Legislature(1993 - 1994)
03/04/1993 05:00 PM House ITT
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON
INTERNATIONAL TRADE & TOURISM
March 4, 1993
5:00 p.m.
MEMBERS PRESENT
Representative Jeannette James, Chair
Representative Joe Green
Representative Jerry Sanders
Representative Cynthia Toohey
Representative Jim Nordlund
MEMBERS ABSENT
Representative Terry Martin
Representative Curt Menard
COMMITTEE CALENDAR
Presentations:
Glenn Olds, DNR Subcommittee on ITT
Alaska Visitors Association Presentation on Destination
Alaska and Cooperative Marketing
Department of Tourism
HJR 20 Urging modification of the North American Free
Trade Agreement.
HELD IN COMMITTEE FOR FURTHER CONSIDERATION
WITNESS REGISTER
Glenn Olds, Commissioner
Department of Natural Resources
400 Willoughby Avenue
Juneau, AK 99801-1724
(907) 465-2400
POSITION STATEMENT: Provided information on the DNR's
subcommittee on international trade and
tourism
Neil Johannsen, Director
Alaska State Parks
3601 C Street
Anchorage, AK 99510
(907) 762-2600
POSITION STATEMENT: Provided information regarding state
park lands
Karen Cowart, Executive Director
Alaska Visitors Association
3201 C. Street, Suite 403
Anchorage, AK 99503
POSITION STATEMENT: Provided information regarding the AVA
Connel Murray, Director
Division of Tourism
Department of Commerce and Economic Development
P.O. Box 110801
Juneau, AK 99811-0801
(907) 465-2012
POSITION STATEMENT: Provided information on the division's
responsibilities
Johne Binkley
Riverboat Discovery
PO Box 80447
Fairbanks, AK 99708
(907) 479-6006
POSITION STATEMENT: Provided information regarding the
Tourism and Marketing Council
Representative Kay Brown
State Capitol, Room 517
Alaska State Legislature
Juneau, AK 99801
(907) 465-4998
POSITION STATEMENT: Prime Sponsor of HJR 20
PREVIOUS ACTION
BILL: HJR 20
SHORT TITLE: AMEND N. AMERICAN FREE TRADE AGREEMENT
BILL VERSION:
SPONSOR(S): REPRESENTATIVE(S) BROWN
TITLE: Urging modification of the North American Free Trade
Agreement.
JRN-DATE JRN-PG ACTION
01/29/93 176 (H) READ THE FIRST TIME/REFERRAL(S)
01/29/93 176 (H) INTERNATIONAL TRADE & TOURISM,
RESOURCES
02/18/93 (H) ITT AT 05:00 PM CAPITOL 102
02/18/93 (H) MINUTE(ITT)
02/18/93 (H) MINUTE(TRA)
03/04/93 (H) ITT AT 05:00 PM CAPITOL 102
ACTION NARRATIVE
TAPE 93-3, SIDE A
Number 000
CHAIR JEANNETTE JAMES called the meeting of the Special
House Committee on International Trade and Tourism to order
on March 4, 1993, at 5:00 p.m.
Number 015
GLENN OLDS, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES
(DNR), addressed the committee regarding the DNR's
Subcommittee on International Trade and Tourism, stating
that tourism was now the largest and fastest-growing
industry in the world, and the earliest cash crop of the
third world, providing a remarkable cultural bridge. He
continued that in Alaska, tourism had increased five percent
annually, and Alaska's location was critical to both tourism
and international trade. He cited as an example the fact
that 85% of China's industrial economy was driven by soft
and very polluting coal; that Alaska had 60% of North
America's coal reserves and new technology to make coal non-
polluting and competitive with petroleum and, further,
Alaska could ship coal worldwide, year-round, via the
northern sea passage, providing an opportunity to address
and redress the United States' trade imbalance.
DR. OLDS reported Alaska shipped mostly raw resources and
could multiply the value of these resources at least three
times by value-added processing, explaining Alaska's own
gasoline costs $.60 more per gallon in Juneau, Alaska, than
in Washington D.C., because of the cost of shipping it out
of Alaska for processing and then back to Alaska for
distribution.
