camps and/or transients that's
geared toward guides and hunters. It's an all-encompassing
permit that includes food, wastewater, garbage disposal and
drinking water - everything that DEC regulates to varying
degrees.
6:14:14 PM
CO-CHAIR NEUMAN, upon determining that no one else wished to
testify, announced the closure of public testimony.
6:14:23 PM
REPRESENTATIVE COGHILL moved to report HB 389 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 389 was reported out of the
House Special Committee on Economic Development, International
Trade and Tourism.
HB 416-BUSINESS LICENSE FEE
6:14:56 PM
CO-CHAIR NEUMAN announced that the next order of business would
be HOUSE BILL NO. 416, "An Act relating to the amount of the
state business license fee."
6:15:10 PM
JIM POUND, Staff to Representative Jay Ramras, Alaska State
Legislature, explained that HB 416 will [repeal] the [increase
in the business license fee] made by [House Bill 162] in 2003,
which was at a time when [the State of Alaska] was seeking
additional sources of revenue due to low oil prices. He opined
that [HB 416] sends a message that Alaska is open for business,
especially for small business. He further opined that by
reducing [the State of Alaska's] business license fee from $100
back to $25 per year, Alaskans will be more willing to pursue
business ideas.
6:15:41 PM
MR. POUND remarked that HB 416 removes the burden placed on
small business by the [State of Alaska]. With [the cost of] oil
currently at an all-time high and not expected to ever drop to
record lows and with natural gas "on the horizon," HB 416 is
good for the Alaska economy by supporting "Mom and Pop"
businesses in Alaska.
CO-CHAIR NEUMAN commented that as a small business owner, he
appreciates the intent of [HB 416]. He opined that reducing
[the business license fee] would encourage more people to obtain
a business license.
6:16:46 PM
CO-CHAIR RAMRAS noted that the accompanying fiscal note is
significant - $4.25 million per year. He further noted that 90
percent of Alaska's revenue is a result of the oil and gas
industry and that one of the primary reasons Alaska doesn't have
a sales tax is because it's still growing. He remarked that
some Alaskans maintain multiple businesses and [the business
license fee of $100 per year] hinders non oil- and gas-related
growth in [Alaska's] economy.
6:19:23 PM
REPRESENTATIVE LYNN moved [to adopt] CSHB 416, Version 24-
LS1555\F, Bannister, 2/10/06, as the working document. There
being no objection, Version F was before the committee.
6:19:59 PM
REPRESENTATIVE CRAWFORD recalled his opposition to [increasing]
the business tax [in 2003]. He said, "I thought it was the
wrong idea at the time and I think it's a good thing that we're
repealing it today."
REPRESENTATIVE LYNN commented that [a bill is a good] when the
government can lower taxes. He added that [CSHB 416] sends a
good message that when a tax is no longer needed, [the
legislature] will reduce it.
6:20:58 PM
REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, informed
the committee that he voted for the [business license fee]
increase in [2003]. He commented that due to the circumstances
with which [the legislature] was faced at that time, it was a
"close call" whether it was the right thing to do. [House Bill
162] was a revenue measure to fill a significant gap. He added
that [the business license fee] effects commerce and business in
Alaska.
6:23:08 PM
CO-CHAIR RAMRAS remarked that he hadn't been able to determine
how many business licenses have been sold in Alaska.
REPRESENTATIVE STOLTZE relayed that dealing with the Department
of Revenue (DOR) has been a frustrating [process]. He added
that for something that was a significant state policy enacted
just three years ago, it should be very clearly delineated in
the revenue sourcebooks.
REPRESENTATIVE COGHILL inquired as to whether 74,000 business
licenses is as close as Representative Stoltze has been able to
[approximate].
REPRESENTATIVE STOLTZE responded that there's no clear
delineation in the revenue sourcebooks.
