Legislature(2007 - 2008)HOUSE FINANCE 519

04/17/2007 01:30 PM House FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 147 TOURISM CONTRACT MATCHING FUNDS TELECONFERENCED
Heard & Held
+ HB 159 STILLBIRTH CERTIFICATE TELECONFERENCED
Heard & Held
+ HB 205 REAL ESTATE BROKERS/SALESPERSONS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 133 ELECTRONIC MONITORING OF GANG PROBATIONER TELECONFERENCED
Moved CSHB 133(FIN) Out of Committee
<Bill Held Over from 4/13/07>
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 17, 2007                                                                                           
                         1:43 P.M.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 1:43:41 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas Jr.                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Speaker John Harris; Representative  Bob Buch; Representative                                                                   
Carl Gatto;  Dwayne Peeples, Deputy Commissioner,  Department                                                                   
of Corrections; Charisse Millett,  Staff, Representative John                                                                   
Harris;  Sandra  Wilson, Intern  Staff,  Representative  Carl                                                                   
Gatto;  Eleanor  Wolfe,  Staff,  Representative  Kurt  Olson;                                                                   
Philip Mitchel, State Registrar,  Bureau of Vital Statistics,                                                                   
Department of  Health & Social Services; Brett  Carlson, Vice                                                                   
Chair,  Alaska  Travel  Industry   Association  (ATIA);  Stan                                                                   
Stephens, President, Stan Stephens Wildlife Cruises, Valdez                                                                     
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Richard Olson, Founder, National  Stillborn Society, Arizona;                                                                   
Dave Feeken, Alaska Association of Realtors, Anchorage                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 133    An Act relating to requiring  electronic monitoring                                                                   
          as a special condition of probation for offenders                                                                     
          whose offense was related to a criminal street                                                                        
          gang.                                                                                                                 
                                                                                                                                
          CS HB 133 (FIN) was reported out of Committee with                                                                    
          a "no recommendation" and with zero note #1 by the                                                                    
          Department of Law and indeterminate notes #2, #3                                                                      
          and #4 by the Department of Administration,                                                                           
          Department of Corrections and Alaska Court System.                                                                    
                                                                                                                                
HB 147    An Act relating to matching  funds in state tourism                                                                   
          marketing contracts with trade associations.                                                                          
                                                                                                                                
          HB 147 was HEARD and HELD in Committee.                                                                               
                                                                                                                                
HB 159    An Act  relating to  the issuance of  a certificate                                                                   
          of birth resulting in a stillbirth.                                                                                   
                                                                                                                                
          HB 159 was HEARD and HELD in Committee.                                                                               
                                                                                                                                
HB 205    An  Act relating  to  real estate  broker and  real                                                                   
          estate salesperson licensing; and providing for an                                                                    
          effective date.                                                                                                       
                                                                                                                                
          HB 205 was HEARD and HELD in Committee.                                                                               
                                                                                                                                
1:44:38 PM                                                                                                                    
HOUSE BILL NO. 133                                                                                                            
                                                                                                                                
     An Act relating to requiring electronic monitoring as a                                                                    
     special condition of probation for offenders whose                                                                         
     offense was related to a criminal street gang.                                                                             
                                                                                                                                
REPRESENTATIVE  BOB BUCH,  SPONSOR,  referenced  the memo  he                                                                   
submitted   to  the  Committee   dated  4/12/07,   addressing                                                                   
previous  concerns  voiced  by Representative  Hawker.    The                                                                   
issues  were addressed  during testimony  taken in the  House                                                                   
Judiciary  Committee.    He  added   that  there  is  nothing                                                                   
unconstitutional about  the bill before the  Committee, which                                                                   
is fiscally responsible.                                                                                                        
                                                                                                                                
Representative  Hawker  noted that  he  had  spoken with  the                                                                   
Department of  Law & the law enforcement  community regarding                                                                   
these  concerns and  thought  that the  intended  application                                                                   
would be narrowly utilized in the current form.                                                                                 
                                                                                                                                
1:48:19 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault   mentioned  the  fiscal  note   from  the                                                                   
Department  of  Corrections  and  asked  what  the  intensive                                                                   
supervision  of  the  current  monitoring  system  would  be.                                                                   
Representative Buch explained  that in the original drafting,                                                                   
the use of "continuous" caused  confusion as well as a fiscal                                                                   
note.   The interpretation by  the Department  of Corrections                                                                   
differed from the State Police  Department.  He recommended a                                                                   
better way to monitor.                                                                                                          
                                                                                                                                