DR. OLDS stated tourism provided Alaska with 16,000 full-
time jobs and 38,000 part time jobs; was a $2 billion
industry; and was non-polluting, but critically needed
better access and infrastructure. He suggested developing
the St. Elias/Copper Valley area.
Number 339
REPRESENTATIVE CYNTHIA TOOHEY asked for clarification on the
amount of land in state parks in Alaska compared to other
states.
NEIL JOHANNSEN, DIRECTOR OF STATE PARKS, replied that Alaska
had one-third of the United States' state park acreage,
which was 3.3 million acres of the ten million acres of
state park land in America, that Alaska spent about $4.3
million a year to operate the state park system, and had 6.4
million visitors in 1992. He stated two-thirds of the
national park lands in the United States, or 54 million
acres, were in Alaska and had 1.4 million visitors, meaning
the state parks got four times the visitation of the
national parks in Alaska, but the operating budget for the
national parks in Alaska was $32 million. He added other
states had far less acreage in state parks than Alaska.
Number 389
DR. OLDS hoped to see an acceleration in opening access to
Russia and China.
Number 403
KAREN COWART, EXECUTIVE DIRECTOR OF THE ALASKA VISITORS
ASSOCIATION (AVA), reported that the AVA is the trade
association representing the tourism industry, was formed in
1950, and began a study, "Destination Alaska," two years ago
to document awareness of the importance of tourism in
Alaska. It showed that tourism in Alaska grew 20% between
1989 and 1992, provided over 19,000 jobs, $256 million in
wages, and impacted over 52,000 additional jobs.
Number 460
REPRESENTATIVE JOE GREEN asked about the possibility of
using federal funding.
Number 468
MS. COWART was unaware of any federal funding available for
cooperative marketing. Federal emergency marketing funds
had been provided after the Exxon oil spill for disaster
relief, but no other monies were available to her knowledge.
Number 489
REPRESENTATIVE GREEN asked why this had not been pursued.
Number 489
MS. COWART replied that, if such funds were available, many
other destinations would also be trying to get them. She
then discussed cooperative marketing, referring to the AVA's
Marketing Council, which had been successful for seventeen
years as an informal arrangement between the industry and
the state. However, legislation enacted in 1988 created the
Alaska Tourism Marketing Council as a legal entity
consisting of 21 members: 10 appointed by the governor, 10
appointed by the AVA, and one from the Division of Tourism
as Chair. She said the budget was determined yearly by
legislative appropriation plus private funds, with a 15%
match mandated by legislation in a contract with the
Department of Commerce and Economic Development (DCED).
MS. COWART explained that the Council raised their portion
of the match by selling ads in the Vacation Planner, which
varied from two-page spreads for $181,000 to small narrative
ads for $250, and by generating address labels for tourism
businesses. She added that employment of Alaskans was their
primary concern, with 84% Alaska hire, which is the highest
of any industry in Alaska, and one in three people in the
state were employed, or a family member was employed,
directly or secondarily, by a visitor industry business.
She mentioned that for many small Mom and Pop businesses
with a limited advertising budget, the Vacation Planner was
often the only possible access to such a wide advertising
market.
Number 620
CHAIR JAMES asked what additional tourist-related activities
in the state Ms. Coward had in mind.
Number 625
MS. COWART replied that previously the market was age 55+,
passive travelers content to ride through and look. The
current market was more active and education-oriented. She
cited Native Tourism as an example of an activity which
would satisfy this new market.
Number 638
CONNEL MURRAY, DIRECTOR, DIVISION OF TOURISM, DCED,
explained the difference between the responsibilities of the
Alaska Tourism Marketing Council (the Council), the AVA, and
the Division of Tourism, saying that the Council and the
Division of Tourism, both of which operated under the DCED,
were given the same broad responsibility, which was to
attract visitors to Alaska, and had arrived at an informal
division of responsibilities. The Council handled all
domestic tourism marketing for the United States and Canada,
and carried out research with a two-person staff. The
Division of Tourism's areas of responsibility were defined
by statute to include research, development of
infrastructure, new facilities, and attractions.
