Legislature(1993 - 1994)
02/18/1993 05:00 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
JOINT MEETING OF THE HOUSE SPECIAL COMMITTEE ON INTERNATIONAL TRADE & TOURISM THE HOUSE TRANSPORTATION STANDING COMMITTEE February 18, 1993 5:00 p.m. MEMBERS PRESENT FROM THE SPECIAL COMMITTEE ON INTERNATIONAL TRADE & TOURISM Representative Jeannette James, Chair Representative Joe Green Representative Terry Martin Representative Curt Menard Representative Jim Nordlund Representative Jerry Sanders Representative Cynthia Toohey MEMBERS ABSENT None MEMBERS PRESENT FROM THE HOUSE TRANSPORTATION COMMITTEE Representative Al Vezey Representative Curt Menard Representative Bill Hudson MEMBERS ABSENT Representative Richard Foster, Chair Representative Eldon Mulder Representative Jerry Mackie COMMITTEE CALENDAR *HB 115 "An Act extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date." CS MOVED OUT OF COMMITTEE WITH A DO PASS RECOMMENDATION *HJR 20 Urging modification of the North American Free Trade Agreement NOT HEARD Presentation by: Jim Ayers RE: Alaska Marine Highway David Orr RE: Northern Sea Route (* first public hearing) WITNESS REGISTER Representative Bill Hudson Capitol Building, Room 108 Juneau, AK 99801 (907) 465-3744 POSITION STATEMENT: Explained HB 115 Dazee, Executive Baker Aviation P.O. Box 487 Nome, AK 99762 (907) 443-2605 POSITION STATEMENT: In favor of tourism promotion Tina Lundgren, Executive Director Alaska Tourism Marketing Council 3601 C Street #700 Anchorage, AK 99503 (907) 563-2289 POSITION STATEMENT: Supported HB 115 Jim Ayers, System Director Alaska Marine Highway System 1591 Glacier Avenue Juneau, AK 99801 (907) 465-3950 POSITION STATEMENT: Provided information regarding the Alaska Marine Highway David Orr, Northern Sea Route Program Coordinator Department of Commerce and Economic Development P.O. Box 110800 Juneau, AK 99811 (907) 465-2500 POSITION STATEMENT: Provided information regarding the Northern Sea Route PREVIOUS ACTION BILL: HB 115 SHORT TITLE: EXTEND TOURISM MARKETING COUNCIL BILL VERSION: SPONSOR(S): LABOR & COMMERCE TITLE: "An Act extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/03/93 213 (H) READ THE FIRST TIME/REFERRAL(S) 02/03/93 213 (H) TRADE & TOURISM, LABOR & COMM, FINANCE 02/18/93 (H) ITT AT 05:00 PM CAPITOL 102 BILL: HJR 20 SHORT TITLE: AMEND N. AMERICAN FREE TRADE AGREEMENT BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) BROWN TITLE: Urging modification of the North American Free Trade Agreement. JRN-DATE JRN-PG ACTION 01/29/93 176 (H) READ THE FIRST TIME/REFERRAL(S) 01/29/93 176 (H) INTERNATIONAL TRADE & TOURISM, RESOURCES 02/18/93 (H) ITT AT 05:00 PM CAPITOL 102 ACTION NARRATIVE: TAPE 93-2, SIDE A Number 000 CHAIRWOMAN JEANNETTE JAMES called the joint meeting of the Special House Committee on International Trade and Tourism and the House Committee on Transportation to order on February 18, 1993, at 5:00 p.m. Number 021 REPRESENTATIVE BILL HUDSON understood the joint committee would not be taking up the transportation-related bill and asked if that was correct. Number 025 CHAIRWOMAN JAMES replied that the committee would not be taking up HJR 20, related to the modification of the North American Free Trade Agreement; this was postponed until March 4, 1993. Number 029 REPRESENTATIVE HUDSON asked if the business at hand was HB 115. CHAIRWOMAN JAMES replied in the affirmative. Number 032 REPRESENTATIVE HUDSON stated that, as the Chairman of the House Labor and Commerce Committee, he was prepared to present HB 115, which was sponsored by that committee. He explained that HB 115 amended the statute to allow for the continuation of the Alaska Tourism Marketing Council (the Council), until 1996. The Council was due to expire on June 30, 1993. He believed this was a necessary function if this important council was to continue to operate under the statutes of the state of Alaska. REPRESENTATIVE HUDSON noted there had been considerable work and interest in amending HB 115. He then presented a committee substitute (CSHB 115), which he asked the committee to adopt. He was prepared to explain the differences between HB 115 and CSHB 115. Number 093 REPRESENTATIVE CYNTHIA TOOHEY asked that the discussion be delayed until the