DWAYNE   PEEPLES,   DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                   
CORRECTIONS,  addressed the continuous  monitoring,  in which                                                                   
there would  be a 1 to 15  ratio for probation officers.   He                                                                   
discussed other  adjustments reducing  the pool of  potential                                                                   
bodies  by  removing  the  reference  to  misdemeanors  being                                                                   
charged to  the felony  category.   The fiscal narrative  has                                                                   
remained the same, documenting  the pool.  Mr. Peeples noted,                                                                   
currently,  the  Department is  using  a  1 to  40  probation                                                                   
officer  ratio  for  problematic   probations,  reducing  the                                                                   
numbers.  Due  to previous bill changes, the  Department does                                                                   
not know when candidates will  appear under the Department of                                                                   
Correction's supervision.                                                                                                       
                                                                                                                                
1:52:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault assumed that  the Department of Corrections                                                                   
would handle  juveniles  within the program.   He  understood                                                                   
that the current  ratio, however, was concerned  if prisoners                                                                   
moving outside  areas they do  not currently live in  and how                                                                   
they  would be  monitored.   Mr.  Peeples  explained that  by                                                                   
removing  the word  "continuous",  their  movements would  be                                                                   
reviewed on  a daily  basis, making  sure they are  complying                                                                   
with the conditions of probation.                                                                                               
                                                                                                                                
Representative Hawker  asked if the fiscal note  was based on                                                                   
the 96  offender's currently on  probation, asking if  it was                                                                   
the same  criteria for  the mandatory  element.  Mr.  Peeples                                                                   
did not  know; it is  now the current pool  & no one  in that                                                                   
pool has passed the aggravating probation factor hurtle.                                                                        
                                                                                                                                
Representative Hawker  inquired if the factor  was determined                                                                   
by the  judge at the  time of conviction.   Mr.  Peeples said                                                                   
yes and that only  two have reached that as reported.   It is                                                                   
a  moving target  & the  prosecutors  will need  to bring  it                                                                   
forward, there is an incentive.                                                                                                 
                                                                                                                                
Representative  Hawker understood  that the  bill would  have                                                                   
future advantage.  He pointed  out that the fiscal note is an                                                                   
unreasonable assumption  and is not supported by  the body of                                                                   
testimony.  Mr. Peeples pointed  out that the current version                                                                   
provides a sunset date.                                                                                                         
                                                                                                                                
1:58:27 PM                                                                                                                    
                                                                                                                                
Representative Buch  said it is  important to place  a sunset                                                                   
in order  to determine  if the  project is  functional.   The                                                                   
sunset is five years.                                                                                                           
                                                                                                                                
Co-Chair Meyer  indicated concern with  the size of  the note                                                                   
and asked  if three  years could  work.  Representative  Buch                                                                   
said  the Department  of  Corrections indicated  three  years                                                                   
would not  be long  enough to  gather and implement  required                                                                   
data.                                                                                                                           
                                                                                                                                
Representative  Thomas  asked  where the  convicts  currently                                                                   
are.   Representative  Buch replied  they  are not  addressed                                                                   
through the legal  issues of the legislation.  HB  133 is the                                                                   
initial step,  providing tools  to the  police force  so that                                                                   
they  can   enact  some-kind   of  a   stop-gap  to   prevent                                                                   
recidivism.  Mr.  Peeples thought that most  are concentrated                                                                   
in  the Anchorage  area;  no one  yet  has  gone through  the                                                                   
program.                                                                                                                        
                                                                                                                                
2:02:33 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to  REPORT CS HB 133 (FIN) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS HB  133 (FIN)  was reported  out of  Committee with  a "no                                                                   
recommendation" and  with zero note  #1 by the  Department of                                                                   
Law and indeterminate  notes #2, #3 and #4  by the Department                                                                   
of  Administration,  Department  of  Corrections  and  Alaska                                                                   
Court System.                                                                                                                   
                                                                                                                                
                                                                                                                                
AT EASE:       2:04:04 PM                                                                                                     
RECONVENE:     2:05:26 PM                                                                                                     
                                                                                                                                
HOUSE BILL NO. 159                                                                                                            
                                                                                                                                
     An Act relating to the issuance of a certificate of                                                                        
     birth resulting in a stillbirth.                                                                                           
                                                                                                                                
2:05:43 PM                                                                                                                    
                                                                                                                                
SANDRA WILSON,  STAFF &  INTERIM, REPRESENTATIVE  CARL GATTO,                                                                   
noted that  HB 159 is  meant to help  bring closure  to those                                                                   
who have suffered the loss of  a stillborn child by providing                                                                   
them a  Birth Certificate  reflecting that  they had  a child                                                                   
who was stillborn.   In existing law, parents  of a stillborn                                                                   
child  receive a  Death Certificate.   The  bill would  allow                                                                   
parents the option  of requesting a certificate  of birth for                                                                   
their child.   The Birth Certificate would be  optional.  She                                                                   
added that there are an increasing  number of states that are                                                                   
now offering  Birth Certificates  for parents of  stillborns.                                                                   
Ms. Wilson urged the Committee's support for HB 159.                                                                            
                                                                                                                                