TAPE 93-3, SIDE B
Number 000
MR. MURRAY continued listing Division of Tourism
responsibilities, including coordination with other
agencies, providing Alaskan jobs, international promotion,
promotion of highway business, incorporation of communities'
goals, operation of the Visitor Information Center at Tok,
development of tourism matching grants, travel shows, trade
shows, and familiarization trips. He added that the state
provided an umbrella for small communities, marketing
groups, and convention and visitor's bureaus, to enable them
to participate in national and international marketing
efforts. This was also the purpose of reinstating the
Alaska Host Tourism Training Program, he said.
MR. MURRAY hoped responsibilities would soon be added to the
statute that would include maintaining the Alaskan film
office in Anchorage, developing new overseas markets, and
answering 130,000 inquiries per year. He said the question
was often asked, "Why should public funds be used to support
the visitor industry?" And replied the primary reason was
to create a healthy economy, adding that all fifty states
had state supported tourism programs. In answer to the
earlier question regarding federal funds, he said up to
$600,000 in matching funds was available for overseas
markets.
MR. MURRAY mentioned "in passing" that "LBA (the Legislative
Budget and Audit Committee) had recommended sunsetting the
Tourism Coordinating Committee in spite of the fact that
it....really cost nothing," to reduce boards and
commissions, and "we concurred with the Department in that
recommendation, for the primary reason that we are expecting
we are going to continue to operate that on an informal
basis and without some of the restrictions placed on us by
being an officially sanctioned state agency."
Number 355
CHAIR JAMES stated that about 600,000 people visited Denali
but only 200,000 were able to get into the park, and half of
those were disappointed that the highway system was
overburdened. She asked how this could be solved.
Number 365
MR. MURRAY answered that this was an attitudinal problem,
and another road was required, hopefully the Kantishna
access, and maybe also another road on the south side, which
would increase the visitation five- to eight-fold without
any adverse impact. An alternative would be to shift some
of the visitation to the Wrangell-St.Elias area on state
lands.
Number 392
REPRESENTATIVE TOOHEY asked who the Council answered to.
Number 394
MR. MURRAY replied, "the Commissioner of Commerce and
Economic Development," adding the AVA had a contract with
the DCED, renewable on an annual basis, and "the ATMC
reports to the Commissioner in the same way that I do."
Number 410
JOHNE BINKLEY added eleven of the twenty-one Council members
were appointed by the Commissioner or the Governor, giving
the Governor ultimate control.
HJR 20: AMEND N. AMERICAN FREE TRADE AGREEMENT
Number 439
CHAIR JAMES next turned the committee's attention to the
Committee Substitute for HJR 20 (CSHJR 20), stating that she
did not intend to move it out at this meeting but wanted to
hear testimony.
Number 446
REPRESENTATIVE KAY BROWN, PRIME SPONSOR of HJR 20, asked
that the overview paper be distributed, and said, "I
appreciate you taking this up. I think this is an important
state's rights issue. The North American Free Trade
Agreement, or NAFTA, was signed last year by the United
States, Canada, and Mexico, and it's going to have major
implications on the American states. Many of these
implications are uncertain right now. There are some things
we know that NAFTA is going to impose on the states. We
don't know, as this paper suggests, how all of those
ramifications will play themselves out, but there are some
examples that are troubling with respect to incursions into
what have traditionally been the rights of states in all
kinds of areas."
REPRESENTATIVE BROWN continued, "And that is the purpose of
my resolution, Madame Chair, to bring to the attention of
our new president and Congress as they grapple with how to
implement this free trade agreement, which the President has
said that he supports but will not implement without
additional protection for America, and he specifically
referred to worker protection and the environment. I wish
that Alaska, and other states as well, would bring to his
attention the fundamental changes that could occur if the
rights of states are not considered and expressly written
into these side agreements. It is my understanding that the
way this will work is that the free trade agreement itself
is not subject to amendment, so the changes that the
President has said he will seek will be either in side
legislation or in side agreements, so we are timely in
bringing up our concerns and asking that they be taken into
account."
