Legislature(2007 - 2008)BARNES 124
04/10/2007 05:00 PM House ECONOMIC DEV., TRADE, AND TOURISM
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| HB217 | |
| Presentation: Alaska Works Partnership | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 217 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
April 10, 2007
5:04 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Chair
Representative Carl Gatto
Representative Kyle Johansen
Representative Vic Kohring
Representative Bob Lynn
Representative Andrea Doll
Representative Mike Doogan
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Lindsey Holmes
COMMITTEE CALENDAR
HOUSE BILL NO. 217
"An Act relating to required onboard disclosures and displays
about tours, flight seeing operations, other shoreside
activities, and visitors bureaus; and providing for an effective
date."
- HEARD AND HELD
Presentation: Alaska Works Partnership, Inc.
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 217
SHORT TITLE: TOURISM DISCLOSURES AND NOTICES
SPONSOR(s): REPRESENTATIVE(s) HOLMES
03/22/07 (H) READ THE FIRST TIME - REFERRALS
03/22/07 (H) EDT, JUD
04/03/07 (H) EDT AT 5:30 PM CAPITOL 106
04/03/07 (H) Heard & Held
04/03/07 (H) MINUTE(EDT)
04/10/07 (H) EDT AT 5:00 PM BARNES 124
WITNESS REGISTER
RICHARD BENEVILLE, Owner
Nome Discovery Tours;
Member,
Nome Chamber of Commerce;
Member, Board of Directors
Alaska State Chamber of Commerce
Nome, Alaska
POSITION STATEMENT: Testified during the hearing on HB 217.
STAN STEPHENS, President
Stan Stephens Glacier & Wildlife Cruises
Valdez, Alaska
POSITION STATEMENT: Testified in support of HB 217.
LOREN GERHARD, Vice President
Marine Operations
Four Seasons Tours
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 217.
ROBERT JACOBSEN, President
Wings of Alaska and Wings Airlines
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 217.
MIKE ANDREWS, Director
Alaska Works Partnership Inc.,
Anchorage, Alaska
POSITION STATEMENT: Provided the presentation on Alaska Works
Partnership, Inc.
ACTION NARRATIVE
CHAIR MARK NEUMAN called the House Special Committee on Economic
Development, International Trade and Tourism meeting to order at
5:04:04 PM. Representatives Doll, Doogan, Kohring, Gatto, and
Neuman were present at the call to order. Representatives Lynn
and Johansen arrived as the meeting was in progress.
Representative Holmes was also in attendance.
HB 217-TOURISM DISCLOSURES AND NOTICES
5:04:24 PM
CHAIR NEUMAN announced that the first order of business would be
HOUSE BILL NO. 217, "An Act relating to required onboard
disclosures and displays about tours, flight seeing operations,
other shoreside activities, and visitors bureaus; and providing
for an effective date."
CHAIR NEUMAN opened the hearing to public testimony on HB 217.
5:06:01 PM
RICHARD BENEVILLE, owner of Nome Discovery Tours, member of the
Nome Chamber of Commerce, and board member of the Alaska State
Chamber of Commerce, expressed his belief that HB 217 is
punitive to the small business owner and to the cruise ship
companies. He added that the bill is against fair play and the
spirit of small business in Alaska. He urged the committee to
not support the [bill].
5:07:52 PM
CHAIR NEUMAN asked how the bill is anti-business.
MR. BENEVILLE stated that he was looking at a copy of the bill,
and noted the language regarding the disclosure of fees. Mr.
Beneville stated his understanding of the intent, but that the
language of the bill is counter to free enterprise. He
acknowledged that Nome does not have the cruise ship traffic of
Southeast.
5:09:07 PM
REPRESENTATIVE GATTO asked whether Mr. Beneville voted against
the Alaska Cruise Ship Initiative (initiative).
5:09:32 PM
MR. BENEVILLE answered yes.
5:09:43 PM
REPRESENTATIVE GATTO opined that, after passage of the
initiative, HB 217 was written to implement the decision by the
voters. The initiative can not be repealed, it can only be
modified.
5:10:17 PM
MR. BENEVILLE suggested that the voters may have been confused
by the wording of the initiative.