2:07:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CARL  GATTO, SPONSOR, spoke to  the "darkness"                                                                   
for those mothers  that have stillborn babies.   HB 159 would                                                                   
help provide  that family a sense  of closure by  providing a                                                                   
document, acknowledging  that there was a pregnancy  and that                                                                   
there was a birth.                                                                                                              
                                                                                                                                
2:09:58 PM                                                                                                                    
                                                                                                                                
Representative Gara indicated  he supports the idea, however,                                                                   
asked  if it  was something  that  people want.   Ms.  Wilson                                                                   
explained that the  bill had been requested  by a constituent                                                                   
and since that time, there has been wide support indicated.                                                                     
                                                                                                                                
Representative  Gara asked how  women would be  notified that                                                                   
they  have the  right  to apply  for the  Birth  Certificate.                                                                   
Representative Gatto commented  that the legislation has been                                                                   
implemented  in  fifteen  states,   pointing  out  the  birth                                                                   
certificate  would clearly indicate  that it  was not  a live                                                                 
birth; hence,  none would  be able to  apply for  a Permanent                                                                   
Fund Dividend or State aid.                                                                                                     
                                                                                                                                
2:12:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault acknowledged  that loosing a child in still                                                                   
birth is the same as having a death in the family.                                                                              
                                                                                                                                
Representative  Thomas  asked  if the  effective  date  would                                                                   
allow  women  who in  the  past  that had  experienced  still                                                                   
births,  to  be  able  to get  a  certificate.    Ms.  Wilson                                                                   
responded  that Section  F provides language  which allows  a                                                                   
parent who  has had  a still born  child to request,  through                                                                   
Vital Statistics,  a Birth  Certificate and that  information                                                                   
would   be   taken   off   the   fetal   Death   Certificate.                                                                   
Representative  Gatto  added   that  the  Division  of  Vital                                                                   
Statistics  was willing to  go back  and offer that  service.                                                                   
Representative   Thomas   asked   how  that   would   happen.                                                                   
Representative  Joule pointed out  that Paragraph  F contains                                                                   
information on retroactive birth information.                                                                                   
                                                                                                                                
Co-Chair  Meyer  inquired how  the  20-week number  had  been                                                                   
determined.  Representative Gatto  noted that when looking at                                                                   
other  state's  legislation,  20-weeks  was  the  identifying                                                                   
length beyond which accounted  for.  Fetal Death Certificates                                                                   
are issued at 20 weeks.                                                                                                         
                                                                                                                                
2:16:11 PM                                                                                                                    
                                                                                                                                
Vice Chair  Stoltze asked  if the bill  was intended  to only                                                                   
cover  still born  births.   Representative  Gatto  responded                                                                   
that  the definition  of  a still  born is  death  of a  baby                                                                   
carried  in the  womb.   Vice  Chair Stoltze  questioned  the                                                                   
legal implications of the bill.                                                                                                 
                                                                                                                                
Representative  Gara  was  comfortable   allowing  the  Birth                                                                   
Certificate  for  those families  that  had  past still  born                                                                   
births.  He  pointed out that the definition  only applies to                                                                   
that  section  and  would not  affect  definitions  in  other                                                                   
statutes, pointing out on Page 2, Line 15.                                                                                      
                                                                                                                                
2:18:33 PM                                                                                                                    
                                                                                                                                
PHILIP MITCHEL, STATE REGISTRAR,  BUREAU OF VITAL STATISTICS,                                                                   
DEPARTMENT OF HEALTH & SOCIAL  SERVICES, testified in support                                                                   
of  the bill,  noting that  they had  received requests  from                                                                   
parents to acquire a certificate  as proposed.  He added that                                                                   
the Division has addressed retroactivity on the bill.                                                                           
                                                                                                                                
2:20:05 PM                                                                                                                    
                                                                                                                                
RICHARD  OLSON,  (TESTIFIED  VIA   TELECONFERENCE),  FOUNDER,                                                                   
NATIONAL  STILLBORN SOCIETY,  ARIZONA,  noted that  he was  a                                                                   
father of  a stillborn  birth and  after much grief,  created                                                                   
the National Stillbirth Society.   He estimated the number of                                                                   
stillbirths that  occur in the  United States each year.   He                                                                   
voiced support  for the certificate, indicating  that the 20-                                                                   
week number had been agreed upon  by all the states and is an                                                                   
arbitrary point.   He emphasized  that people  really support                                                                   
and want the proposed legislation.                                                                                              
                                                                                                                                
