03/23/2016 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HB254 | |
| HB177 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 247 | TELECONFERENCED | |
| *+ | HB 254 | TELECONFERENCED | |
| *+ | HB 177 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 23, 2016
1:07 p.m.
MEMBERS PRESENT
Representative Benjamin Nageak, Co-Chair
Representative David Talerico, Co-Chair
Representative Bob Herron
Representative Craig Johnson
Representative Kurt Olson
Representative Paul Seaton
Representative Andy Josephson
Representative Geran Tarr
Representative Mike Chenault (alternate)
MEMBERS ABSENT
Representative Mike Hawker, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 254
"An Act extending the termination date of the Big Game
Commercial Services Board; and providing for an effective date."
- MOVED HB 254 OUT OF COMMITTEE
HOUSE BILL NO. 177
"An Act relating to king salmon tags and king salmon tag
designs."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 254
SHORT TITLE: EXTEND BIG GAME COMMERCIAL SERVICES BOARD
SPONSOR(s): REPRESENTATIVE(s) STUTES
01/19/16 (H) READ THE FIRST TIME - REFERRALS
01/19/16 (H) RES, FIN
03/23/16 (H) RES AT 1:00 PM BARNES 124
BILL: HB 177
SHORT TITLE: KING SALMON TAGS AND DESIGNS
SPONSOR(s): REPRESENTATIVE(s) KELLER
04/01/15 (H) READ THE FIRST TIME - REFERRALS
04/01/15 (H) FSH, RES
01/26/16 (H) FSH AT 10:00 AM CAPITOL 120
01/26/16 (H) Moved HB 177 Out of Committee
01/26/16 (H) MINUTE (FSH)
01/27/16 (H) FSH RPT 2DP 3NR
01/27/16 (H) DP: FOSTER, MILLETT
01/27/16 (H) NR: HERRON, KREISS-TOMKINS, STUTES
01/27/16 (H) FIN REFERRAL ADDED AFTER RES
02/12/16 (H) RES AT 1:00 PM BARNES 124
02/12/16 (H) <Bill Hearing Canceled>
03/23/16 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE LOUISE STUTES
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 254 as prime sponsor.
STEVE HANDY, Staff
Representative Louise Stutes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 254 on behalf of
Representative Stutes, prime sponsor.
DICK ROHRER
Kodiak, Alaska
POSITION STATEMENT: During the hearing of HB 254, testified and
answered questions.
JANEY HOVENDEN, Director
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 254, testified
regarding fiscal notes.
THOR STACEY, Lobbyist
Alaska Professional Hunters Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 254.
JOE KLUTSCH
King Salmon, Alaska
POSITION STATEMENT: Testified in support of HB 254.
JASON BUNCH
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 254.
FRANK BISHOP
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 254.
PAUL CHERVENAK
Kodiak, Alaska
POSITION STATEMENT: Testified in support of HB 254.
KAREN POLLEY, Vice Chair
Big Game Commercial Services Board
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 254, explained the
workings of the Big Game Commercial Services Board.
FRED PARADY, Deputy Commissioner
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Offered DCCED's support for HB 254 and
provided audit information regarding the Big Game Commercial
Services Board.
MARK RICHARDS, Executive Director
Resident Hunters of Alaska
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition to HB 254.
EDDIE GRASSER, Lobbyist
Safari International
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 254.
ROD ARNO, Executive Director
Alaska Outdoor Council
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 254.
KRIS CURTIS, Legislative Auditor
Legislative Budget and Audit
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 254, testified
regarding the audit.
JIM POUND, Staff
Representative Wes Keller
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 177 on behalf of
Representative Keller, prime sponsor.
STEPHANIE WHEELER, Communications Officer
Alaska Railroad
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 177.
KEVIN BROOKS, Deputy Commissioner
Office of the Commissioner
Alaska Department of Fish & Game (ADF&G)
Juneau, Alaska
POSITION STATEMENT: Answered questions related to HB 177.
ACTION NARRATIVE
1:07:05 PM
CO-CHAIR DAVID TALERICO called the House Resources Standing
Committee meeting to order at 1:07 p.m. Representatives Olson,
Seaton, Josephson, Tarr, Nageak, and Talerico were present at
the call to order. Representatives Chenault (alternate),
Herron, and Johnson arrived as the meeting was in progress.
HB 254-EXTEND BIG GAME COMMERCIAL SERVICES BOARD
1:08:00 PM
CO-CHAIR TALERICO announced that the first order of business is
HOUSE BILL NO. 254, "An Act extending the termination date of
the Big Game Commercial Services Board; and providing for an
effective date."
1:08:17 PM
REPRESENTATIVE LOUISE STUTES, Alaska State Legislature,
introduced her staff member, Mr. Steve Handy, and advised that
he would walk the committee through the bill.
