Legislature(1995 - 1996)

03/01/1995 01:28 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         March 1, 1995                                         
                           1:28 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chair                                      
 Representative Bill Williams                                                  
 Representative Eileen MacLean                                                 
 Representative Jerry Sanders                                                  
 Representative Tom Brice                                                      
 Representative Jeannette James                                                
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Presentation by the Port of Bellingham Port Authority                         
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 JIM DARLING, Executive Director                                               
 Port of Bellingham                                                            
 625 Cornwall Ave.                                                             
 Bellingham, Washington  98225                                                 
 Telephone:  (206) 676-2500                                                    
                                                                               
 BOB HILPERT, Director                                                         
 Main Line Terminals                                                           
 625 Cornwall Ave.                                                             
 Bellingham, Washington  98225                                                 
 Telephone: (206) 6767-2500                                                    
                                                                               
 LANI CALKINS, Manager                                                         
 Fairhaven, Port of Bellingham                                                 
 625 Cornwall Ave.                                                             
 Bellingham, Washington  98225                                                 
 Telephone: (360) 676-8445                                                     
                                                                               
 MIKE BRENNAN                                                                  
 Bellingham Chamber of Commerce                                                
 1801 Roede Ave.                                                               
 Suite 140                                                                     
 Bellingham, Washington  98225                                                 
 Telephone: (360) 734-1330                                                     
                                                                               
 DAVE BELL, Executive Director                                                 
 Fourth Corner Economic Development Group                                      
 1203 Cornwall Ave.                                                            
 Bellingham, Washington  98225                                                 
 Telephone: (206) 676-4255                                                     
                                                                               
 GARY HAYDEN, Director                                                         
 Alaska Marine Highway System                                                  
 3132 Channel Dr.                                                              
 Juneau, Alaska  99801-7898                                                    
 Telephone: 465-8827                                                           
                                                                               
 REED STOOPS, Lobbyist                                                         
 Port of Bellingham                                                            
 240 Main St.                                                                  
 Juneau, Alaska  99801                                                         
 Telephone: 463-3223                                                           
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-6, SIDE A                                                             
 Number 000                                                                    
                                                                               
 The House Transportation Committee was called to order by Chairman            
 Gary Davis at 1:28 p.m.  Members present at the call to order were            
 Representatives Davis, Masek, Williams, Brice, Sanders, MacLean and           
 James.                                                                        
                                                                               
 CHAIRMAN GARY DAVIS asked the House Transportation committee                  
 members to introduce themselves to the local audience and members             
 of the Port of Bellingham.                                                    
                                                                               
 CHAIRMAN DAVIS introduced Jim Darling, the Executive Director of              
 the Port of Bellingham.                                                       
                                                                               
 JIM DARLING, Executive Director, Port of Bellingham, explained that           
 representation from the Port of Bellingham to Alaska has been                 
 ongoing since the late 1980s.  In the 1980s, there were discussions           
 on moving the Alaska Marine Highway System Ferry terminal services            
 from Seattle to Bellingham.  He expressed interest in the                     
 importance of maintaining ties with Alaska and regarded Alaska as             
 a partnership.  Mr. Darling explained his intentions of this                  
 meeting were to present some background information and explanation           
 of the operations carried out at the Port of Bellingham, including            
 the new passenger/rail service and air transportation.  Mr. Darling           
 explained the Port of Bellingham is a special authority port and              
 there are 70 ports within the state of Washington with only 300 in            
 the entire nation.  Mr. Darling indicated the Port has three                  
 elected commissioners, all from Whatcom County.  They are in charge           
 of appointing executive directors which "retain the balance of the            
 staff."  Mr. Darling said the net revenues of the Port amount to              
 more than $9 million a year.  An additional $3.7 million is taxed             
 throughout the county.  He explained the bulk of those funds are              
 set aside in a "war chest" for environmental problems due to 75               
 years of intensive work on the waterfront requiring some "cleanup             
 activity" over the next decade.  Mr. Darling emphasized, the Port's           
 primary mission is transportation, the secondary mission is                   
 economic development.  He mentioned that the Port of Bellingham               
 "works hand and hand with the private sector as well as other                 
 public agencies and economic development activities."                         
                                                                               