2:27:20 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY CLOSED                                                                                                       
                                                                                                                                
Co-Chair  Meyer proposed  holding  the bill  in Committee  to                                                                   
deal  with  the  amendment  addressing  retroactivity.    Ms.                                                                   
Wilson noted that she had checked  with the Department of Law                                                                   
and  that  language had  been  redrafted  in the  House  HESS                                                                   
Committee.    Representative  Gara  supported  the  language,                                                                   
stating it is correct.  Mr. Mitchel  stated that the language                                                                   
was taken from  other states, who passed  legislation similar                                                                   
to HB 159.                                                                                                                      
                                                                                                                                
HB 159 was HELD in Committee for further consideration.                                                                         
                                                                                                                                
2:29:23 PM                                                                                                                    
HOUSE BILL NO. 205                                                                                                            
                                                                                                                                
     An Act relating to real estate broker and real estate                                                                      
     salesperson licensing; and providing for an effective                                                                      
     date.                                                                                                                      
                                                                                                                                
ELEANOR WOLFE,  STAFF, REPRESENTATIVE  KURT OLSON,  testified                                                                   
that HB  205 would clarify and  strengthen a number  of items                                                                   
in current  statute and increase  consumer protection  in the                                                                   
buying  and selling  process of  homes.   The Association  of                                                                   
Alaska Realtors (AAR) strongly  supports the bill.  She noted                                                                   
that   the   committee  substitute   contains   the   changes                                                                   
recommended  by  the  Division   of  Occupational  Licensing,                                                                   
Department of Commerce, Community & Economic Development.                                                                       
                                                                                                                                
2:31:03 PM                                                                                                                    
                                                                                                                                
Representative  Gara referenced  Page 3,  which provides  the                                                                   
Association  the judgment to  not suspend  a license  if they                                                                   
are  convicted  of a  crime  of "dishonesty",  which  affects                                                                   
their ability to practice.                                                                                                      
                                                                                                                                
2:32:13 PM                                                                                                                    
                                                                                                                                
DAVE   FEEKEN,   (TESTIFIED   VIA   TELECONFERENCE),   ALASKA                                                                   
ASSOCIATION  OF REALTORS,  ANCHORAGE, stated  that HB  205 is                                                                   
the  modernization  of  existing  statutes  related  to  real                                                                   
estate  brokerage, addressing  issues  of  education of  real                                                                   
estate  licensees and  the supervision  relationship  between                                                                   
brokers and licensees.                                                                                                          
                                                                                                                                
Sections  1, 4, 5,  & 6:   Realtors  proposes clarifying  the                                                                   
issuing a license to persons convicted  of felonies.  Current                                                                   
law is unclear  as to time elapses since the  completion of a                                                                   
sentence   for  those   crimes.     HB   205  clarifies   and                                                                   
standardizes the 7  years as is required with  the broker and                                                                   
the  associate broker  license  with the  language needed  to                                                                   
protect  the  public  from  people   convicted  of  felonies.                                                                   
Additionally,  it  standardizes  language  for  all  license,                                                                   
broker,  associate   broker,  or  sales  associate,   when  a                                                                   
licensee is  convicted of a  felony or other  crime committed                                                                   
while licensed  under statute,  in the  judgment of  the real                                                                   
estate  commission,  if  the  crime  or  felony  affects  the                                                                   
ability of  that person to  practice competently  and safely,                                                                   
the commission may revoke it for a period of 7 years.                                                                           
                                                                                                                                
Section 2:  The current requirement for 20 hours of pre-                                                                        
licensing education is 20 years  old, when brokers controlled                                                                   
the information,  however,  with the  world wide web,  nearly                                                                   
80% of current buyers use the  web for their property search,                                                                   
no  home inspections,  a couple  of  loan programs  available                                                                   
from  Alaska Housing  Finance  Corporation  (AHFC) have  been                                                                   
replaced  by hundreds  from  all over  the  country, with  no                                                                   
concerns   about  wetlands  maps,   required  disclosure   of                                                                   
property  condition, predatory  lending issues,  and that  no                                                                   
one knew that mold endangered  mental capacity; the list goes                                                                   
on.                                                                                                                             
                                                                                                                                
Mr.  Feeken  stated  that  the  Real  Estate  Commission  has                                                                   
continued to increase  the required course material  for pre-                                                                   
licensing  education,  but  the   number  of  hours  has  not                                                                   
increased.   HB  205 would  increase  the required  education                                                                   
hours from 20  to 40 in order  to take the exam.   Even at 40                                                                   
hours, Alaska is the lowest in the country.                                                                                     
                                                                                                                                
Section  3:    Additionally,  the  required  topics  of  Post                                                                   
Licensing education  should be increased from 20  to 30 hours                                                                   
to  adequately  teach  the  required  course  material.    He                                                                   
pointed out that the Alaska Association  supports an increase                                                                   
in hours  verses a reduction in  course content, in  order to                                                                   
meet   the   publics   need   for   competent   real   estate                                                                   
practitioners.                                                                                                                  
                                                                                                                                