5:10:40 PM
STAN STEPHENS, president, Stan Stephens Glacier & Wildlife
Cruises, expressed his support of HB 217. Mr. Stephens stated
that he participated in the advertising against the initiative
and has always supported small business. He said that he saw
the initiative as a grudge against the cruise ship industry and
the disclosures required by its passage shut down competition,
are un-American, and set a new precedent. He concluded by
saying that HB 217 will dissolve some of the problems caused by
the initiative.
5:13:04 PM
REPRESENTATIVE DOLL asked whether there should be any regulation
of cruise ship commission rates.
5:13:30 PM
MR. STEPHENS expressed his feeling that there is no need for
regulation. He said that he would not want his business pricing
to be open to his competitors.
5:14:23 PM
REPRESENTATIVE DOLL expressed her impression that the initiative
was to protect small business and to regulate the cruise ship
industry.
MR. STEPHENS opined that this initiative hurts small business
and could have an impact to businesses outside of the cruise
ship industry.
5:15:09 PM
LOREN GERHARD, vice president of Marine Operations, Four Seasons
Tours, informed the committee that Four Seasons Tours employs
about 70 workers in the summer, and contributes $1 million to
the local economy. His business sells its tours on the cruise
ships and to do so must meet standards of quality and of volume.
He stressed that his company uses invoices to transfer payments
and that transactions are monitored by taxing agencies. Mr.
Gerhard said that his negotiations with the cruise ships are
private, as are most negotiations between retailers and
wholesalers. He expressed his belief that there are no other
businesses, outside of tours sold on the ships, that are
required to disclose wholesale prices. To be fair, he said, all
commissions for travel agents should also be disclosed. He
opined that the initiative was about the head tax, and the
voters were unaware of this provision. Mr. Gerhard told the
committee that he supports HB 217 because it reveals that a
commission is paid, but will not disclose the wholesale price.
He concluded by saying that the legislature has the authority
and responsibility to modify the initiative.
5:19:54 PM
CHAIR NEUMAN asked whether Mr. Gerhard would describe his
business as a wholesale provider to the cruise ship industry.
5:20:17 PM
MR. GERHARD answered yes. In response to a question, he noted
that there is no commitment from the ship to a specific level of
volume. The commission is negotiated periodically and is a
routine business decision that balances a lower profit margin
with a level of potential volume.
5:21:08 PM
CHAIR NEUMAN asked whether a new competitor has an equal
opportunity to approach the cruise industry about sales aboard
the ships.
5:21:51 PM
MR. GERHARD responded yes. However, the cruise ship companies
will decide what activities to offer to their passengers and
cannot offer every vendor. He opined that if the industry
discloses the availability of other shoreside vendors, that
disclosure should satisfy the intent of the initiative. In
addition, the tours offered on the ship are a better product for
the passengers.
5:23:02 PM
CHAIR NEUMAN asked whether there is a high level of competition
between on-shore tour operators for a sales arrangement with the
cruise lines.
5:23:32 PM
MR. GERHARD replied that the strong competition is the reason he
does not want to disclose his wholesale price.
5:23:45 PM
REPRESENTATIVE DOLL asked whether Mr. Gerhard has an interest in
knowing what discount rates his competitors pay to the cruise
lines.
5:24:09 PM
MR. GERHARD assured the committee that he would be interested in
the information; however, the state government does not have the
right to require this information to be made public.
5:25:32 PM
REPRESENTATIVE DOOGAN remarked:
We had an election in which the voters decided that
this should be done. ... Apparently, if I understand
your argument correctly, you don't like that they did
that, you don't think it's fair that they did that and
you think that we ought to do something that changes
what they approved, under the theory that they didn't
really understand what they were doing....
5:26:19 PM
MR. GERHARD acknowledged that the initiative has passed, even
though tour operators tried to inform the public about the
disclosure measure. He expressed his belief that the intent of
the voters is met by HB 217.
5:27:11 PM
REPRESENTATIVE DOOGAN asked:
Don't we have to assume that the voters knew exactly
what they were doing and voted to do this on purpose?"
... If we did that, don't we have to assume that their
intent was to do just this, to require exactly what
the initiative says it requires?
5:27:40 PM
MR. GERHARD remarked:
I think that the intent is, is to describe to tourists
that the relationship with these cruise ship companies
involves a commission. I have no problem admitting
that. But for me to have to provide my precise ...
wholesale prices, it's overreach, is what it is.