1:09:01 PM
STEVE HANDY, Staff, Representative Louise Stutes, Alaska State
Legislature, explained that HB 254 would extend the termination
date of the Big Game Commercial Services Board by three years,
from June 30, 2016 to June 30, 2019. The board is staffed by
the Division of Corporations, Business, and Professional
Licensing, and consists of two licensed and registered guide
outfitters, two licensed transporters, two private land owners,
two public members, and one member of the Board of Game. The
board provides a legislative command to assist in resource
conservation and consumer protection, it develops professional
and ethical standards, administers exams, makes final licensing
decisions, and takes civil action against persons who violate
regulations. He advised that the board members are appointed by
the governor, confirmed by the legislature, and its regulated
professions include: assistant guides, Class-A assistant
guides, master guide outfitters, registered guide outfitters,
retired guide outfitters, and transporters. According to the
report entitled, "Economic Impacts of Guided Hunting in Alaska,"
for the Alaska Professional Hunters Association prepared by the
McDowell Group, the 2012 research "Guided Hunting in Alaska"
accounted for a total of 2,210 jobs and $35 million in total
labor income, including all direct, indirect, and induced
impacts. Guided hunting generated a total of $78 million in
economic activity in Alaska in 2012, and guided hunters
purchased approximately $2 million in hunting licenses and game
tags. Due to an oversight by the legislature, the board was
allowed to sunset which caused catastrophic effects and the
sunset contributed to the financial difficulties reflected in
the legislative audit before the committee; however, in December
2015 the board was reinstated by the legislature. He related
that the Big Game Commercial Services Board is essential to the
safety of hunters, guides, and transporters coming to Alaska to
harvest its natural resources and for the management of the
resource itself. He asked that the committee pass HB 254, and
secure the Big Game Commercial Services Board.
1:12:01 PM
REPRESENTATIVE JOSEPHSON noted that the board was sunset for
approximately ten years, although he doubted the board wanted to
sunset, and inquired as to why the costs incurred while the
board was dissolved to do what would have been the board's
activities are now the board's problem.
REPRESENTATIVE STUTES deferred to Mr. Dick Rohrer.
DICK ROHRER replied that the easy answer is that the costs
associated with the guide industry licensing, with or without a
board, through the Department of Commerce, Community & Economic
Development (DCCED), become the responsibility of the licensees.
Not everyone believes that is exactly fair, he noted, but that
is his understanding of how it has worked in the past.
1:14:34 PM
JANEY HOVENDEN, Director, Division of Corporations, Business,
and Professional Licensing, Department of Commerce, Community &
Economic Development (DCCED), noted the fiscal note is $22,300,
which breaks down to costs to advertise for board meetings.
These costs are directly associated with administering the
board, which includes travel for face-to-face meetings, room
rental, and other fees associated with booking travel. Other
costs of the program would still be borne by the licensees that
are not associated directly with board meetings, she explained.
1:15:47 PM
REPRESENTATIVE TARR pointed to the presentation Ms. Hovenden
gave to the Senate Labor and Commerce Standing Committee, which
she described as more of an overview of the Division of
Corporations, Business and Professional Licensing and which
included program deficits. She asked whether it was included
within this particular presentation in order to give the
committee an overview of the division's current status and
challenges, because it appears fees will overcome the deficit
here in the near term.
MS. HOVENDEN responded that she used the Big Game Commercial
Services Board as an example of the [division's] new tool for
fee analysis. The tool projected out based on costs and
revenues received in the past, and how by adjusting the fees a
determination could be made as to how much revenue will come in
and whether it will not only cover term expenses but the carry
forward deficit. The tool projects out for three more
bienniums, she explained.
1:17:02 PM
REPRESENTATIVE TARR observed that by 2020 that deficit is
eliminated and from that point forward there would not be a
deficit associated with activities.
MS. HOVENDEN requested Representative Tarr repeat her question.
REPRESENTATIVE TARR pointed to the chart entitled, "Projected
Programs and Surplus," and asked whether it reflects the entire
division, or the Big Game Commercial Services Board. She said
that in the House Health, Education and Social Services Standing
Committee Ms. Hovenden sounded like the division is stressed
with the number of responsibilities and staff.
MS. HOVENDEN replied that the presentation in the House Health,
Education and Social Services Standing Committee was a picture
of the entire division and all of the different balances of all
of the different programs. In the event everything stays the
same, the division anticipates that all programs would be out
[of deficit] by 2020. The anticipation is that the Big Game
Commercial Services Board will be out of deficit by 2019 at the
latest if the division stays as aggressively on these fees as it
has put into place, she explained.
CO-CHAIR TALERICO opened public testimony on HB 254.
1:19:07 PM
THOR STACEY, Lobbyist, Alaska Professional Hunters Association,
stated that the Alaska Professional Hunters Association is in
strong, unanimous support of HB 254 because the Big Game
Commercial Services Board is an essential institution for the
industry. The Alaska Professional Hunters Association
represents hunting guides in Alaska, it is the only professional
association representing hunting guides and, he pointed out, the
general public owns the wildlife resources. He put forth that
the general public decided that hunting guides should be
licensed. Having a board to assist and operate as an
intermediary between the division, the general public, and the
industry as a whole, is essential. He advised that he works
with the association at board and legislative meetings on
hunting guide issues.
REPRESENTATIVE TARR pointed to the potential licensing fee
increases and asked whether there was no opposition because
folks understand the need to keep up with the overall costs for
the programs.
MR. STACEY related that it would be irresponsible of him to say
there is no opposition, but he could say that the industry as a
whole and the Alaska Professional Hunters Association recognizes
the responsibility they have in this relationship and are
willing to pull their own weight.