Section  7:   Multiple Business  Operations: The  issue of  a                                                                   
single  broker  owning,  operating,   or  being  employed  by                                                                   
multiple corporations  or partnerships  is further  clarified                                                                   
to  require all  organizations  to  share a  single  physical                                                                   
address.   Many brokerage  firms are  multiple companies  for                                                                   
insurance and other reasons.                                                                                                    
                                                                                                                                
Section  8:   Statutes have  always stated  that brokers  are                                                                   
responsible  for the actions  of their  licensees, until  the                                                                   
Alaska Supreme  Court ruled  in the 80's  that the  broker is                                                                   
not responsible for  conduct they had no knowledge  of, which                                                                   
requires the  broker to have  a written policy  and procedure                                                                   
addressing issues:                                                                                                              
                                                                                                                                
   1. Require real estate licensees to comply with all real                                                                     
     estate laws                                                                                                                
   2. Require real estate licensees to act fairly and                                                                           
     honestly in all dealings                                                                                                   
   3. Require real estate licensees to notify the broker or a                                                                   
     broker designee of any legal dispute or allegation of                                                                      
    wrong-doing from a seller, buyer, lesser, or lessee                                                                         
   4. Require real estate licensees to maintain regular                                                                         
     communication with the broker or a broker designee                                                                         
                                                                                                                                
Mr. Feeken  concluded,  in order to  implement the  education                                                                   
hour changes,  the Association requests an effective  date of                                                                   
Feb 1, 2008, the renewal date for all licensing.                                                                                
                                                                                                                                
2:37:46 PM                                                                                                                    
                                                                                                                                
Representative  Gara pointed out  sections in the  bill where                                                                   
the  crimes  for which  one  could  loose their  license  was                                                                   
changed and  asked if that  was for  the public's best.   Mr.                                                                   
Feeken  responded  that  in the  original  draft,  they  only                                                                   
addressed  the sales associate  license  & was language  that                                                                   
had  been  added  by  the  Department   of  Law,  wanting  to                                                                   
eliminate  specific crimes,  while  providing the  Commission                                                                   
latitude.                                                                                                                       
                                                                                                                                
2:39:21 PM                                                                                                                    
                                                                                                                                
Representative  Gara  countered   that  the  Department  most                                                                   
likely  wanted  to  give the  Commission  the  discretion  to                                                                   
revoke  the  license  for  any  felony.    He  asked  if  the                                                                   
Association would  object to leaving the language  the way it                                                                   
is, noting that if the felony  is already on the books, it be                                                                   
left there.  Mr. Feeken explained  that the intent was not to                                                                   
limit  it to  five;  the Commission  needs  the authority  to                                                                   
regulate people  with a license  and those wanting  to obtain                                                                   
the license should not have a  felony record.  Representative                                                                   
Gara requested  leaving the  new language  as is, but  adding                                                                   
the inclusion of old language,  which provides the Commission                                                                   
discretion to take away the felons license.                                                                                     
                                                                                                                                
2:41:50 PM                                                                                                                    
                                                                                                                                
Representative Hawker addressed  Section 7 and questioned why                                                                   
the  principal office  must share  a physical  address.   Mr.                                                                   
Feeken explained that there was  a problem with a broker that                                                                   
owned  separate  businesses  at   separate  locations.    The                                                                   
intention was to make the licensure for a single business.                                                                      
                                                                                                                                
Representative   Hawker  suggested   that   there  could   be                                                                   
occasions  when successful businesses  could have  legitimate                                                                   
occasion to  have separate offices.   Mr. Feeken  replied, in                                                                   
one  Anchorage  case,  a  broker reported  to  be  under  the                                                                   
supervision  of  a  broker  in Denver.    He  voiced  support                                                                   
maintaining the language.                                                                                                       
                                                                                                                                
2:45:25 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault questioned how  many real estate agents had                                                                   
lost their licenses due to felonies in the last five years.                                                                     
Mr. Feeken  did not  respond,  but emphasized  that it  is an                                                                   
issue  of  moral  turpitude.    He  noted  that  the  current                                                                   
Commission  denies  licenses for  Driving  While  Intoxicated                                                                   
(DWI's).  The intent is to expand the net.                                                                                      
                                                                                                                                
In response  to a question  by Co-Chair Chenault,  Mr. Feeken                                                                   
observed that  the Commission  denied a  license to  a broker                                                                   
with a multiple DWI record.  Co-Chair  Chenault said he would                                                                   
be  concerned  if  a  license  were  denied  based  on  minor                                                                   
offenses.                                                                                                                       
                                                                                                                                
2:48:46 PM                                                                                                                    
                                                                                                                                
Representative  Hawker expressed  concern with the  broadness                                                                   
of the "moral turpitude" language,  since that is indefinable                                                                   
and  objective.  Representative  Gara  agreed  with  concerns                                                                   
regarding definable terms.                                                                                                      
                                                                                                                                