 MR. DARLING continued to explain that the Port of Bellingham is               
 organized into four main areas of businesses:  First, the operation           
 of Bellingham International Airport, the third largest airport in             
 Washington; second, a marine terminal division consisting of marine           
 cargo and passenger service of which the Alaska Marine Highway                
 System (AMHS) is part of that operation; third, the operation of              
 one of the largest small boat harbors in Washington State, and                
 possibly the Northwest, with approximately 2,400 slips for both               
 commercial fishing vessels and pleasure boats within two marinas,             
 one located in Blaine and the other in Bellingham; and the fourth             
 and largest division  Mr. Darling spoke of, is a real estate                  
 division.  The Port is one of the largest landholders for                     
 commercial property in Whatcom County, with approximately 11                  
 restaurants as well as industrial users on the waterfront.  Mr.               
 Darling introduced Mr. Bob Hilpert, Executive Director of marine              
 terminals, overseeing the handling of both cargo and passenger                
 marine facilities.   Mr. Darling next introduced Mr. Dave Bell,               
 Executive Director of the Fourth Corner Economic Development Group            
 which is an Economic Development Council (EDC) for Whatcom County.            
 The EDC consists of a private and public partnership for the                  
 promotion of economic development mainly in the industrial and                
 manufacturing areas.  Mr. Darling then introduced Mr. Dan Robbins,            
 President of the Childrens Company consisting of a large retail               
 operation in Whatcom County.  Mr. Robbins also represents the                 
 Whatcom County Chamber of Commerce and has announced his candidacy            
 for Mayor of Bellingham.  Mr. Darling introduced Ms. Lani Calkins,            
 Manager of the Fairhaven Terminal for the Port of Bellingham.  Mr.            
 Darling said her responsibilities include the operation of the                
 ferry terminal, the new train station facilities and other multi-             
 modal connections involved.  Mr. Mike Brennan was introduced next.            
 Mr. Brennan is President of the Whatcom County Chamber of Commerce.           
 Mr. Darling explained that Mr. Brennan was instrumental in the                
 transition of the AMHS move from Seattle to Bellingham.  Mr.                  
 Darling mentioned that the Chamber of Commerce has been a strong              
 supporter of the Port's activities in the area of transportation              
 and economic development.  Mr. Darling asked Mr. Hilpert to speak             
 on behalf of the Port of Bellingham's Authority Board.                        
                                                                               
 Number 143                                                                    
                                                                               
 BOB HILPERT, Director, Main Line Terminals, Port of Bellingham,               
 presented an artists' rendition of the multi-modal facility, which            
 is due to be completed in July of this year.  He stated the Port's            
 mission is transportation efficiency and was initiated by the re-             
 establishment of the Amtrak service, available in late May of this            
 year.  He stated this train system created an opportunity to                  
 develop a "true multi-modal link" and developed a true interface              
 with rail, water and road systems.  Mr. Hilpert commented that the            
 Bellingham cruise terminal was opened in 1989, welcoming the first            
 Alaska Marine Highway System ferry.  He stated the "multi-modal               
 transportation facility will be added this year and is a                      
 culmination of several years of work."  He further explained                  
 Washington State Department of Transportation and Public Facilities           
 helped finance with the sum of $2.2 million and the Federal Highway           
 Intermodal Transportation Efficiency Act (ISTEA) added funds of               
 $500,000 and the Port of Bellingham with $1.15 million totaling               
 $3.85 million.  He reiterated service from Amtrak will start at the           
 multi-modal facility on May 26 of this year.  Greyhound and                   
 Trailways are currently using the terminal.  The airporter, which             
 provides connections with SEATAC is currently using the Port's                
 terminal.  Mr. Hilpert indicated these transportation systems would           
 enhance transit with local taxis, shuttles and special trains                 
 aiding in connections with downtown facilities and the university             
 with a "rubber tire trolley"; i.e., vehicle.  He said the services            
 mentioned will commence in July of this year with the completion of           
 the multi-modal facility.  He mentioned the AMHS will interface, as           
 will the daily services of the Victoria, B.C. and San Juan, located           
 near Friday Harbor passenger ferries, with operations from May                
 through September.  Also available will be charter excursion                  
 vessels.  He mentioned there will be conveniences such as visitor             
 information centers, food, telephones, gift shops, parking and                
 baggage facilities.  He noted some of these facilities are already            
 in existence.  Mr. Hilpert mentioned there would be vehicle                   
 connections to the Bellingham International Airport taking                    
 approximately 12 to 15 minutes, depending on traffic.  He announced           
 the completion of the runway extension which now provides                     
 approximately 7000 feet of runway.  He stated the Federal Aviation            
 Administration is in the process of building a "bonafide" tower.              
 Mr. Hilpert asked Mr. Darling for figures on the investment amounts           
 for the construction of the tower.                                            
                                                                               
