Legislature(1997 - 1998)
02/05/1997 01:35 PM Senate CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 5, 1997
1:35 p.m.
MEMBERS PRESENT
Senator Jerry Mackie, Chairman
Senator Gary Wilken, Vice Chairman
Senator Dave Donley
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 23
"An Act levying and providing for the collection and administration
of excise taxes on the rental or furnishing of transient lodging,
and authorizing disposition of estimated receipts from that tax;
and providing for an effective date."
- CSSB 23(CRA) ADOPTED & MOVED OUT OF COMMITTEE
SENATE BILL NO. 50
"An Act relating to administrative penalties for violation of
public water supply system requirements; amending Alaska Rule of
Civil Procedure 82 regarding attorney's fees; and providing for an
effective date."
- HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 23 - Community & Regional Affairs minutes dated 1/22/97.
SB 50 - No previous action to record.
WITNESS REGISTER
Senator Bert Sharp
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 23
Ms. Sheila Romero, Executive Director
Fairbanks Convention & Visitors Bureau
550 First Ave.
Fairbanks, AK 99701
POSITION STATEMENT: Testified in opposition to SB 23
Bill Elander
Alaska Tourism & Marketing Council
526 W. 4th Ave.
Anchorage, AK 99501
POSITION STATEMENT: Testified in opposition to SB 23
Ms. Susan Bell, President
Juneau Convention & Visitors Bureau
379 S. Franklin St.
Juneau, AK 99801
POSITION STATEMENT: Testified in opposition to SB 23
Ms. Diane Mayer-Pearson
4541 Sawa Circle
Juneau, AK 99801
POSITION STATEMENT: Does not support SB 23
Phil & Karen Greeney
Juneau, AK
POSITION STATEMENT: Opposed to SB 23
Ms. Judith Wood
Gustavus Visitor Association
Gustavus, AK
POSITION STATEMENT: Supports broad based tax
Gerd Krause, General Manager
Baranof Hotel
127 N. Franklin St.
Juneau, AK 99801
POSITION STATEMENT: Testified in opposition to SB 23
Ms. Janice Adair, Director
Division of Environmental Health
Department of Environmental Conservation
555 Cordova St.
Anchorage, AK 99501
POSITION STATEMENT: Offered information on SB 50
Keith Kelton, Director
Division of Facility Construction & Operation
Department of Environmental Conservation
410 Willoughby Ave., Suite 105
Juneau, AK 99801-1795
POSITION STATEMENT: Offered additional information on SB 50
Breck Tostevin, Assistant Attorney General
Environmental Section
Department of Law
1031 W. 4th Ave., Suite 200
Anchorage, AK 99501-1994
POSITION STATEMENT: Answered questions on SB 50
ACTION NARRATIVE
TAPE 97-5, SIDE A
Number 001
CHAIRMAN MACKIE called the Senate Community & Regional Affairs
Committee meeting to order at 1:35 p.m. All members of the
committee were present.
SB 23 EXCISE TAXES ON TRANSIENT LODGING
CHAIRMAN MACKIE brought SB 23 before the committee and directed
attention to a C&RA committee substitute which incorporates an
amendment adopted at the committee's January 22 meeting.
SENATOR WILKEN moved the adoption of CSSB 23(CRA). Hearing no
objection, it was so ordered.
Number 020
SENATOR BERT SHARP , prime sponsor of SB 23, related he met with Mr.
Elander of the Anchorage Convention & Visitors bureau following the
previous meeting on SB 23, where they discussed the need to come to
the table and jointly work on some kind of long range funding plan
to finance the state participation in the marketing of tourism for
the state of Alaska. However, after that meeting, Mr. Elander sent
out a member's alert letter in which he made some statements that
Senator Sharp found distressing. Mr. Elander said that most
legislators know that representatives of the tourism industry are
willing to work towards a broad based taxation policy that will be
acceptable; however, Senator Sharp said he doesn't know of the
industry coming forward with their recommendations, and he has been
involved with that discussion for over nine years. Mr. Elander
also made reference to a dedicated fund, but Senator Sharp stressed
that there is not going to be a dedicated fund just to fund tourism
marketing in this state.
Number 080
SHEILA ROMERO , Executive Director, Fairbanks Convention & Visitors
Bureau, stated the bureau, its board of directors and 400 members
encourage the committee to kill SB 23. If passed, the bill would
have far reaching effects on Alaska's entire visitor industry. For
instance, Fairbanks area hotels, lodges and bed and breakfasts
would collect this tax in addition to the City of Fairbanks and
Fairbanks North Star Borough's current 8 percent bed tax.
Ms. Romero said this proposed tax puts the Alaskan tourism and
hospitality industry in a competitive disadvantage and will likely
diminish the contribution to the communities, to the cities and to
the state economy that is currently derived from the visitor
industry. If it costs more in taxes for the visitors to experience
Alaska, they spend less on the goods and services that the
statewide businesses provide to them, or they don't come at all.