1:21:30 PM
JOE KLUTSCH testified in support of HB 254. He related that he
has lived in King Salmon for over 45 years, worked in commercial
fishing, sport fishing, and guiding, and is deeply involved in
this process. This [board] serves a vital public function in
protecting the resources and, he pointed out, statutes drive
regulations and regulations are what it takes to enforce
activities in the field. The board provides the vehicle for
designing proper regulations and taking disciplinary actions
when necessary. He offered that there is some resistance to the
fee increases because many guides are unaware of the
investigative costs incurred by the Department of Commerce,
Community & Economic Development with the resultant doubling
general license fees and the additional fees related to hunt
records. However, he continued, the people who care about the
profession and the conservation dimension in this are willing to
foot the bill because the board is a vital instrument for the
future of good game management and all members of the public,
not just the guiding industry.
1:24:29 PM
JASON BUNCH said he supports HB 254 because the Big Game
Commercial Services Board enhances Alaska's guide industry with
consistent regulation of licenses and helps to provide educated
professionals representing Alaska. In addition, he related,
when the board convenes it becomes an invaluable opportunity for
the division, agency personnel, and licensees to meet and
discuss real time concerns. Regarding the budget, he said he
supports the most recent increase of fees and looks to those
changes to result in a balanced budget.
1:25:15 PM
FRANK BISHOP offered his support for HB 254, and advised he is a
master guide and has been a guide for over 30 years in Kodiak.
He said he agrees with the previous testifiers in that the Big
Game Commercial Services Board is a vital asset to the guide
industry and it is not something to take lightly, and few guides
do. He asked that the committee to let the bill move forward.
1:26:14 PM
PAUL CHERVENAK stated he fully supports HB 254, and that he is a
25 year Alaska master guide. He pointed out that the guides are
some of the best stewards of the resource, they know the
industry and give a lot of their time, and believe in helping
develop standards to manage the industry and make it one of the
most professional around. The Big Game Commercial Services
Board enables this, he remarked.
1:27:01 PM
MR. ROHRER testified that he has lived in Kodiak approximately
46 years. He urged the committee to support and pass HB 254 out
of committee today. He said he was a board member when the
board was reinstated in 2005, and during that time he paid close
attention to the budget. During the time periods 2005-2007 the
budget looked good, but under Governor Sean Parnell's
administration there was a new more professional look at the
budget. Suddenly $100,000 of revenue disappeared, he continued,
but he does not know where the money went. That was in the past
and now the industry has a good professional handle on the
budget, budget reporting, and understands its status. It is
anticipated the board will be out of its deficit position within
the next three years before it comes up for sunset again.
1:29:06 PM
KAREN POLLEY, Vice Chair, Big Game Commercial Services Board,
related she has been the Vice Chair and Public Representative of
the Big Game Commercial Services Board for approximately five
years. She said the guides are concerned about the continuation
of that resource which is a public resource, and the board
strives to be offer the guides and people an educational
opportunity each time they attend the meetings. The guides and
transporters participate in committee meetings that help develop
the regulations that govern their actions. The board staff is
paid by the Department of Commerce, Community & Economic
Development. The board has many cases, including approximately
49 people on probation; the board recently closed 51 cases,
which are primarily by consent agendas - people who agree there
was a violation and are willing to accept the results of that
violation; plus there are open cases. The budget has been a
concern and she followed Mr. Rohrer in the process of studying
the budget to understand how the indirect costs and direct costs
for operations were impacting the board and the deficit. She
related that the board has been aware it needed to raise fees
and as a result of the audit the board is doubling fees to close
the deficit and move forward, which will cost the people who use
the resource. The board itself is made up of a variety of
people representing different organizations, and she expressed
that she is proud to be a public member of that organization.
1:31:44 PM
REPRESENTATIVE TARR advised there is another piece of
legislation related to restitution and asked Ms. Polley to
generally comment on what the type of open cases the board has,
and whether there are trends in the cases.
MS. POLLEY replied that there are a variety of violations, a
significant number being sub-legal animals and paperwork
violations. The board tries to handle the disciplinary actions
according to the intensity and impact of what is happening, such
that sub-legal animals directly affect the resource, and with
paperwork violations the board tends to ask the violator to not
do it again, to have an understanding of their responsibilities,
and that they handle the paperwork obligations. When the board
actually removes licenses, they are often criminal cases that
have been prosecuted and the board performs the final action of
removing the license.
1:33:35 PM
FRED PARADY, Deputy Commissioner, Department of Commerce,
Community & Economic Development (DCCED), explained that in his
role as deputy commissioner he supervises the Division of
Corporations, Business, and Professional Licensing. He said the
department supports the extension of the sunset included in HB
254 and appreciates the quality of the 2015 audit by Legislative
Budget and Audit. He paraphrased from the conclusion section of
the audit, which states:
Overall, the audit concludes the board has provided
reasonable assurance that individuals licensed to
guide and/or outfit hunts, as well as transport
hunters to and from hunt locations, in Alaska are
qualified to do so. Additionally, the board's
regulation and licensing of qualified guides, guide-
outfitters and transporter benefited the public's
safety and safeguarded the state's wildlife resources.
In recognition that the board reported an operating
deficit of over $1 million as of April 30, 2015, we
recommend extending the board only three years under
the condition that the board demonstrate the ability
to address its deficit during the legislative sunset
review process. The board believes proposed
regulations that increase licensing fees and create
new record processing fees will address its deficit by
the end of FY17. If the board fails to demonstrate
the ability to address its operating deficit, we
recommend it be considered for termination.
1:34:51 PM
MR. PARADY turned to the four recommendations. He noted that
the first recommendation concerned public notice. Those
policies have now been rewritten and those activities have been
consolidated to a single person to ensure the division's
accountability to notify the public.