 MR. DARLING estimated a cost of $3.5 million.  Mr. Darling                    
 explained their current tower is a Winnebago trailer and "is the              
 only aviation control tower in the country that's elevation is                
 below the center line of the runway."                                         
                                                                               
 Number 205                                                                    
                                                                               
 MR. HILPERT announced the completion of the "mariport" study for              
 the cruise terminal.  He said they were positioned in the market              
 for expansion of both cargo and passenger services.  He stated, "we           
 have set the wheels in motion and are not sure if we're going for             
 the big guys.  I think we're more prone toward what we consider a             
 nitch market for cruise vessels."  He explained the Port has                  
 extended involvement in cooperative marketing with the AMHS and the           
 Washington State and local travel guides.  Mr. Hilpert mentioned              
 they are recipients of the Giorgio award for the Port's publication           
 on the Passport booklet.  He indicated Ms. Lani Calkins will                  
 further explain the passport booklet.  Mr. Hilpert commented the              
 passport booklet was a small investment on their part with an                 
 expenditure of approximately $500 of "seed" money.  Various groups            
 in the community helped by selling $13,000 to $15,000 worth of                
 advertising.  He mentioned the Port has coordinated transportation            
 schedules and travel plans with the visitor and convention bureau,            
 and the Washington State Transportation Marketing team and are                
 currently packaging travel plans with the convention bureau.  Mr.             
 Hilpert asked if there were any questions on the multi-modal                  
 facility.  He reiterated the completion of the terminal is                    
 scheduled for the end of July.                                                
                                                                               
 LANI CALKINS, Manager, Fairhaven Terminal, Port of Bellingham,                
 presented a brief summary and background on the history of the                
 Bellingham cruise terminal.  She explained that in 1988 the Port of           
 Bellingham heard they were to have ferry services commencing in               
 October 1988, with the opening of the cruise terminal on October 3,           
 1989.  She indicated the main focus of the Port is to provide                 
 complete quality service such as baggage service, telephones,                 
 staffed visitor information centers and easy connections for the              
 traveling public.  She emphasized the importance of the multi-modal           
 facility.  She reiterated what Mr. Hilpert mentioned about the                
 expansion of ferry services out of the Port.  Aside from the AMHS,            
 she mentioned there are daily ferry services in the summer, roughly           
 May through September from Victoria, B.C. and a ferry service from            
 the San Juan Islands.  She stated they are working to develop more            
 ferry service to that facility that would connect with the AMHS.              
 She explained the Port is conducting a variety of cooperative                 
 marketing strategies and she emphasized the importance of working             
 with other groups.  She referred to the contents of the information           
 packets presented to the House Transportation Committee members and           
 called attention to the AMHS schedule.  She explained the Port has            
 a contract with the visitor and convention bureau, and one of the             
 requirements of this contract is to conduct cooperative marketing             
 and to work within the Alaska market.  She made reference to a                
 recently completed Port brochure presenting pertinent information             
 to the traveling public, which lists the services available in                
 Bellingham.  She described the cover predominantly depicted the               
 AMHS, along with the airport and cargo services of the Port of                
 Bellingham.  Ms. Calkins pointed out the local Whatcom County                 
 Visitors Guide, calling attention to the centerfold of the brochure           
 containing a complete listing of all the transportation services              
 available at the Port of Bellingham.  She referred to the                     
 Washington State Travel Guide and regarded it as one of their most            
 successful brochures.  She explained the brochure has been ongoing            
 for a number of years with approximately 200,000 printed annually.            
 She indicated they have done cooperative marketing and joint                  
 advertising on this brochure.  She noted that the House                       
 Transportation Committee has an ad for the state travel guide and             
 not the actual guide.  She pointed out the 1995 ad contains                   
 pictures of the AMHS and the local marina.  Ms. Calkins announced             
 the services of Amtrak will be made available this year and are               
 adjacent to the cruise terminal.  She emphasized they attempt to              
 conduct cooperative advertising within the community and the                  
 entities that will be the most productive.  Ms. Calkins indicated             
 that Mr. Mike Brennan will speak to the Committee with regards to             
 the passport booklet included in the packet.                                  
                                                                               