committee members could get copies of the proposed changes. Number 101 REPRESENTATIVE AL VEZEY asked if he was the only person present that was not a member of the International Trade & Tourism Committee. Number 109 REPRESENTATIVE JOE GREEN commented that the members had two sets of fiscal notes and asked Representative Hudson if he planned to use both in his presentation. Number 112 REPRESENTATIVE HUDSON replied that he would address that later. Number 113 CHAIRWOMAN JAMES noted the arrival of Representative Jim Nordlund. Number 136 REPRESENTATIVE JIM NORDLUND asked why the extension was three years instead of four. REPRESENTATIVE HUDSON said that would be clear when the copies arrived. Number 145 CHAIRWOMAN JAMES handed out Representative Nordlund's statement of goals for the committee. Copies of CSHB 115 were distributed. Number 160 REPRESENTATIVE HUDSON apologized for not having copies of CSHB 115 earlier and stated that "after discussion with the industry and the various state departments, I felt it was better for me to bring you a work product that you could work directly off of and explain why I am proposing to the committee that you adopt a new committee substitute for House Bill 115 and subsequently in the form that I have presented to you." REPRESENTATIVE HUDSON pointed out the title of HB 115 had been substantially modified in CSHB 115, which he said was necessary in order to accommodate some of the other changes that were being proposed. He noted Section 1 amended current law by removing "substantially" with regard to a board member's involvement in the visitor and recreation business so the board member no longer had to be "substantially involved", but only had to be "involved in a visitor or recreation business". He disclosed this had been suggested by the industry to broaden participation on the Council. REPRESENTATIVE HUDSON pointed out further on Page 2, line 12, "the director is a member of the board;" was ADDED before "the governor" and "other" was ADDED before "board members" on line 13, which essentially added one more member to the board, so instead of there being ten members there would be eleven, and the eleventh would be the director of the Council. He noted that currently the statute provided for the governor to appoint ten members, but the Council and the Division of Tourism preferred to have the Council's board elect their own presiding officer from its members rather than the director automatically filling that position. Number 228 REPRESENTATIVE GREEN asked if the "11" had been "10" before and should thus have been underlined. Number 230 REPRESENTATIVE HUDSON clarified the language was taken right out of the statutes and, therefore, was not a change. Number 232 REPRESENTATIVE GREEN asked if that meant there had been 11 votes required before, and if it was currently only 10, where was the 11th vote. Number 238 REPRESENTATIVE HUDSON responded "Damned if I know. I understand your question. Why was it 11 before when there were only 10 board members?" Number 248 CHAIRWOMAN JAMES noted the arrival of Representative Curt Menard. Number 250 REPRESENTATIVE HUDSON continued with his overview of CSHB 115. He noted on line 21, page 2, this draft removed from existing language "the director serves as presiding officer of the board;" which explained the title change and why the bill had expanded to some extent. He noted further that on Page 2, line 22 AFTER "elect" "a presiding officer and" had been ADDED. The last change was on Page 3, Line 20, where "1993" had been CHANGED to "1997". REPRESENTATIVE HUDSON requested the committee either take questions or further testimony at this time, and hoped the committee would consider adoption of CSHB 115. Number 282 REPRESENTATIVE GREEN again asked about the fiscal note. Number 285 REPRESENTATIVE HUDSON said, "The fiscal note is an error and will be reissued, and it will be zero. What happened was the fiscal note from Commerce and Economic Development simply picked up last year's budget, and we do have it, and so this fiscal note should not be adopted, and I would ask that it not be...." Number 295 REPRESENTATIVE TOOHEY asked if there were twenty-one members on the board. Number 300 REPRESENTATIVE HUDSON replied