HB 205 was HELD in Committee for further consideration.                                                                         
                                                                                                                                
2:51:25 PM                                                                                                                    
HOUSE BILL NO. 147                                                                                                            
                                                                                                                                
     An Act relating to matching funds in state tourism                                                                         
     marketing contracts with trade associations.                                                                               
                                                                                                                                
CHARISSE   MILLETT,   STAFF,  REPRESENTATIVE   JOHN   HARRIS,                                                                   
explained that  the legislation changes the current  50/50 to                                                                   
90/10 match for tourism funding.   The Alaska Travel Industry                                                                   
Association (ATIA) does not believe  that they are able to do                                                                   
a good  job at  marketing the  State of  Alaska at the  50/50                                                                   
match.                                                                                                                          
                                                                                                                                
BRETT   CARLSON,   VICE   CHAIR,   ALASKA   TRAVEL   INDUSTRY                                                                   
ASSOCIATION  (ATIA), COLDFOOT,  spoke in  support of  HB 147,                                                                   
noting  that   it  is  a   "critical  must  have"   piece  of                                                                   
legislation to the future of the tourism industry.                                                                              
                                                                                                                                
Mr. Carlson  pointed out that Alaska's  destination marketing                                                                   
program  is facing  a 60% fund  cut unless  the bill  passes.                                                                   
The  focus of  HB  147 is  to  determine language  to  govern                                                                   
ATIA's  ability  to access  dollars,  changing  the level  at                                                                   
which the  private sector is required  to match dollars.   He                                                                   
provided chart handouts - Tourism  Marketing Industry Payment                                                                   
in Lieu of Taxes (Copy on File.)                                                                                                
                                                                                                                                
Mr.  Carlson noted  that  in 2001,  the  Millennium plan  was                                                                   
introduced, in  which the Alaska  tourism industry  faced two                                                                   
options:                                                                                                                        
                                                                                                                                
   ·    Tax themselves, trusting that future legislatures                                                                       
        would reinvest new travel industry tax dollars back                                                                     
        into destination marketing, or                                                                                          
   ·    Attempt to raise destination marketing funds through                                                                    
        voluntary payments in lieu of taxes, from cruise                                                                        
        ships.  That is what ATIA choose.                                                                                       
                                                                                                                                
2:57:46 PM                                                                                                                    
                                                                                                                                
Mr. Carlson  pointed that  during the years  of a  payment in                                                                   
lieu of  taxes scenario,  destination marketing  did survive,                                                                   
but did not thrive.  ATIA met  match through payments in lieu                                                                   
of taxes.  He recommended the need for change.                                                                                  
                                                                                                                                
In recent years,  legislators through the vehicle  rental tax                                                                   
and cruise taxes  made the tax versus the payment  in lieu of                                                                   
taxes decision.   Changes in the  tax landscape called  for a                                                                   
return to a more traditional destination funding model.                                                                         
                                                                                                                                
Mr. Carlson  informed members  that travelers come  to Alaska                                                                   
and leave  their money behind.   State and local  governments                                                                   
take a  portion and  reinvest it,  as does private  industry.                                                                   
He  maintained that  HB 147  returns the  legislation to  the                                                                   
norm.                                                                                                                           
                                                                                                                                
Mr. Carlson  continued, $2  million dollars  is the  level of                                                                   
non-cruise,  pay to  play dollars  that can  be generated  by                                                                   
ATIA.  The goal is $20 million,  $18 million, which hopefully                                                                   
will come from the State.                                                                                                       
                                                                                                                                
Mr. Carlson  stressed that if  the State only  contributes $8                                                                   
million, ATIA  would still contribute  $2 million.   There is                                                                   
incentive to  contribute the maximum  possible.   ATIA's goal                                                                   
is  to have  a match  that will  work  this year  and in  the                                                                   
future  without   additional   legislative  changes.     ATIA                                                                   
believes  that the  90/10 match  is  the answer  & will  help                                                                   
prepare Alaska for the future.                                                                                                  
                                                                                                                                
3:04:22 PM                                                                                                                    
                                                                                                                                
Representative  Gara questioned  the number  of ATIA  members                                                                   
that contribute.   Mr. Carlson estimated that  there is about                                                                   
1,000  contributing members.    Representative Gara  observed                                                                   
then  the average  would  then  be about  $2,000  each.   Mr.                                                                   
Carlson  indicated there  are large  and small  contributors.                                                                   
Representative Gara  asked the percentage of  businesses that                                                                   
pay a corporate  tax back to the State.  Mr.  Carlson did not                                                                   
know.                                                                                                                           
                                                                                                                                