 Number 279                                                                    
                                                                               
 MIKE BRENNAN, President of the Chamber of Commerce for Bellingham,            
 reiterated Ms. Calkins' remarks on the involvement  of cooperative            
 activities regarding the Port and other merchant districts that are           
 under the service contract with the Port of Bellingham.  He                   
 mentioned that the Chamber of Commerce had presented the concept of           
 the passport booklet to the Fairhaven Merchant Association.  He               
 explained this was the second attempt of this booklet, the first              
 being administered to the "harbor" the previous year.  He explained           
 that the Port of Bellingham contributed $500 of "seed" money.  Mr.            
 Brennan stated the Port of Bellingham "brought to the table the               
 graphic artists that we work with for our major festival activities           
 and presented this Fairhaven passport which just last weekend won             
 the Washington State Tourism Association award, called the Giorgio,           
 for the best new product."  He explained the passport booklet is              
 utilized throughout Fairhaven and presents an excellent overview              
 and complete listing of all the businesses in Fairhaven whether the           
 businesses contributed to advertising or not.  He mentioned the               
 listings were designed for the convenience of the public as well as           
 background information on the community itself.  He referred to a             
 poster that will appear in windows of various businesses for the              
 public as a guide, indicating what is available and where.  Mr.               
 Brennan emphasized the importance of the mentioned projects as it             
 provides an excellent opportunity for further business developments           
 and enhancement of the economy in Bellingham.  He indicated                   
 recently there has been a decline in Canadian visitors to Whatcom             
 County.  He mentioned the dollar difference between the United                
 States and Canada has had a dramatic effect on the economy of                 
 Whatcom County.  He said the "big" years, such as 1991, when there            
 was approximately 31 million Canadians traveling to Whatcom County            
 to shop.  He estimated that currently, there are approximately 26             
 million Canadian visitors traveling through Bellingham.  He stated            
 that "while the impact is still incredible, the difference between            
 26 million and 31 million is sometimes the profitability of many of           
 the retail operations."  He indicated there has been a renewed                
 interest in Bellingham coming from the South traveling on the I-5             
 corridor.  He mentioned the Chamber of Commerce office has                    
 addressed questions of interest to Bellingham from as far south as            
 Everett.  Mr. Brennan explained this was due to travelers wanting             
 to avoid the Seattle area, thus coming north to Whatcom County.               
 Mr. Brennan explained there was a tremendous change in Whatcom                
 County's market place in providing an impetus to further market and           
 publicize the amenities within the community.                                 
                                                                               
 Number 326                                                                    
                                                                               
 DAVE BELL, Executive Director of the Fourth Corner Economic                   
 Development Council in Bellingham, presented further information on           
 Whatcom County.  He indicated that Whatcom County is a relatively             
 small county in terms of population, growing at a rate of 3 percent           
 annually with a current population of approximately 147,000.  He              
 stressed the importance of being a "gateway" for both the north to            
 British Columbia and south to Seattle.  He indicated that within              
 two hours on the freeway in either direction, Bellingham represents           
 a market of approximately 5 million people.  He recollected that in           
 the late 1940s, Seattle and Everett were connected by Highway 99              
 with nothing in between.  Mr. Bell stated, "there is a similar                
 analogy for our area, too.  We're right in the center.  That's good           
 from an economic point of view, but from a growth point of view, it           
 also raises some issues too."  Mr. Bell explained one of the                  
 functions of the Economic Development Council is to help local                
 businesses and to stimulate the production of new businesses.  He             
 stated, "if there are business relationships as supplier relations,           
 goods and services relationships that you might be seeking where we           
 can help you, then I hope I can be a resource for you."  He                   
 concluded by presenting a directory published by the Economic                 
 Development Council which includes economic information such as a             
 list of all the manufacturers and major employers in Whatcom                  
 County.                                                                       
                                                                               