MR. PARADY said the second recommendation concerned
investigations. Chief Angela Birt has been the division's lead
investigator since 2014 and tightened the division's
accountability in the investigation processes. Chief Birt,
after identifying the length of time a file might sit,
instituted a tickler system to give notice to the investigators
they have a gap, which is often due to a file being referred to
the Alaska State Troopers or somewhere else and the division is
awaiting action. The division then made the gap period a core
element in its performance evaluation of it investigators, and
also included it in the quarterly meetings where case files are
reviewed to be certain the division is keeping up.
MR. PARADY turned to the third recommendation of the audit
regarding fees and advised that fees have been substantially
increased. At the close of fiscal year, June 30, 2015, there
was a $1.1 million deficit. In December, mid-year of fiscal
year 2016, that deficit is just under $900,000, so the
profession has closed the deficit by $235,000. He explained
that these licenses are on a two year renewal cycle, and the
division is anticipating closing the gap by $535,000 in this two
year cycle, and the other $535,000 in the next two year cycle,
thereby erasing the deficit by the close of FY 2019. He related
that it is worth noting that the board is operating in the black
today. That deficit grew because it was not being closed and
all the while it was being added to because of being in the red.
By operating in the black the division is reducing the deficit
and the board is to be commended for its action in that area.
MR. PARADY said the fourth recommendation concerned transporter
licensing and updating the form which is now complete. In
closing, he stated the board is necessary to guide the
profession and division in the regulation of the profession.
Whether the board is in existence or not, the licensing
requirements are still on the books and are required. He
stressed that this is a complex specialized area and the
division appreciates the board's services to the profession,
division, and citizens of Alaska.
1:37:50 PM
MARK RICHARDS, Executive Director, Resident Hunters of Alaska,
stated that his organization opposes HB 254 and believes the Big
Game Commercial Services Board should be sunset. He said his
organization is concerned with issues that affect resident
hunters. He said the Big Game Commercial Services Board was
originally the guide board intended to regulate guides, it was
never intended to regulate private landowners, small business,
or resident hunters. At the last Big Game Commercial Services
Board meeting he said he testified to federal aviation case law
and that the entire transporter system is unconstitutional.
Subsequently, the board reviewed the case law and voted to send
a review to the Department of Law. That review has not started
yet, but if case law is correct that would throw the entire
transporter system out the window. In an effort to relieve some
of the board's debt, without public notice and without a quorum
it added a $50 fee to every air taxi that had chosen to be a
transporter - for every mandated hunt activity report turned in
the transporters then received a retroactive notice that they
owed this fee. He remarked that many transporters testified
that they will no longer be a transporter if they have to have
the fee, they will add it on to their charters and charge
residents for this fee. Resident Hunters of Alaska believes
that many transporters will get out and then those fees will not
be involved. Guides have tried to regulate hunters such that if
a person owned a cabin on a lagoon in Kodiak and rented out
skiffs, the board passed regulations where that person had to be
a big game guide outfitter in order to rent those skiffs or rent
tents, he said. The board decided that this person could not do
that if "quote, in the field, unquote"; the person would have to
go to the nearest airport in Kodiak to be able to rent that
skiff out. He opined that this board should stick to regulating
guides, not do things that affect resident hunters. He posited
that the debt will never be paid off because the transporter
issue will go out the window and the $50 fee will disappear.
1:40:47 PM
EDDIE GRASSER, Lobbyist, Safari International, advised that for
the most part he is representing Safari International, and
testified in support of HB 254. He explained that Safari
International has over 3,000 members in Alaska, plus worldwide
membership. He opined that in order to have safe reputable
hunting opportunities for people choosing to hire a guide, there
must be an avenue to ensure those people are professionally
vetted. Mr. Grasser said he has been involved in hunting for
over 60 years, with 35 years as a professional, although he has
not guided since 2001. He remarked that he is a resident hunter
who believes that a well regulated industry is beneficial to
resident hunters. Mr. Grasser said he has hunted in areas of
the state where transporters were dumping so many people in the
field that it was like a zoo, and there should be some mechanism
for regulating or ascertaining that there are professional
levels within that industry. He commented that this is an
industry where many things are at stake, including potential
risk of life and limb by being out there in the elements and
many times away from being rescued if something goes wrong. He
asked the committee whether it prefers an unregulated industry
with dangerous aspects to it, or a board regulating professional
standards. Pointing to the Board of Barbers & Hairdressers, he
noted that no life or limb is in jeopardy in those professions.
1:43:07 PM
ROD ARNO, Executive Director, Alaska Outdoor Council, offered
the Alaska Outdoor Council's (AOC) support for HB 254 and
extension of the termination of the Big Game Commercial Services
Board. He said AOC supported the board during its original
creation and creation after the sunset. Federal land managers
are putting more pressure on the guiding industry on federal
lands and it is causing more conflict on the available state
lands for all Alaska residents to hunt as well as having a
regulated industry. He [disagreed] with the idea of terminating
this board which has been trying to come to grips with
regulating the guide, air taxi, and charter industry. He
reiterated that the federal land managers are trying to exclude
the use of the industry as well as personal use and it will only
be compounded in the future.