6:26:32 PM
RICK URION, Director, Division of Occupational Licensing,
Department of Commerce, Community, & Economic Development
(DCCED0, assured the committee that the division is able to
inform the committee as to the number of business licenses it
has sold this year, last year, and every year.
6:27:26 PM
MR. URION informed the committee that [CSHB 416] is going to
cost money. With the Murkowski Administration, DCCED was
charged with trying to generate more revenue to pay for the
services it provides. The DCCED has very few sources of
revenue, although one of them is the business license fee. He
explained that [the business license fee] is a tax - it is a
source of revenue. [The business license fee] was increased
from $25 to $100 per year. It was the first and only time [the
business license fee] has been increased since 1949, "when the
license law went on the books." He noted that there has never
been a person in the history of the state or territory that's
been fined for not having a business license.
6:28:28 PM
MR. URION, in response to Co-Chair Ramras, clarified that the
business license fee was increased by 400 percent [in 2003]. He
informed the committee that [with the business license fee
increase], the number of business licenses [sold] essentially
remained the same. He added that if [the business license fee]
is decreased to $25, the Division of Occupational Licensing
will not be effected. The biggest recipient of the funds from
[the business license fee] is the Alaska Travel Industry
Association (ATIA), which receives $2.5 million. Other
recipients include: the Office of Economic Development, the
Division of Community Advocacy, the Division of Occupational
Licensing, legislative grants, the Office of the Governor, and
the Tax Division within the DOR.
6:30:27 PM
REPRESENTATIVE LYNN inquired as to the point of having a
[business] license if a noncompliance fine is never collected.
MR. URION explained that the Division of Occupational Licensing
doesn't want to punish those who aren't in compliance, but would
rather have them be in compliance. In further response to
Representative Lynn, he informed the committee that the division
doesn't have the means to "go after" those who aren't in
compliance. Therefore, he asked the legislature to change that.
The fine for noncompliance is $2,000. If [the business license
fee is decreased] to $25, he asked that the legislature make
[not having a business license] a misdemeanor. He opined that
if the division was able to collect a [noncompliance] fine,
[business license fees] would be a lot easier to enforce.
6:31:56 PM
MR. URION added that another thing the legislature would be able
to do if it decided not to [decrease the business license fee]
to $25, is allow [Alaskans] with multiple lines of business to
[conduct business with] one business license. Currently, the
law reads that the Division of Occupational Licensing has to
sell business licenses for every line of business.
6:32:35 PM
CO-CHAIR RAMRAS referred to Section 1, lines 5-7, which read:
"If a person knowingly engages in a business in the state
without having a current license issued under (a) of this
section, the person is guilty of an infraction and may be fined
up to $50." He asked, "Is that severe enough, in your
estimation?"
MR. URION replied yes.
CO-CHAIR RAMRAS related his understanding that Mr. Urion would
recommend that a member make a conceptual amendment to further
consolidate business licenses.
6:33:26 PM
MR. URION answered that it depends on whether the committee is
going to [decrease the business license fee] to $25, in which
case [consolidating business licenses] "probably won't make that
much of a difference." He added that he would be able to bring
the committee the amendment that would allow one business
license for multiple lines of business, as long as he/she
operates under the same business name.
6:34:29 PM
CO-CHAIR RAMRAS, in regard to when the business license fee was
increased and the funds were [allocated] to ATIA and other
agencies, inquired as to from where ATIA and other agencies
[previously received] funding.
MR. URION answered that it was a new funding source.
6:35:33 PM
REPRESENTATIVE COGHILL opined that when [the legislature] voted
for [House Bill 162 in 2003] it was a "pretty good sized jump."
He expressed his reluctance to "rapid change" with the
justification based on inflation, for example. He added, "I
don't think we're probably going to have the money to reimburse
them."
6:38:19 PM
REPRESENTATIVE CRAWFORD discussed the difference between a fee
and a tax. A fee is supposed to be the amount of money the
government charges to run a program or department. A tax is a
revenue measure that's designed to [generate] money and run the
general fund. He expressed his belief that [the business
license fee] isn't truly a fee. He said, "It's a tax - a
revenue measure - and we just didn't call it that."