 Number 354                                                                    
                                                                               
 MR. DARLING made reference to the artist's rendition of the multi-            
 modal facility and reiterated the importance and commitment to the            
 community and traveling public with the multi-modal facility.  He             
 believes that upon completion of the multi-modal facility and the             
 services of Amtrak, this will be the only rail/marine link in the             
 United States.  He emphasized the opportunities that will be made             
 available to both Alaskans traveling south and people traveling               
 north bound as well.  He stated the Port's investment is fairly               
 substantial.  The ferry terminal itself was about a $12 million               
 investment in 1989.  He mentioned that the train facility                     
 represents an investment of $1.2 million with an additional $2.7              
 million in federal and state money invested in the multi-modal                
 facility.  He said the Port's investment in the facilities depicts            
 a strong indication of the community support and interest in the              
 connections the facility provides.  He said in addition to that,              
 the Port has been working with both the chamber and the visitor and           
 convention bureau, to try to educate the people of Whatcom County             
 about the transportation opportunities available when traveling to            
 Alaska and the development of more connections such as air                    
 facilities.  He recalled that in the 1980s, air service did exist             
 from Bellingham to Alaska.  He explained because of ridership                 
 reasons, those routes were discontinued and there was                         
 reorganization within the airline industry.  Mr. Darling indicated            
 Whatcom County is currently serving approximately 125,000                     
 passengers a year out of the Bellingham airport.  He mentioned the            
 Port had conducted some market analysis showing approximately 2.5             
 million people currently traveling by air.  He mentioned the                  
 importance of the Port attempting to "pick up" some of this market.           
 He said "this provides a threshold of service," allowing airlines             
 to return to Bellingham, as well as providing alternative access              
 from Bellingham to another hub airport for East Coast connections             
 as well as international travel, other than SEATAC.  He added that            
 SEATAC is congested as is, and service from Bellingham would help             
 to alleviate some of the congestion.  He stated another goal of the           
 Port is the development of more direct connections between                    
 Bellingham and Northwest Washington and Alaska, particularly                  
 Southeast Alaska.  He said one the difficulties the Port has with             
 that is if it were Bellingham to Anchorage, for example, there's a            
 larger ridership load there than into Southeast because there are             
 so many communities that people want to visit.  He mentioned this             
 coming spring, the Port of Bellingham members will be visiting with           
 the major and medium size airlines to discuss connections to                  
 another hub with more direct flights to Southeast Alaska.  Mr.                
 Darling added the opportunities for passenger and air cargo                   
 services will be discussed as well.  He stressed the importance of            
 these services to Alaska, with the use of the multi-modal                     
 transportation facilities which will create opportunities such as             
 air transportation.  Mr Darling asked if there were any questions             
 of the Committee.                                                             
                                                                               
 Number 405                                                                    
                                                                               
 REPRESENTATIVE EILEEN MACLEAN asked if the "industry" participated            
 in the funding for the advertisements that appear in the Industrial           
 Directory.                                                                    
                                                                               
 MR. BELL responded no, but the possibility was discussed.  Mr. Bell           
 explained the publication was designed to help promote the area and           
 provide an introduction to the resources available in Whatcom                 
 County.  He added for the public, it acts as a "for sale"                     
 publication.  He mentioned it was not their major "promotional                
 piece," but it has potential in helping the public look for                   
 business connections from manufacturers or major employers.                   
                                                                               
 REPRESENTATIVE MACLEAN asked for verification in the selling of the           
 Industrial Directory.                                                         
                                                                               
 MR. BELL acknowledged the development council did sell the                    
 publication to the general public.                                            
                                                                               
 MR. HILPERT added one of the items they liked to encourage within             
 the multi-modal facility, is an Alaska State Trade Office in order            
 to help generate some of the cross trade.                                     
                                                                               
 Number 422                                                                    
                                                                               
 CHAIRMAN DAVIS encouraged Mr. Hilpert to make contact with the new            
 commissioner of the Department of Commerce and Economic                       
 Development.  He also indicated this would be an important step               
 with the onset of the Amtrak facility, as well as the currently               
 operating buses such as Trailways, Greyhound and the local busses             
 that are utilizing the multi-modal facility with connections to the           
 airport as well.                                                              
                                                                               
 REPRESENTATIVE JEANNETTE JAMES asked "where can you go from there             
 on Amtrak."                                                                   
                                                                               