1:45:00 PM
KRIS CURTIS, Legislative Auditor, Legislative Budget and Audit,
Alaska State Legislature, advised that Legislative Budget and
Audit performed the sunset audit and reviewed whether the board
was serving the public's interest and whether it should be
extended. It was found that the board was serving the public's
interest and therefore a conditional extension was recommended.
It was conditional upon the board demonstrating during this
legislative review process that it had the capacity and ability
to address its $1 million deficit. At the point of the audit
last August, there were proposed regulations to institute new
fees, and specifically new fees on hunt records and activity
reports, which is a new type of fee for the board. Because the
fees were proposed, her office had no assurance at the time that
they would be adopted, so her office made this conditional
recommendation because she envisioned that those regulations may
be adopted by this point. She noted she has not yet heard
testimony to that effect and a good question to ask would be
whether those fees are officially in place. Her office reviewed
the proposed fees last summer, did some number crunching, and
concluded t it was reasonable that if the fees were instituted
they would address the deficit within the next few years.
Because Mr. Parady addressed the four recommendations, she said
she would not go into detail unless there were questions.
1:46:47 PM
REPRESENTATIVE TARR referred to the recommendation to improve
the timeliness of investigations and asked for Ms. Curtis's
thoughts on that component because it had been mentioned as
something making it more costly.
MS. CURTIS replied that handling the cost of investigations is a
problem for all of the boards because it is hard to budget
prospectively on how much those investigations will cost and to
incorporate those costs as far as the fees. It creates highs
and lows, and the occupations have a hard time understanding
when those fee increases happen, she explained, and this board
is no different as it does have a high case load. Her office
tested 25 cases and found that 17 of the 25 had periods of
inactivity, ranging from five months to five years, which were
extensive and resulted in the recommendation. During the 2011
audit, her office noted there were numerous problems with the
investigative process, and this time around they found
improvements and only identified timeliness as an issue for
correction, she remarked.
1:48:08 PM
REPRESENTATIVE SEATON asked whether the transporter issue was
reviewed as part of the audit.
MS. CURTIS asked Representative Seaton to zero in on the
transporter issue.
REPRESENTATIVE SEATON referred to previous testimony wherein the
transporter fees were enacted at a board meeting without a
quorum and public notice, and he noted that the testifier had
statutory questions. He asked whether that issue was part of
the audit.
MS. CURTIS answered that the fees would have been part of
regulation changes and she would expect those to go through the
standard process, and her office has had no problem in looking
at any changes the board made during the audit period. The
board complied with the regulatory public notices and comments,
but those fee changes would have happened after the audit period
so she said she couldn't address those specifically.
1:49:20 PM
CO-CHAIR TALERICO requested Mr. Parady to comment with regard to
the fees.
MR. PARADY stated the fees were properly noticed and were
adopted after completion of the audit by Ms. Curtis's office.
So, they were adopted this fall and are in place for this
renewal cycle. Given the transporter fee is new and as it
settles in and people become adapted to it, it may be necessary
to come back before the board and consider further regulatory
change to address the concerns expressed earlier; those kind of
concerns happen with anything that is new. He then echoed an
earlier testifier that it is a well regulated industry that
serves resident hunters as well as non-resident hunters. Mr.
Parady noted that the proposed conditional extension of three
years instead of five puts it on the path to erasing the deficit
and also provides the opportunity for legislative oversight in
moving forward. He reiterated that the regulations were adopted
and pointed out that this industry provides 2,000 jobs and is a
vital part of the tourism sector of Alaska's economy, which is
one of the brighter spots in the dismal news that the
legislature is currently coping with.
CO-CHAIR TALERICO closed public testimony after ascertaining
that no one else wished to testify.
1:51:44 PM
REPRESENTATIVE JOSEPHSON referred to the entire board process
and related that he was struck by a system that requires boards
and commissions to self-finance. Although, this process is good
in the abstract, except when there is a small membership and a
"bad apple," then the fees spike and the others have to pay for
that investigation and litigation. In addition, he said he
identified a number of times in the legislative budget and audit
process where there was a greater public interest served by a
good investigation without making fees escalate in some unfair
manner. In other words, this is a comment for the committee
members and he opined that there are many governmental things
the government doesn't recoup, and for some reason with boards
and commissions the legislature deems they must fund all of
their activities, and these people are volunteering their time.
He acknowledged that this is not the right year to have a fund
cover overages but he has seen this happen repeatedly and it
appears illogical at some level. He added that this was his
first lesson in learning how departments jealously guard their
time. He related the phenomenon wherein a member of the board
calls the department, the department notes the call lasted ten
minutes and then, because "clerk one" responded to the question,
the department bills the board for its time. Even though it
gives the legislature a good accounting mechanism to determine
who is costing what, he said his question is that this is the
State of Alaska and isn't everyone in this together.
1:54:20 PM
REPRESENTATIVE TARR thanked the witnesses who supported the fees
and their willingness to pay an increased fee to help support
the board's activities. She said she admires those people and
groups for standing up and helping the legislature find
solutions. This is important to tourism and good management,
she said, and she appreciates people's willingness to help out.
1:54:53 PM
REPRESENTATIVE HERRON noted that he hunts within his home region
and not in other states, and remembers the days when Alaska did
not have the oversight and how it became a rather wild place
with people coming into the state. He opined that not only for
big game outfitters and transporters, there has to be a
legitimate and strong oversight because it's too easy to do too
many things. He reminded the committee that recently there have
been high profile news articles about how people have taken
advantage of Alaska. The financial fees are going to be
addressed, this is an oversight process that is important to
Alaska, and he supports the legislation, he said.