Number 487
REPRESENTATIVE BROWN said, "One element to be aware of is
that whenever the President does submit the agreement to
congress, there was a previous law that set up this fast
track process, and so from the time it's submitted the whole
thing will be accrued to ninety days or Congress, I believe,
only has ninety days to consider it, and they can't make any
changes to it, so we need to express our opinion if we are
going to do that in a timely way. I am now referring to
page two of the Center for Policy Alternatives report; about
midway down there....is the most important issue....will the
basic constitutional powers of American states be subject to
international challenge under NAFTA?"
REPRESENTATIVE BROWN referred to pages five and six,
"sanitary and photosanitary standards" within NAFTA, which
determined how trade conditions would be considered, stating
this was aimed at getting uniform trade standards worldwide
and adding, "This is a good goal, but how much do we want to
sacrifice everything else to that one goal? I don't want to
see our country enter into an agreement without thinking
about what's going to happen to all things on the books in
the states....I learned about this last summer at a workshop
and then began trying to investigate what laws we had in
Alaska that might be or would be coming under this and
potentially subject to challenge, and we identified a number
where we now give subsidies to particular industries, fish
hatcheries or other things where we are putting the product
procurement code where we give a preference to people who
manufacture in Alaska. Somebody who didn't get that benefit
could challenge our law and say, 'This is a barrier to
trade, because you are giving someone an unfair advantage
over me.'"
Number 540
REPRESENTATIVE BROWN said, "I am concerned because I think
that many good things have come out of our federal state
system of the states having the ability to take on problems,
experiment with solutions, work on things, and to harmonize
everything to a standard that we don't know exactly what it
is and how it will affect us, I think is at least raising
the issue. This resolution (SJR 20) doesn't say we're
against free trade or against NAFTA; it says when you're
looking into these other concerns please consider the rights
of states. And one particular thing that is of concern is
the dispute resolution process. If someone should challenge
us, how would the state of Alaska defend a law that we had
on the books or wanted to preserve? Right now these
procedures in the dispute resolution process are
confidential and restricted only to federal officials being
able to attend, so it's not even clear how we would
participate when it was our law that was under attack."
REPRESENTATIVE BROWN said further, "That seems like one of
the major problems, and the states were not very involved,
or state participation was not present, during the
development of these. They did have some advisory bodies,
they had a lot of participation by various industries, but
some of the concerns peculiar to the states and particularly
the right to legislate and to try to give benefits to people
who live in our state, to try to encourage economic
development through incentives or things that are related to
our state, would be questionable if they went into effect
just like it is. But because we have this opportunity and
our president is looking at how he can make some
modifications through side agreements, I think there is a
good chance that some of these concerns could be addressed.
They are valid concerns, and we would like to see Congress
take it up."
Number 561
REPRESENTATIVE GREEN asked if this potential problem between
federal and state could also lead to arguments between
states.
Number 568
REPRESENTATIVE BROWN said she had not thought of this, but
it did seem possible. She mentioned the referral on page 4
to "GATT" which disallowed the favoring of local
distributors over foreign exporters, thus showing how states
could be brought into compliance by "the feds," adding that
this was not merely theoretical. She advised that when she
attended a workshop last summer, this whole agreement was
secret and no one even had a copy of it, but she now wanted
to call people's attention to it.
Number 611
REPRESENTATIVE JIM NORDLUND asked how CSHJR 20 differed from
HJR 20.
REPRESENTATIVE BROWN replied, "It (CSHJR 20) mostly fleshes
it (HJR 20) out....It's (CSHJR 20) a little more explicit."
Number 619
CHAIR JAMES read the attached letter from the Coalition of
Labor Union Women into the record, and requested each
committee member study the information regarding HJR 20.
ADJOURNMENT
CHAIR JAMES adjourned the meeting at 6:35.
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