5:28:17 PM
REPRESENTATIVE DOOGAN said:
This is not, in my view, a particularly discretionary
matter for us. ... I don't think that we can assume
that we know why they did it, or what parts of it they
were voting on, or what parts of it they didn't pay
any attention to. ... I just want everybody who wants
to make this argument to the committee to understand
what it is they're asking us to do here.
5:29:30 PM
MR. GERHARD expressed his understanding that the change can be
made through the Legislative Legal and Research division of the
Legislative Affairs Agency.
5:30:04 PM
CHAIR NEUMAN observed that it is the legislature's job to review
the initiative; in fact, subtle changes have been made to the 90
Day Session Initiative.
5:30:33 PM
REPRESENTATIVE GATTO recalled that the Gas Reserves Tax
Initiative failed and inquired whether it was appropriate for
the legislature to repeal the initiative and impose the tax. He
inquired also whether the legislature should alter the 90 Day
Session Initiative. He then said:
Should we go to this bill, in front of us, and say the
public probably wasn't aware of what they were voting
on for the head tax. What they were really voting on
was part four, which was the information that is
supposed to be revealed. ... I don't want to simply
object to the people's wishes out of hand and say, and
support essentially what your testimony was, was that
people may have erred, in not understanding what was
there. ... I don't know how I could possibly sit here
and say they didn't know. ... What I will do, though,
and I'm in favor of the bill myself, is to say, I
think what we can do to make this somewhat easier for
businessmen, ... but not to repeal it.
5:33:50 PM
REPRESENTATIVE LYNN stated that Sec. 1 of the bill includes what
the voters approved and expands to include another alternative
disclosure. He indicated his support of the bill at this time.
5:34:46 PM
ROBERT JACOBSEN, president of Wings of Alaska and Wings
Airlines, informed the committee that his small airline began to
sell tours on board the ships 25 years ago. Last year, Wings
flew 80,000 passengers on excursions. He expressed his belief
that initiatives should be about a single issue and that the
lieutenant governor made a mistake by sanctioning the Alaska
Cruise Ship Initiative. If the initiative concerned one issue,
there would be no doubt about the intent of the voters. Mr.
Jacobsen said that competition is open to new operators. In
fact, one marine tour company began operations five years ago,
and it was able to establish sales on the cruise ships without
any problem. He said that HB 217 refers to his business as a
"paid promotion" and that is an inaccurate representation of his
airline. He remarked:
But, if we're going to say that ... [in HB 217],
"other alternatives may be available at a lower
price," then I suggest that we also say that "they are
also available at a higher price, and they are also
available at lesser quality, they're also available by
fly-by-nights" ... How far do we go there, when we
start saying that they're available at a lower price?
...
5:39:24 PM
CHAIR NEUMAN stated that the language in the bill is just to
inform the passengers about alternatives.
5:39:36 PM
MR. JACOBSEN agreed that alternatives are great; however, the
alternatives must be qualified with more information.
5:39:53 PM
REPRESENTATIVE GATTO stated his belief that on-shore tours have
no opportunity to compete with the tours sold on ships. The
motivation for this part of the initiative is that other
businesses can not get to the passengers to market their tours.
He said this raises the question of whether the cruise ships own
the port or whether there is a free market.
5:41:52 PM
MR. JACOBSEN replied that the alternatives referred to should
include: higher value, lesser value, lesser quality, and fly-
by-nights.
5:42:41 PM
CHAIR NEUMAN announced that public testimony was closed for this
meeting and that the sponsor will present a committee substitute
at the meeting scheduled for April 17, 2007.
[HB 217 was held in committee]
^Presentation: Alaska Works Partnership
CHAIR NEUMAN announced that the final order of business would be
a presentation by the Alaska Works Partnership.
5:43:49 PM
MIKE ANDREWS, Director of Alaska Works Partnership Inc. (AWP),
informed the committee that AWP is a consortium of Alaska
building trades unions and their apprenticeship programs. Its
focus is on the construction industry and on moving Alaskans
into jobs in the construction industry. He presented a video
depicting scenes from AWP's training program for future pipeline
workers. Mr. Andrews stated that the pipeline program was also
supported by the pipeline unions, the North Slope Contractors
Association, and the Department of Labor (DOL), and has trained
297 apprentices with an employment rate of 95 percent.