1:56:16 PM
CO-CHAIR NAGEAK moved to report HB 254 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 254 was reported from the House
Resources Standing Committee.
1:56:39 PM
The committee took an at-ease from 1:56 p.m. to 2:02 p.m.
HB 177-KING SALMON TAGS AND DESIGNS
2:02:09 PM
CO-CHAIR TALERICO announced that the final order of business is
HOUSE BILL NO. 177, "An Act relating to king salmon tags and
king salmon tag designs."
2:02:21 PM
JIM POUND, Staff, Representative Wes Keller, Alaska State
Legislature, described HB 177 as a small step in looking at
Alaska's economy, in particular fishing. The legislature is
looking for increased funding and this bill would provide an
opportunity to help fish enhancement, an area some people may
eventually start looking at to make cuts to. The bill deals
with the Alaska King Salmon stamps, which are already in
existence, and it would convert today's stamp into an artist's
rendition as a way for artists and collectors to start
maintaining and keeping them in their collections. In addition
to the stamps, he advised, posters and prints are envisioned for
sale and the selling of these items could be handled through the
Alaska Department of Fish & Game (ADF&G), local art stores, and
charter boat captains, the same way as they sell the stamps. He
said that the artist's intellectual property rights would be two
years for the original art, the original art would then go back
to the artist and he/she could sell that art in addition to
whatever the artist was paid by the state. There would be
potential for increasing some funds for fish enhancement in the
state, he noted.
2:04:20 PM
REPRESENTATIVE SEATON requested further information with regard
to the artist being paid by the state.
MR. POUND replied that it would be a contractual agreement,
similar to the Alaska Railroad, almost like going out to bid.
He deferred to Stephanie Wheeler who she handles the Alaska
Railroad, but added that there would be a payment from the state
for the rights to the art.
2:05:02 PM
STEPHANIE WHEELER, Communications Officer, Alaska Railroad,
explained that the Alaska Railroad has an annual art program
whereby it solicits artists, Alaskan artists in particular, to
submit sketches for a piece of artwork featuring the railroad.
Based upon those sketches the Alaska Railroad personnel selects
an artist and that artist is paid $3,000 to provide the artwork.
The Alaska Railroad does retain ownership of the artwork which
is used to create merchandise in addition to posters and prints
and a matching lapel pin. The costs include paying the artist
and printing costs of approximately $10,000. After advertising,
production costs, and artist payment, about $15,000-$20,000 goes
into it each year. The railroad does recoup most of that cost
in the sale of prints, posters, and merchandise through its gift
shop, she said.
REPRESENTATIVE SEATON referred the statement that the railroad
recoups "most" of the cost and asked whether it is a net loss.
MS. WHEELER answered it is not a money maker as it is more of a
public relations benefit and the railroad basically breaks even.
2:07:17 PM
REPRESENTATIVE TARR asked whether the Alaska Railroad has ever
considered doing this as a contest rather than a financial
relationship.
MS. WHEELER replied that artists are typically not wealthy
individuals and therefore paying them some type of stipend for
their artwork seemed to be the right thing to do. The railroad
also gives the artist a few prints and posters for the artist's
use, but the Alaska Railroad owns the artwork so the only value
the artist receives is the $3,000, including the prestige in
creating the Alaska Railroad's annual artwork. She described it
as a show piece that people collect and noted that the Alaska
Railroad's artwork is seen in offices around the state and in
the Lower 48. There is the value of being recognized as an
annual art winner, there is a contest element to it, and the
Alaska Railroad has been at $3,000 for over a decade so it's a
pretty low payment, she related.
REPRESENTATIVE TARR referred to the fiscal note and anticipated
the prints would be sold at $100 each. She asked if amount is
comparable to the price the railroad charges per print.
MS. WHEELER reported that the Alaska Railroad makes 750 prints,
which are signed and numbered, and has sold the prints for $50-
$55 for the last ten years. Posters are typically printed on
smaller less expensive paper and are sold for $25-$30, which
captures a different market such as children. The matching pins
are $5, and merchandise such as mugs and ornaments are sold by
the gift shop for $10-$20.
2:10:20 PM
REPRESENTATIVE SEATON asked whether it would make any difference
in the way the Alaska Railroad conducts its business if it
didn't retain ownership of the artwork and the licensing
agreement did not exceed two years.
MS. WHEELER answered that the Alaska Railroad retains ownership
of the artwork so that it can create merchandise well into the
future. She reiterated that the artist receives $3,000 in
compensation and the Alaska Railroad keeps the artwork. The
railroad does not license the artwork for two years like what is
being proposed under HB 177.
REPRESENTATIVE SEATON questioned that if the Alaska Railroad
were to agree to a license not to exceed two years, whether that
would make a difference in its potential revenue stream.
MS. WHEELER replied that the Alaska Railroad has found value in
the manner in which it has been doing things because it does
have gift shops. The railroad is free to use that artwork in
other ways from year to year, as opposed to going back to the
artist and paying more if it wants to use the artwork. She said
she is unsure whether it would make a difference but suspects
that the railroad came to do it in this manner because this way
has the most benefit to the Alaska Railroad.
REPRESENTATIVE SEATON noted he is trying to balance the version
[proposed by HB 177].
2:13:05 PM
REPRESENTATIVE HERRON asked why the state wouldn't want to keep
the art design such that in the future the fish and game fund
could have anniversary prints and collections.