3:06:14 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  inquired if  a bed  tax had been  considered,                                                                   
noting that Anchorage collects  a bed tax & then pays it into                                                                   
regional tourism.   Mr. Carlson  acknowledged that a  bed tax                                                                   
was a potential  option.  He noted that small  businesses are                                                                   
concerned   with  additional   taxes  being  reinvested;   he                                                                   
discussed  the vehicle  rental tax, which  initially  was not                                                                   
reinvested.                                                                                                                     
                                                                                                                                
3:08:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  advised that car  rental tax brings  in about                                                                   
$8 million dollars,  of which about $5 million  is reinvested                                                                   
into  tourism.    He  expressed   concern  that  the  tourism                                                                   
industry relies so heavily on  support from the General Fund.                                                                   
                                                                                                                                
STAN  STEPHENS, PRESIDENT,  STAN  STEPHENS WILDLIFE  CRUISES,                                                                   
VALDEZ,  spoke in  support  of HB  147.   He  noted that  the                                                                   
changes that  took place last  fall with the new  cruise ship                                                                   
tax initiative  changed the financial  structure of  the ATIA                                                                   
marketing program.   Two-thirds of the ATIM  Board represents                                                                   
small  businesses   in  Alaska  reflecting  the   make-up  of                                                                   
membership.     Also,   even  though   the  cruise   industry                                                                   
represents the  smaller number  of board members,  they still                                                                   
voluntarily contributed  60% of  State required match.   With                                                                   
the amount of  unknowns about the initiative,  ATIA's mission                                                                   
is to  find a  way to  save the marketing  program, hence  HB
147.                                                                                                                            
                                                                                                                                
Mr. Stephens  continued,  in FY07, the  total combined  funds                                                                   
from  the State  and private  contributions  was $l0  million                                                                   
dollars; $5 million  State matched by $5  million voluntarily                                                                   
contributed by the travel industry.   With the passage of the                                                                   
cruise  ship initiative,  the  cruise  industry  will now  be                                                                   
required to  pay millions  of dollars  directly to  the State                                                                   
and no  longer is likely to  pay a voluntary  contribution to                                                                   
Alaska's  travel  marketing  campaign targeted  at  the  non-                                                                   
cruise travelers.                                                                                                               
                                                                                                                                
3:13:36 PM                                                                                                                    
                                                                                                                                
Representative   Crawford  referred   to   the  Cruise   ship                                                                   
Initiative, questioning  what would occur if  the cruise ship                                                                   
industry  withheld their  contribution.    Mr. Stephens  said                                                                   
they would  have to wait  to see, emphasizing  the importance                                                                   
of marketing.                                                                                                                   
                                                                                                                                
3:14 :53 PM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  questioned if the cruise ship  industry would                                                                   
withhold  their support.   Mr. Stephens  emphasized  that all                                                                   
business must help in the generic marketing program.                                                                            
                                                                                                                                
3:16:29 PM                                                                                                                    
                                                                                                                                
In  response to  a question  by Co-Chair  Meyer, Mr.  Carlson                                                                   
noted that the  cruise ship industry has indicated  that they                                                                   
would not  contribute the previous  $2 million.   Mr. Carlson                                                                   
stressed that those  benefits do not spread  evenly into each                                                                   
area and that the independent  visitors must be reached.  The                                                                   
program  should be  by and  for  Alaskans, offering  vacation                                                                   
planning and allowing all visitors  to connect with the 3,000                                                                   
plus independent tourism businesses.                                                                                            
                                                                                                                                
3:18:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault inquired how  many tourism businesses exist                                                                   
statewide.   Mr.  Carlson estimated  that  there are  between                                                                   
2,500 to  3,000.   He explained that  some businesses  are so                                                                   
small  that  they  contribute  only to  their  local  tourism                                                                   
marketing effort.                                                                                                               
                                                                                                                                
Co-Chair Chenault commented on the tourism level in Kenai.                                                                      
                                                                                                                                
Mr.  Stephens noted  that ATIA  does represent  all the  very                                                                   
small business  statewide even though there are  not members.                                                                   
The  State  has   a  responsibility  to  help   all  business                                                                   
advertise.                                                                                                                      
                                                                                                                                
Co-Chair Meyer  commended the track taken,  while encouraging                                                                   
the   membership   to   participate  at   a   higher   level.                                                                   
Representative  Kelly noted something  must shift.   ATIA was                                                                   
funded at  a higher amount than  last year; he  was intrigued                                                                   
with the  percentage option,  but supported  the cruise  ship                                                                   
choice.                                                                                                                         
                                                                                                                                
3:26:33 PM                                                                                                                    
                                                                                                                                
Representative Hawker  observed that the issue  appears to be                                                                   
the passage  of the cruise  tax, which changed  the Industry.                                                                   
He  noted  the  number of  communications  from  the  general                                                                   
public and the tourism industry  was done deliberately and is                                                                   
off limit funds.   Understanding that, he commented  that the                                                                   
cruise industry will pass the  tax on to their customers.  He                                                                   
did not have sympathy for that  industry.  He emphasized that                                                                   
the concern is "big".                                                                                                           
                                                                                                                                