6:39:58 PM
CO-CHAIR NEUMAN, upon determining that no one else wished to
testify, announced the closure of public testimony.
6:40:19 PM
REPRESENTATIVE LYNN moved to report CSHB 416, Version 24-
LS1555\F, Bannister, 2/10/06, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 416(EDT) was reported out of the House
Special Committee on Economic Development, International Trade
and Tourism.
^TESTIMONY ON PROPOSED COMMITTEE RESOLUTION - ALASKA ASSOCIATION
OF FUTURE FARMERS OF AMERICA
6:40:47 PM
CO-CHAIR NEUMAN announced that the final order of business would
be testimony on a proposed House Special Committee on Economic
Development, International Trade and Tourism resolution from the
Alaska Association of Future Farmers of America (FFA).
6:41:29 PM
CO-CHAIR RAMRAS informed the committee of his intent to
introduce a resolution on behalf of the House Special Committee
on Economic Development, International Trade and Tourism in
regard to [marketing] Alaska produce to the [tourism] industry.
Approximately 1 million cruise ship [passengers] travel through
Alaska per year. The majority of the [Alaska] produce is a
product of the Delta [Junction] and Matanuska-Susitna regions.
He noted that he's been working with the Alaska Hotel Lodging
Association as well as the Alaska Travel Industry Association
(ATIA) to coordinate an effort to elevate [the status of] Alaska
produce to that of wild Alaska salmon. He added that Alaska
carrots and potatoes have a higher sugar and water content,
which makes them much sweeter than other [carrots and potatoes].
6:44:12 PM
HANNAH HARRISON, President, Alaska Association of Future Farmers
of America (FFA), opined that [marketing Alaska produce to the
tourism industry] is an incredible opportunity to broaden
Alaska's economic and industrial future as well as [form] a
partnership with youth of Alaska, such as those in the FFA. The
FFA is an organization that's based upon three key objectives:
premier leadership, personal growth, and career success in
Alaska's economy and industry. She relayed that the FFA will be
an unwavering partner.
6:45:23 PM
MS. HARRISON characterized the idea of [marketing Alaska produce
for the tourism industry] as a seed that needs the support [of
the legislature] in order that the idea flourish into a new
opportunity for Alaska's economy and youth.
6:46:20 PM
MS. HARRISON, in response to Co-Chair Neuman, relayed that she's
involved in [FFA] leadership opportunities - public speaking,
civic leadership, and civic involvement. The FFA is often known
for its cattle, livestock, and poultry, although it extends far
beyond that, especially in Alaska. [Members of the FFA in
Alaska] have opportunities to explore careers and growth in
agriculture and natural resources. She added that career
success is a "really big part" of the FFA program as it wants to
ensure that Alaska's future job force is educated and able to
make intelligent decisions to lead Alaska into the future.
6:47:44 PM
REPRESENTATIVE LYNN commented that the concept of marketing
Alaska produce because of its uniqueness is a fantastic idea and
has some real potential.
6:48:07 PM
CO-CHAIR RAMRAS informed the committee that he had a meeting
with [management] from Princess [Cruises]. He added that travel
writers will like [the Alaska produce idea] because they're so
fascinated with it. Alaska produce is complimentary to [Alaska]
seafood. [The idea] is a "win-win" for the Matanuska-Susitna
Valley and Delta [Junction] areas as well as the [tourism]
industry.
6:49:30 PM
CO-CHAIR RAMRAS remarked that he, Representative Stoltze, and
Co-Chair Neuman have been working on being able to present to
ATIA at the April meeting in Juneau. He opined that the Alaska
Grown program has been "wildly successful" in Safeway and Fred
Meyers. However, most tourists aren't exposed to Alaska produce
because they are eating on [cruise] ships.
6:54:08 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 6:54 p.m.
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