 MR. DARLING suggested options such as traveling north of Vancouver,           
 B.C. or travel eastbound on Canadian rail or south to Southern                
 California.  He indicated the route to Southern California is a               
 direct line.  He explained that a "travel corridor" is being re-              
 established between Seattle and Vancouver.  He also mentioned a               
 "corridor" between Seattle, Washington and Eugene, Oregon exists              
 and is being upgraded.  He emphasized by going through Everett,               
 there are links to the East Coast with connections to Chicago or              
 Denver accessing all Amtrak facilities.                                       
                                                                               
 Number 436                                                                    
                                                                               
 REPRESENTATIVE BEVERLY MASEK inquired as to the amount of trade               
 being processed through the Port of Bellingham to Alaska.  She made           
 reference to information provided by the Port of Bellingham on                
 trade services, specifically the Export Trading Company.   She also           
 commented on the map provided by the Port which depicted Bellingham           
 and Pacific Rim markets showing routes to Korea, Japan and Alaska.            
 Representative Masek reiterated her question on the amount of trade           
 traveling from these areas to Alaska.                                         
                                                                               
 MR. HILPERT answered the question in parts.  First he explained the           
 shipping terminal ordinarily handles the "basic on trade" into the            
 major Far East markets, primarily Japan, Korea, Taiwan, China and             
 very little to Southeast Asia, but that's building now and that's             
 mainly the basic products in and around Bellingham and Whatcom                
 County.  He then explained there has not been a great deal done to            
 encourage the production of "traffic" utilizing the AMHS.  He                 
 indicated there used to be the existence of a viable air connection           
 with the fresh fish industry traveling into the San Francisco Bay             
 area and in some cases, Denver.  He explained they had services               
 with both Alaska Air Group and PSA flying out of Bellingham.  He              
 added all of the fish came from the Alaskan market.  He stated this           
 connection no longer exists, but work is being done to re-establish           
 ties with these locations and relevant airlines.  Mr. Hilpert                 
 indicated at this time he was not prepared to give facts and                  
 figures on the re-establishment of these connections.                         
                                                                               
 MR. DARLING commented on an ongoing effort by a number of the                 
 Chambers of Commerce in the Puget Sound area that are engaged in              
 ascertaining the economic connection between Alaska and Washington            
 with particular interest to the Puget Sound area.                             
                                                                               
 MS. CALKINS stated that the funding for the connection is currently           
 underway.  She explained the study was originally done in 1988.               
 However, due to extensive changes, updates are being drafted for              
 current issues on Alaska and Puget Sound, jointly.                            
                                                                               
 MR. DARLING indicated upon completion of the revised plans they               
 would send copies to the members of the House Transportation                  
 Committee.                                                                    
                                                                               
 Number 472                                                                    
                                                                               
 REPRESENTATIVE MASEK made reference to an International Shipping              
 terminal brochure, which presented a breakdown in commodities such            
 as lumber.  She asked what percentage of lumber came from Alaska.             
                                                                               
 MR. HILPERT indicated they had there first Alaska cargo via barge             
 approximately three months ago.  He explained that another one is             
 not scheduled at this time.  He referred to Whatcom International             
 Shipping Terminal as one of their basic outlets to overseas sites.            
 He indicated that the cruise terminal was not seen as an outlet for           
 shipping and trading.  Mr. Hilpert expressed a desire for greater             
 Alaskan trade.  He reiterated the need for an Alaska State Trade              
 Office.                                                                       
                                                                               
 REPRESENTATIVE MASEK made reference to the trade services depicted            
 on the Port directory and the five established foreign trade zones.           
 She asked if the directory was through the federal government.                
                                                                               
 MR. HILPERT indicated that it was established in 1934 during the              
 great depression with no changes to the "modus operandi" of the               
 foreign trade zones.  He stated it was "for employment of                     
 Americans."  He further explained there was an "active zone" on the           
 northeast border in Sumas and an active zone in Blaine, which is              
 basically their western border, as well as one at the Bellingham              
 airport and one close to Bellingham's Bellis Fair Mall for a total            
 of four active zones.  He continued to address Representative                 
 Masek's question on the Export Trading Company.  He indicated this            
 was a new entity established approximately two years ago and the              
 Port has succeeded in making small sales into Taiwan and South                
 Korea.  He explained the purpose was to "stimulate trade from the             
 mom and pops operators within Whatcom County to overseas."                    
                                                                               
 REPRESENTATIVE MASEK asked for clarification on the Foreign Trade             
 Zone.                                                                         
                                                                               