5:51:01 PM
MR. ANDREWS continued to say that the Denali Commission and the
U. S. Department of Labor provided major funding to establish
the AWP in 2000. The Trade Apprentices program accepts 50 to 60
applicants per year and the Technical Trade courses are paid for
by the private sector. The Building Maintenance and Repair
Apprenticeship program has built over 350 homes in Western
Alaska and has provided labor to work on schools, clinics,
roads, and safe water projects for nine major employers.
5:53:08 PM
CHAIR NEUMAN asked whether reductions in federal and state
funding will affect AWP.
5:53:13 PM
MR. ANDREWS expressed his hope that federal and state funds
will continue to support the State Training Employment Program
(STEP) and the Technical Vocational Education Program (TVEP).
The AWP will continue to provide training with the support of
the industry. Mr. Andrews continued his presentation by noting
that the award winning Women in the Trades program was created
in 2003 to increase the percentage of women working in
construction. Forty applicants have been accepted in the
program. The Helmets to Hardhats (H2H) program is conducted in
partnership with the U. S. Department of the Army, Department of
Defense, the National Building Construction Trades, and the
national H2H organization. In 2006, 37 H2H apprentices
participated in training with additional support from the state
for job placement for veterans. Mr. Andrews said that the
Pipeline Training program has resulted in high employment for
graduates. This program received $1.5 million for pipeline
training equipment and $3 million for construction of a pipeline
training facility from the state. The Fairbanks training
facility will also receive $3 million of federal funds dedicated
by the Alaska Natural Gas Pipeline Act of 2005.
5:56:33 PM
CHAIR NEUMAN asked how interested businesses contact AWP for
information about training programs.
5:56:54 PM
MR. ANDREWS replied that employers that are committed to hiring
trainees can contact his office. The AWP will then look for
resources and other interested parties in the same community to
explore the feasibility of a training course or academy.
5:57:22 PM
CHAIR NEUMAN suggested that committee members contact Mr.
Andrews for further information.
5:57:40 PM
MR. ANDREWS called the committee's attention to the pipeline
training facility to be built Fairbanks. Design and engineering
plans are underway; however, he estimated that $3 million will
be needed to complete the facility. In addition, mobile
Construction Academies provide intensive training for 150 youth
aged 17 to 24 years, in conjunction with nine school districts.
He added that the emphasis on math at the academies has
increased math scores for participating students. In 2006, the
state funded a $1 million grant for the development of the
Anchorage Construction Academy which opened in October, 2006.
This project was completed through a partnership with the
Associated General Contractors, Anchorage Home Builders,
Anchorage School District, and others. Mr. Andrews stated that
after school classes are held at the King Career Center and
evening classes are held for adults. Seven hundred high school
students and one hundred and fifty adults have participated.
The AWP is planning to expand the mobile vocational education
program to the regions of Mat-Su, Kenai, Fairbanks, and
Southeast. In conclusion, Mr. Andrews said that the AWP is
working to close the construction skills gap with a cost-
effective and efficient system that is supported by the
construction industry.
6:02:09 PM
CHAIR NEUMAN observed that the state Department of Education
(DOE) has established benchmarks for core subjects. He asked
whether AWP and the industry can support youth programs and
connect on-the-job training with school benchmarks for grade
level achievement. In this way, private industry can provide
students with training that will also qualify as credits toward
graduation.
6:04:21 PM
MR. ANDREWS replied that each school district is different and
state and federal standards, coupled with limited funding, can
restrict possible training opportunities. Schools, he said, are
supportive of AWP programs that do not take school instruction
time or increase planning responsibilities for teachers. The
AWP programs provide an instructional kit and create solutions
for schools that wish to increase vocation training. He
stressed that legislators need to bring back vocational training
in schools to utilize applied math skills and to increase high
school graduation rates. Studies have shown that vocational
education will increase math and science scores and keep
students in school.
6:07:16 PM
CHAIR NEUMAN opined that applied math is more appealing to many
students.
6:07:40 PM
REPRESENTATIVE JOHANSEN asked how an initial contact, such as
the one made by the Ketchikan Homebuilders Association, would be
addressed.