in the affirmative. Number 302 REPRESENTATIVE TOOHEY inquired whether anyone from the Alaska Visitors' Association (AVA), the Tourism Marketing Council, the Anchorage Convention and Visitors' Bureau (ACVB), or any of the convention and visitors' bureaus were present. Number 305 DAZEE said that she was a member of the AVA, Baker Aviation, and the ARDER Executive for Bering Straits Region. She wondered how much Bush representation was on the Council's board. She understood one had to be a "heavy-duty" investor to be on the board and wondered if the term "substantially" also covered the financial amount required. Number 315 REPRESENTATIVE HUDSON responded, "I think one of the primary reasons to the question asked is for that very purpose, to give greater flexibility in appointing someone who only has to be involved in the visitor and recreation business. And I think that's a fair assessment. This bill doesn't say who, from what region, or anything else. It just simply sets up the original language, so all we're doing is removing 'substantially' so as to provide greater flexibility and perhaps to accomplish the very thing that you're talking about. As a matter of fact, I know that's the case." Number 328 TINA LUNDGREN introduced herself as the Executive Director of the Alaska Tourism Market Council. CHAIRWOMAN JAMES asked whether it was proper for the committee to be discussing CSHB 115 prior to having a motion to substitute it for the original bill. Number 333 REPRESENTATIVE HUDSON explained it was proper for him to present CSHB 115, then for the committee to either adopt it or go back to the original version, that being HB 115. Number 335 REPRESENTATIVE TOOHEY MOVED that the committee ADOPT CSHB 115, as a working draft. Without objections, IT WAS SO ORDERED. Number 340 MS. LUNDGREN stated the purpose of CSHB 115 was to extend the Council, and noted the Council had been working for the state of Alaska for the last four years. She pointed out Alaska had a unique arrangement in its cooperative venture between the state and private industry, which was the envy of many other destinations. She reiterated Representative Hudson's explanation of CSHB 115 with regard to the director being a member of the board and the board being allowed to choose its own chair. The program allowed small businesses access to a market to which they otherwise would not have access on their own, without which the large companies could continue their access at the expense of the smaller companies, she said. MS. LUNDGREN added CSHB 115 had the support of the administration, the tourism community, and the Council itself. Number 370 REPRESENTATIVE TOOHEY pointed out she was a member of the Anchorage Convention and Visitors' Bureau and asked if that Bureau had been notified and was comfortable with CSHB 115. Number 375 MS. LUNDGREN replied that Bill Lelander, the ACVB'S CEO, sat on the Council and was very supportive. Number 378 REPRESENTATIVE GREEN MOVED that the committee accept CSHB 115, with the zero fiscal note. Number 383. CHAIRWOMAN JAMES asked if there were any objections. There were none. She then stated CSHB 115 would be MOVED out of this committee, and circulated the committee report for members' signatures. She then introduced Jim Ayers. Number 406 JIM AYERS, SYSTEM DIRECTOR, ALASKA MARINE HIGHWAY SYSTEM, presented information on the Alaska Marine Highway. First he showed photos of the fleet's eight vessels, pointing out the fleet's oldest vessel had recently been sold, the others were being refurbished, and a new ocean-going vessel was now in the governor's budget. He stated there were thirty-two ports, and the importance of the Marine Highway to Tourism and Trade had increased considerably, being responsible for $145 million annually, $18 to $20 million of that being in Anchorage alone, having 1,000 employees, and being the seventh largest business in the state. MR. AYERS said one of every twelve visitors to Alaska used the Marine Highway System and passengers spent an average of sixteen nights. The System could be sold to private investors, but that would not be beneficial to the state, he said. He stated the Inside Passage was "the number one visited area" in Alaska, and marine travel