 MR. DARLING stated "because we now have an accord between Mexico              
 and Canada, and we had indeed...we had one with Canada earlier on,            
 before NAFTA was established, we had a good case for Canadian                 
 product being blended with U.S. product coming into the re-export             
 market, back to Canada or into the U.S. market.  Now that Canada is           
 part of the NAFTA agreement, and we need only to comply with the 50           
 percent rule, as far as value and content - ad valorem content is             
 concerned -- because of that, it lessens the influence in the                 
 Canadian market.  However, it also creates another opportunity to             
 allow let's say, someone from Taiwan into the foreign trade zone to           
 blend product with both U.S. and Canada product and still comply              
 with the 50 percent rule.  For example, something like computer               
 keyboards, something simple like that, but used quite frequently.             
 We're doing some of that right now."                                          
                                                                               
 CHAIRMEN DAVIS recognized Mr. Gary Hayden, Director of the Alaska             
 Marine Highway System.  Chairman Davis asked Mr. Hayden if he would           
 care to comment on discussions the Administration has had as far as           
 any relationships with Bellingham and the AMHS or the operations              
 itself.                                                                       
                                                                               
 Number 514                                                                    
                                                                               
 GARY HAYDEN, Director, Alaska Marine Highway System, Department of            
 Transportation and Public Facilities, said he was not aware of any            
 new discussions.  Mr. Hayden emphasized his commitment in the                 
 continuing working relationships established between the Port of              
 Bellingham and the AMHS.  He said the feedback he receives from his           
 staff is encouraging and things seem to be running smoothly.  Mr.             
 Hayden indicated he did not foresee any changes occurring.                    
                                                                               
 CHAIRMAN DAVIS expressed concern for how policies have gone the               
 last couple of years with regards to the economic effects of                  
 building and making investments in new buildings, assuring a stable           
 or growing economy.  He made reference to the cruise ships and the            
 nitch market that the Port is interested in maintaining.  Chairman            
 Davis asked if the cruise ships were sailing into Seattle.                    
                                                                               
 Number 532                                                                    
                                                                               
 MR. DARLING said that currently, because of the Passenger Services            
 Act, they have to call on a foreign port, so they sail from                   
 Vancouver, B.C. and they've made a major investment in cruise                 
 terminal facilities there.  He explained that if federal                      
 legislation were to change, Bellingham would have a great deal of             
 competition from Seattle because to Bellingham is "sandwiched" in             
 between Vancouver, B.C. and Seattle.                                          
                                                                               
 CHAIRMAN DAVIS asked if Bellingham has been affected by logging               
 restraints.                                                                   
                                                                               
 MR. DARLING acknowledged Bellingham has indeed been affected by               
 restraints from logging.  He mentioned currently there are 800                
 people employed at the Georgia Pacific Pulp Mill located on the               
 waterfront in Bellingham.  He said, in fact they represent about 50           
 percent of the Port's cargo commodities in the terms of pulp.  He             
 indicated that a shortage exists and has been devastating in terms            
 of obtaining raw materials and are currently looking into importing           
 materials.                                                                    
                                                                               
 REPRESENTATIVE JAMES inquired as to the contents of the barge                 
 mentioned earlier by Mr. Hilpert with regards to lumber or logs.              
                                                                               
 MR. HILPERT acknowledged that it was lumber and that it was being             
 shipped directly into the U.S. market.  He indicated it was Sitka             
 spruce.                                                                       
                                                                               
 REPRESENTATIVE JAMES asked if there was a particular type of wood             
 timber used at the pulp mill.                                                 
                                                                               
 MR. HILPERT stated it was hemlock.  He explained that some foreign            
 pine chips were tried on an experimental basis.                               
                                                                               
 CHAIRMAN DAVIS announced that there were probably more questions              
 and as long as there were no time constraints, the presentation may           
 continue.                                                                     
                                                                               
 Number 553                                                                    
                                                                               
 REPRESENTATIVE JERRY SANDERS asked what was the foreign source of             
 timber.                                                                       
                                                                               
 MR. DARLING said that Georgia Pacific just received an experimental           
 load of ground pine wood chips from Chile.                                    
                                                                               
 REPRESENTATIVE SANDERS said he misunderstood Mr. Darling's comment            
 on where the wood chips were coming from and then inquired as to              
 what constraints were placed on local timber sales.                           
                                                                               