3:30:21 PM                                                                                                                    
                                                                                                                                
Vice  Chair   Stoltze  mentioned   the  vehicle   rental  tax                                                                   
relationship  to  the  visitor  industry  and  questioned  if                                                                   
"history was  being revised".   Mr. Carlson recalled  that it                                                                   
was  not  a  tax  that  the  visitor  industry  supported  or                                                                   
proposed.  The final bill did  hurt the independent traveler.                                                                   
There was language  added indicating that funds  raised would                                                                   
be  placed into  a separate  account  and could  be used  for                                                                   
marketing.                                                                                                                      
                                                                                                                                
Vice Chair  Stoltze asked if a  lower rate had  been proposed                                                                   
for recreational  vehicles.   Mr. Carlson  said yes,  lowered                                                                   
from 10% to 3% for recreational vehicles only.                                                                                  
                                                                                                                                
In response to a question by Vice  Chair Stoltze, Mr. Carlson                                                                   
commented  on the  long term  vision  for Alaska's  marketing                                                                   
program.   It  would  not be  bad  if the  independent  small                                                                   
business, in order  to meet their match, could  be completely                                                                   
cruise focused.   He wanted to  see that the State  of Alaska                                                                   
program become a generic program to help all travelers.                                                                         
                                                                                                                                
Vice Chair  Stoltze asked  about language  requiring  ATIA to                                                                   
come  in at  least  10%, if  that  allows the  Department  of                                                                   
Community  & Economic Development  the required  flexibility.                                                                   
Mr. Carlson determined that should be the minimum.                                                                              
                                                                                                                                
3:36:35 PM                                                                                                                    
                                                                                                                                
Representative Gara commented  that the legislation initially                                                                   
"rubbed  him  the  wrong  way"  when  anticipating  that  the                                                                   
Industry should  not get  the rental car  tax funds  back; he                                                                   
did  not  accept  that  tourism  related  dollars  should  be                                                                   
returned.                                                                                                                       
                                                                                                                                
3:41:42 PM                                                                                                                    
                                                                                                                                
Representative Gara commented  on his personal frustration on                                                                   
the  $15  million  dollar increase  request  to  the  tourism                                                                   
industry.   He thought that the  industry should be  taxed at                                                                   
the State level.   He asked the total amount  included in the                                                                   
operating  budget  for  tourism marketing.    Co-Chair  Meyer                                                                   
advised that the State was in  for $6 million dollars for the                                                                   
50/50 match  program and another  $3 million dollars  for the                                                                   
independent  travelers.   Representative  Kelly  pointed  out                                                                   
that the  difference comes from  the Senate's position.   The                                                                   
House Finance  Committee version proposed $6  million dollars                                                                   
plus  $720  thousand  for the  independent  marketing.    Mr.                                                                   
Carlson corrected, the Senate  has recommended $8 million and                                                                   
$1.5 million for the independent traveler portion.                                                                              
                                                                                                                                
Representative   Joule   was   surprised   by   the   various                                                                   
approaches.  He commented that  tourists are no longer coming                                                                   
to his  area.  He  hoped for an  arrangement with  the cruise                                                                   
industry to bring more visitors  in.  He pointed out that his                                                                   
district gets  about 1,000 tourists  a year now.  He  did not                                                                   
think that  the State's tourism  dollars would get  to people                                                                   
off the beaten track.  He commented  that it was important to                                                                   
invest in  Rural Alaska.   He appreciated  the effort  of the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Mr. Stephens concluded  that the tourism industry  puts about                                                                   
$20 million dollars  into the General Fund.   The Industry is                                                                   
between a  rock and hard  spot at this  time.  In  FY06, ATIA                                                                   
placed $1.5 billion  dollars into the State's  economy.  Many                                                                   
statewide  businesses  could   not  survive  without  tourism                                                                   
during  the  summer.    If the  future  holds  corporate  and                                                                   
gambling taxes,  then maybe there  could be funds  taken from                                                                   
those 1090's.                                                                                                                   
                                                                                                                                
At present  time, the gas  line is about  10 years away.   If                                                                   
not  for the  price  of oil,  Alaska would  be  hurting.   He                                                                   
thought that tourism was the answer  until the gas line comes                                                                   
on.  Alaska  has tourism potential and the  Legislature needs                                                                   
to help  find that potential.   He urged  a long  range plan,                                                                   
which includes funding tourism.                                                                                                 
                                                                                                                                
3:53:24 PM                                                                                                                    
                                                                                                                                
HB 147 was HELD in Committee for further consideration.                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:56 P.M.                                                                                          
                                                                                                                                

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