was growing across the world. MR. AYERS reported the Marine Highway System worked closely with industries such as lumber, construction, and fishing, to the extent of even having community representatives help establish schedules. He reported further that the Marine Highway had become an integral part of Alaska's economy, on which many businesses had come to rely. Number 611 REPRESENTATIVE TOOHEY asked what vessel would be used in the Aleutian Chain. Number 614 MR. AYERS replied, "The Tustamena." Number 620 REPRESENTATIVE NORDLUND asked when the new ship would be built and how it would be financed. Number 621 MR. AYERS responded that the legislature had appropriated $7.5 million in 1992 and an additional $7.5 million had been requested for 1993, for a total of $15 million of the approximately $75 to $85 million that it would take to build the new ship. TAPE 93-2, SIDE B Number 000 MR. AYERS continued that he was working with Senator Stevens on acquiring discretionary money. The ship would pay its own operating costs and some of its administrative costs, he said, and reported that much of their operation depended on the legislature's action on this year's capital budget. Number 069 REPRESENTATIVE GREEN asked that Mr. Ayers be scheduled to return to address the committee in detail on the new proposed ferry. MR. AYERS agreed and passed out information about the Marine Highway's budget. Number 090 CHAIRWOMAN JAMES noted the arrival of Representative Terry Martin, and introduced David Orr to talk about the Northern Sea Route. Walt Wilcox passed out relevant information. Number 115 DAVID ORR, NORTHERN SEA ROUTE PROGRAM COORDINATOR, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), presented pictures and information regarding the Northern Sea Route, between the Bering Strait and Mermansk, Russia. He stated that Russia began this route 600 years ago, but the real emphasis started in the early 1900's and was subsequently developed by Russia starting in the 1960's. MR. ORR reported that Russia currently provided year-round services on the northern sea route, and Alaska's current interest was based on the closeness to ports in Europe, which could cut distances in half from Alaskan ports. He discussed and showed pictures of Russia's ice-breakers, which allowed year-round use of the route, pointing out that much of the ice-breaking technology came from Finland. MR. ORR disclosed that last October, he witnessed the signing of an agreement between Alaska and the Mermansk Shipping Company to begin moving two cargo shipments from Alaska to Europe via the Northern Sea Route in 1993. This will be announced by the businesses concerned, and more shipments will be forthcoming via this route, he added. He noted feasibility studies had been requested from the Corps of Engineers regarding extending the navigation season in the Bering Sea as far north as Barrow, and on the Yukon and Kuskokwim Rivers, for freight as well as passenger ferries. Break-up could also be more controlled along Alaska's rivers using ice-breakers, he added. Mr. ORR pointed out the enormous opportunities available for Western Alaska because the Yukon River and all points north of the Yukon River were exempt from the Jones Act. Bethel and/or Nome could become major ports using passenger ships and also barges on the Yukon and Kuskokwim Rivers which could then be loaded directly onto large ocean-going ships, he said. He also informed the committee that hydrofoils could be outfitted with ice-breaking capabilities. Pictures of ice roads were used to show how large ships equipped with their own cranes could be loaded and unloaded during winter. Mr. ORR reported that Russia had twenty-five million people living north of the Arctic Circle and thus required this technology, whereas Alaska had the choice to take advantage of these developments. ANNOUNCEMENTS Number 550 WALTER WILCOX, COMMITTEE AIDE, announced that the meeting previously scheduled for next Tuesday had been cancelled; and the next scheduled meeting for the International Trade & Tourism Committee would be Thursday, February 25, at 5:00 p.m., in Room 102. ADJOURNMENT CHAIRWOMAN JAMES thanked Mr. Orr for his presentation and adjourned the meeting at 6:45 p.m.