MR. POUND replied he went with two years because he estimated
that was the shelf life for prints and posters and, after
speaking with local artists they are used to that type of
timeframe. He opined that it was a way that the actual bid
could be much lower than $3,000, initially.
REPRESENTATIVE HERRON asked why the state would want to let go
of property that could be valuable in a few years for
collections. He asked whether the state wants to create an
archive that could be valuable years in the future.
MR. POUND answered he is not married to the two-year clause.
2:15:09 PM
REPRESENTATIVE CHENAULT asked whether the discussion is about an
actual salmon stamp or a postage stamp.
MR. POUND responded that it is a stamp attached to the fishing
license.
REPRESENTATIVE CHENAULT noted it does say U.S. postage stamp.
MR. POUND explained that it was an example of what the stamp
might look like without the U.S. postal reference to it as it
may read the State of Alaska King Fishing Stamp.
REPRESENTATIVE CHENAULT noted he likes the first example, but
cannot see where the other two examples have anything to do with
salmon. He then addressed the fiscal note and asked whether
there is an estimate as to what the income might be.
MR. POUND replied he does not have an estimate but posited it
would be higher than that of the Alaska Railroad primarily
because there are tourists from the tour ships getting on the
charter boats, as well as tourists fishing on the Kenai River
with charter boats with an opportunity to sell the posters.
Unlike the Alaska Railroad, the state would not be confined to a
gift shop.
2:17:03 PM
REPRESENTATIVE TARR observed from the fiscal note that it is a
breakeven proposition and surmised that the state would have to
sell at least 500 prints to get to the cost. She offered
concern as to whether that number would be sold and surmised the
railroad has other smaller items in addition to the prints. She
asked whether that would be an option and whether the
legislature needs to specifically give that option. In the
event there is a good design but it is not necessarily selling
many prints, she said she would want the ability to make it into
something such as a greeting card or magnet or other gifts to be
certain it is not a money loser.
MR. POUND agreed and said it is something that is negotiated
between the artist and the department. Once the department owns
the art, he explained, it can do with it as it pleases for the
next two years, as the bill is currently written.
REPRESENTATIVE CHENAULT observed the costs for services in the
fiscal note would include a contract with an artist receiving
between [$2,500 and $5,000] per year, and surmised that that is
a guess by not having the program in place and not knowing the
actual costs. He pointed out that that is more than the $3,000
the Alaska Railroad usually pays its artists.
2:19:22 PM
REPRESENTATIVE JOHNSON asked whether the discussion is the
actual stamp that goes on the back of a license.
MR. POUND answered correct.
REPRESENTATIVE JOHNSON surmised it is similar to a duck stamp.
MR. POUND agreed.
REPRESENTATIVE JOHNSON opined that "the federal wildlife" makes
more by selling duck stamps as posters and where the actual
stamp is below the poster itself. "They make more money off of
that," he said, "than they do off the actual people hunting."
MR. POUND agreed that that potential is there and people who
will never come to Alaska will actually purchase the posters in
an online scenario.
REPRESENTATIVE JOHNSON expressed his concern for the two year
limit because if the department does not own the art work it
will miss out because down the road the artwork will become more
valuable and can be reprinted in the form of a poster. In the
event the department buys the artwork it should own the rights
to it, although, the artist can retain certain rights but he
would hate to see the department pay for it and have someone go
out and create these posters, buy the stamps, and the big money
is on the backend. He said he would like the department to own
the artwork, have a contest like with the duck stamp, the winner
receives $3,000, and the department owns it in perpetuity.
MR. POUND said he has no objection to that amendment coming
forth.
2:21:41 PM
REPRESENTATIVE TARR referred to HB 177, page 1, lines 6-8, which
read: "The department shall make stamps available for the
creation of king salmon limited edition prints and provide for
the sale of stamps and prints to the public." She suggested
that the language limits the opportunity to only a print and
inquired as to whether it might be appropriate to read "or other
products" or something similar that would provide flexibility.
For example, she pointed out that Director Ben Ellis, Division
of Parks and Outdoor Recreation, advised there is a strong
interest in T-shirts, hats, and sweatshirts with the state park
emblem, which is a popular design.
MR. POUND replied that his goal on this legislation is to come
up with funds for fish enhancement and he appreciates that this
is a commercial type enterprise making money.
2:23:12 PM
REPRESENTATIVE SEATON referred to HB 177, page 1, lines 14-15,
"A contract under this subsection is governed by AS 36.30 (State
Procurement Code)," and asked whether there is anything in the
State Procurement Code on art that will make it a difficult
process.
MR. POUND replied he doesn't believe there is, but that he
hadn't considered that aspect of the State Procurement Code.
2:24:18 PM
KEVIN BROOKS, Deputy Commissioner, Office of the Commissioner,
Alaska Department of Fish & Game (ADF&G), referred to the fiscal
note and clarified that the number for a contract is $2,500-
$5,000, a range that would encompass $3,000.
REPRESENTATIVE CHENAULT responded that if he said a larger
amount, he certainly didn't mean it.
2:25:02 PM
MR. BROOKS advised that the department based the fiscal note on
the assumption of selling 500 prints and 1,000 posters. The
department expects there would be some standup costs given it
employs biologists and does not have a marketing department.