 MR. DARLING said that Georgia Pulp Mill was importing wood chips              
 and looking at that process for their pulp manufacturing process.             
 He indicated that Mr. Hilpert made reference to the lumber that               
 came from Wrangell, Alaska.                                                   
                                                                               
 REPRESENTATIVE SANDERS asked where the wood chips came from.                  
                                                                               
 MR. DARLING stated the wood chips came from Chile.                            
                                                                               
 MR. BELL explained ten years ago, 90 percent of the wood chips used           
 by the pulp mill were of local origin.  He explained the change for           
 this was due to diminishing supply locally and more recently, the             
 chips have been coming from B.C.                                              
                                                                               
 MR. HILPERT explained that B.C. has increased regulations on the              
 exporting of their wood chips.                                                
                                                                               
 REPRESENTATIVE SANDERS asked what type of wood were the Canadian              
 chips.                                                                        
                                                                               
 MR. DARLING indicated it was "Radiana" pine that was originally               
 grown in Northern California.                                                 
                                                                               
 CHAIRMAN DAVIS asked who owns the local ferry systems that operate            
 out of Bellingham, other than the AMHS.                                       
                                                                               
 MR. HILPERT indicated that the San Juan and local ferries were                
 privately owned.                                                              
                                                                               
 CHAIRMAN DAVIS commented on an effort being made in Southeast                 
 Alaska to privatize some of the ferry operations.  He said he was             
 looking forward to favorable results on that issue.                           
                                                                               
 MR. HILPERT stated that Mr. Darling was spearheading a potential              
 service from Point Roberts to Bellingham and the San Juan Islands.            
                                                                               
 Number 583                                                                    
                                                                               
 CHAIRMAN DAVIS asked about the effect of the recreational fishing             
 and commercial fishing vessels to the marina in Bellingham.  He               
 asked if the fishing has diminished to the point of concern.                  
                                                                               
 MR. HILPERT indicated there has been a decline of fish resources to           
 the area.  Mr. Hilpert stated there was an initiative being                   
 proposed for statewide restrictions on certain uses of bycatch                
 equipment with additional restrictions on salmon fishing in select            
 areas of Puget Sound.  He mentioned at the Port, there are about              
 800 commercial fishing boats within the two marinas and those                 
 numbers are decreasing by 30 to 50 vessels per year.  He explained            
 the bulk of strong fishing production takes place with boats                  
 leaving Bellingham and traveling to Alaska.                                   
                                                                               
 Number 590                                                                    
                                                                               
 REED STOOPS, Lobbyist, Port of Bellingham, commented on the issue             
 of the substantial amount of freight that travels on the AMHS, on             
 private carriers that use the ferries to supplement the barge                 
 service, both to Southeast Alaska and the Interior.  He explained             
 that Lynden Transport operated several vans per ferry trip,                   
 traveling to all the Southeast communities to supplement the barge            
 service.  He mentioned a number of them go on to Haines and bring             
 cargo into Anchorage and Fairbanks.  He explained it was a matter             
 of scheduling the larger SeaLand, Totem Ocean Trailer Express                 
 (TOTE) and Alaska Marine Line (AML) barges that bring the bulk of             
 the cargo into Alaska, but are fixed on a sparse schedule of once             
 a week or once every two weeks.  He indicated that businesses often           
 need more frequent delivery than what the barges provide.  He                 
 explained that the AMHS supplements the infrequency of the barge              
 runs, by providing an alternative to getting freight moved.  He               
 indicated there is a substantial amount of freight transported on             
 the AMHS.                                                                     
                                                                               
 CHAIRMAN DAVIS added that Amtrak has some limited freight service             
 as well.  He acknowledged there was a consensus for concerns on               
 future restraints placed on trade and the development of both the             
 logging and fishing industries.  Chairman Davis indicated these               
 areas are of major concern to Alaskans as far as jobs and economic            
 development.                                                                  
                                                                               
 MR. DARLING indicated that they had a quality working relationship            
 with the Department of Transportation and Public Facility, and                
 thanked the House Transportation Committee for allowing them to               
 make their presentation.                                                      
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House                      
 Transportation Committee, Chairman Davis adjourned the meeting at             
 2:12 p.m.                                                                     
                                                                               

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