6:08:26 PM
MR. ANDREWS responded that the AWP will encourage the company to
talk with the high school and college, and related industries,
to begin a dialog and to search for the resources and talent in
the community. Local and regional business leaders will
determine the future need for skilled workers in their
community, based on planned future projects. He stressed that
many different occupations have a need for workers with similar
skills, such as welding. The best training will teach skills
that can be adapted to meet the needs of a variety of
construction businesses. The AWP requires that the businesses
in the communities it serves will be ready to hire the trainees.
6:10:58 PM
REPRESENTATIVE JOHANSEN noted that the local community must be
part of the initial process.
6:11:16 PM
MR. ANDREWS added that the AWP periodically has money for rural
training dollars from the Denali Commission.
6:12:17 PM
CHAIR NEUMAN asked how a large industry, such as Northrop
Grumman Corporation, can be involved in developing
apprenticeship programs.
6:12:49 PM
MR. ANDREWS answered that the state administration must provide
for workforce development. Many large corporations want workers
with basic skills and math abilities and they will teach the
technical skills as on-the-job training. He said that the world
of work requires highly technical skills and other states are
providing education at the 13th and 14th year to prepare
students for employment.
6:14:32 PM
CHAIR NEUMAN asked what can be done at the high school level.
6:14:48 PM
MR. ANDREWS reiterated that an investment by the state in
vocational education is needed. He relayed that, before 1985,
Alaska had high levels of vocational education in the high
schools and high graduation rates, also. As the funding for
education was decreased and vocational programs and facilities
were eliminated, graduation rates declined.
6:15:41 PM
CHAIR NEUMAN observed that rural areas have difficulty meeting
the requirements for core subjects mandated by the No Child Left
Behind Act of 2002. Staffing highly qualified status teachers
in small schools is costing school districts additional funds
for core subjects and will also keep vocational programs from
being re-instated.
6:16:54 PM
REPRESENTATIVE JOHANSEN asked about the attitude that school
districts hold toward vocational education.
6:17:35 PM
MR. ANDREWS responded that school districts are becoming more
interested in vocational education but do not have the resources
necessary to provide it. Again, when the AWP is providing
instructors and after school programs, they are very well
received.
6:18:29 PM
CHAIR NEUMAN observed that special needs and vocational
education is funded from the same budget.
6:19:03 PM
REPRESENTATIVE DOLL stated that the University of Alaska has
apprentice programs and is well connected with the high schools.
She suggested that there is a need for more cooperation with the
university.
6:19:47 PM
MR. ANDREWS affirmed that the AWP does work with the University
of Alaska and with the Technical Education Center in Kotzebue.
He pointed out that there are many opportunities for students to
obtain dual credits for high school and college. Industry,
labor, and education partnerships are vital for workforce
development.
6:20:38 PM
REPRESENTATIVE GATTO observed that the new Mat-Su Career and
Technical High School experienced a disappointing enrollment.
6:21:12 PM
MR. ANDREWS informed the committee that the school experienced
problems attracting students from their home schools and
providing transportation for students from throughout the
district. The AWP is interested in using the facility for
training adults during evening hours and will be assisting the
school district with new ideas.
6:22:08 PM
CHAIR NEUMAN opined that the new program teaches skills
beginning in 9th grade and perhaps a student is too young to
identify his or her interests.
6:22:55 PM
MR. ANDREWS clarified that the Mat-Su Career and Technical High
School is incorporating standard academic courses with technical
education and will be opening soon.
6:23:28 PM
REPRESENTATIVE GATTO opined that students are often loyal to
their neighborhood schools.
6:23:57 PM
MR. ANDREWS added that sports were not offered at the new school
and that transportation a big problem. He noted that funds were
available to bus Anchorage students to the King Career Center
and enrollment there is very high.
6:24:47 PM
CHAIR NEUMAN asked how much money is needed to be directed
toward vocational education.
6:25:12 PM
MR. ANDREWS answered that in the private sector the construction
trade and union apprenticeship programs are funded at the $10
million level to train 1,600 apprentices and 3,000 journeymen.
The return on investment for vocational training is very high
based on private sector investment, and investment by the state
will entice industry to participate at even higher levels.
6:26:47 PM
CHAIR NEUMAN suggested that committee members contact Mr.
Andrews for ideas about educational opportunities in their
districts.
6:27:21 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 6:27 p.m.
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