The fiscal note reflects it would be a general fund cost with
the program subsequently generating revenue that would pay for
itself. He noted that the department ran a duck stamp program
from the mid-1980s to 2009, when it was discontinued for lack of
a market. This program used to be a real big deal, but over
time that market dried up and there are only a handful of
printing firms that will take on this type of thing. The
expectation would be that a new program would probably see a
surge of sales in the event it could be marketed. He recalled
for the duck stamp program in 1985 there was a big build up with
a lot of advertising. All 50 states were doing it, with a lot
of sales early on, but in the last years of it there was $5,000-
$10,000 in sales on the various items. The department
appreciates the intent and effort because it has been cutting
its budget with programs going away, and anything that could
generate revenue the department is certainly open to. However,
he said, the department is not as optimistic about the level of
revenue that might be generated from the program on a sustained
basis going into the future.
2:27:08 PM
REPRESENTATIVE SEATON reminded the committee that he had asked
about the State Procurement Code. He referred to page 2, lines
1-2, "All costs incurred under this section may be paid from the
fish and game fund." He said he wants to be sure that is an
allowable use of the fund.
MR. BROOKS responded that the state procurement is typically
when the department is buying something and it provides for
competition wherein the department would put a bid out and
accept those bids. He said he doesn't see anything that would
restrict the department's ability to do that by reference of the
State Procurement Code in Title 36.30.
REPRESENTATIVE SEATON noted his understanding of the bidding
procedure wherein people bid for the amount of money they want
to sell something to the state. In this case, essentially, the
department will say the winner would receive $3,000 or $5,000,
and then the department would choose from among the applicants
based on an artist's selection or the commissioner's selection.
He asked whether that is the way it would work.
MR. BROOKS answered he envisions it to be something along those
lines.
REPRESENTATIVE SEATON, regarding that the costs incurred under
this section may be paid from the fish and game fund, asked
whether that is an allowable use of the fund.
MR. BROOKS replied that typically the department uses the fish
and game fund to benefit sport anglers. The department matches
Dingell-Johnson Sport Fish Restoration funding, which has its
own requirements and has to benefit the resources and provide
opportunity. There is a relationship there, but if the
legislature appropriated it for that purpose he thinks it could
legally be done. But, he continued, the department does not
currently have an art program using fish and game funds.
2:29:23 PM
REPRESENTATIVE TARR referred to page 1, lines 11-12, which read:
"The department may only consider designs submitted by state
residents," and asked whether there are issues with limiting who
the department accepts designs from.
MR. BROOKS answered that the department can set its requirements
in a bid document to limit it to Alaska residents.
REPRESENTATIVE TARR referred to page 1, lines 6-8, [text
provided previously] and reiterated that adding the language,
"or other products" might be important given the demise of the
duck stamp program. The state wouldn't have to become a retail
distributor, but, in a more real time analysis, it could
determine whether money is being recouped and coffee mugs could
be easily made. She asked whether the department would be
interested in that type of flexibility or whether it is beyond
the scope of what it wants to take on.
MR. BROOKS pointed out that the department's personnel are not
marketers, they are biologists by trade and the department
manages fisheries and game populations, although, currently many
of those programs are being cut through different efforts in
trying to live within its means. The department would assign
marketing duties to staff, and not add staff, but it could add
months to a seasonal employee. In the event the sum total of
mugs, cards, stamps, and prints could generate money to help the
resources of the state and help the department manage the
fisheries it would be open to doing it, not wanting to limit
itself.
CO-CHAIR TALERICO opened public testimony, but closed it after
ascertaining no one wished to testify.
2:32:10 PM
CO-CHAIR TALERICO stated he would hold the bill given there was
a question about the terms and the two year wording.
2:32:29 PM
REPRESENTATIVE JOHNSON related that prior to being a legislator
he was a marketing person and advised that the opportunity here
is not with creating the state's own division to do this
marketing, but creating an ability to generate the artwork and
license it to someone and generate the money off the license as
opposed to actually doing the products. He suggested that
several places come to mind such as the people that make the
gold coins; there could be a salmon coin and the state would
receive a certain percentage off of everything sold. He said he
does not want ADF&G getting into the marketing business and
agreed ADF&G doesn't have the people. The licensing aspect
could be done through the Department of Commerce, Community &
Economic Development, he suggested. He added that he is unsure
about the way it is currently outlined and offered to work with
the sponsor's office.
2:34:08 PM
REPRESENTATIVE TARR reiterated Mr. Ellis's comments regarding
requests for Alaska State Park designs in different formats, and
noted her support for opportunities to raise money in addition
to this bill.
[HB 177 was held over.]
2:34:52 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:34 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB254 Sponsor Statement.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Email AK Trophy Adventures 2-11-2016.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Email APHA 2-12-2016.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Email James P Jacobson 2-15-2016.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Email Sam Rohrer 1-21-2016.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Email Steve H Perrins II 1-26-2016.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 Supporting Documents-Letter Joe Klutsch 2-22-2016.PDF |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| BGCS LBA Audit.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB254 ver A.PDF |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB0177A.PDF |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 177 Sponsor.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 177 Salmon stamps.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 177 FiscalNote.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 177 ARRC Annual Art Program Costs (2015).pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 177 alaska duck stamps ebay.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB177 RR costs.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 177 |
| HB 254 SCI Alaska.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |
| HB 254 FiscalNote.php.pdf |
HRES 3/23/2016 1:00:00 PM |
HB 254 |