In closing, Ms. Romero urged defeat of the legislation.
Number 110
SENATOR PHILLIPS asked Ms. Romero what the industry is doing in the
Fairbanks area as far as trying to come up with some alternatives.
MS. ROMERO said she believes the industry statewide is ready and
willing to work on this issue. She also pointed out the tourism
industry right now is contributing about $124 million to local and
state government through taxes and other fees that they pay.
Number 183
CHAIRMAN MACKIE commented that the idea of the state wanting the
industry to step up to the plate a little bit more is not a new
idea; it is something that has been around for a long time. He
said he thinks the state will be best served if everyone works
together to find that comfort zone so that adequate marketing for
Alaska as a destination can still be provided. He asked Ms. Romero
if she had any ideas as to how to increase the involvement from the
industry so that there can be that partnership. MS. ROMERO replied
that the Fairbanks Convention & Visitors Bureau's main concerns
with the bill is that it is not a broad based tax and there is no
assurance that this money will be used for tourism marketing.
CHAIRMAN MACKIE reminded her there is a prohibition in the Alaska
Constitution against dedicated funds, and he suggested that coming
to the table and working with Senator Sharp and the committees is
probably the best way to work through the different philosophies on
this issue.
Number 240
BILL ELANDER , a member of the Board of Directors of the Alaska
Tourism and Marketing Council, said from the point of view of those
in marketing, he thinks all would agree that public funding is not
appropriate for tourism marketing, but the government role is to in
some way level the playing field between the competition of this
state. Unfortunately, the legislatures and the governing bodies of
this state's competition don't feel that way, and they put
tremendous amounts of public dollars to draw Alaska's visitors to
their destinations.
Mr. Elander noted a comment was made during the previous hearing on
SB 23 that the state is carrying most of the marketing dollars, but
he pointed out $42 million was marketed for Alaska last year. He
said the tourism marketing dollars for the generic part of Alaska
to get that word out for these small emerging businesses to enable
them to grow and develop is a worthy cause. He stressed it is not
a whole a lot of money that is needed, and the beauty of Alaska is
that a modest budget is all that is needed to get its image out
there, but he cautioned that Alaska has got to get its message out
there because it is getting buried by the competition.
Mr. Elander suggested, as a possible alternative to SB 23, perhaps
a tax with a sunset date to see if enough dollars are generated and
to see if the dollars are committed to satisfy both sides on the
issue. He added that he doesn't know if something like that will
work, but sitting down and discussing those types of ideas will
work better than bringing forth a bill that targets one segment of
the industry.
SENATOR WILKEN asked Mr. Elander to expand on his comment that the
government's role in tourism marketing is to level the playing
field. MR. ELANDER explained that, if another state government was
using their taxes and revenues to compete against one of our major
industries, he thinks it would be incumbent on our state government
to sit down with its industries and see how it can help mitigate
the situation. He said the industry is asking for the state's
help, and he reiterated that it is the generic part of this
marketing program that is so important to them.
Number 352
SUSAN BELL , President, Juneau Convention and Visitors Bureau, said
the businesses that are members of the JCVB and SATC could not
begin to compete with the heavy marketing dollars that are
available with some of the larger companies. She has worked for
three visitor bureaus and each of those bureaus has relied very
heavily on leveraging the state's program, as does SATC. She
pointed out that Juneau gets over a $100 million economic impact
from the visitor industry, and when looking at the state, something
that develops healthy municipalities is going to make sure that
each of our communities needs less municipal assistance at the
state level. She stated the visitor industry is a very competitive
marketplace that is very cost sensitive, and we have to be aware of
how we fall in on a world competitive scale.
CHAIRMAN MACKIE said he knows from being part of the industry
himself that there is a strong desire for additional state
contribution to marketing at a time when our budgets are dwindling,
and this is one way to generate many millions of dollars which
actually could help the industry. He asked if anybody has ever
stopped to take a look at that angle versus the attitude that the
tax will destroy the industry. MS. BELL replied that AVA and
others have voiced support for a broad base tax, and the major
stumbling blocks over SB 23 is that it is not broad based enough.
Number 406
DIANE MAYER-PEARSON , owner of Pearson's Pond Luxury Inn & Travel in
Juneau, testifying in opposition to SB 23, said the majority of
potential travelers list price as one of the things that makes them
reject Alaska as a visitor destination and passage of this
legislation would mean visitors to the Juneau area would be paying
a total of 14 percent in taxes. She advised that as the owner of
small business, she relies very heavily on the image campaign
through the Alaska Tourism and Marketing Council to help promote
Alaska.
Number 431
PHIL GREENEY , who along with his wife owns a bed and breakfast in
Juneau, also voiced concern about 14 percent in taxes on their
particular service. He said he doesn't know of any other service
in Alaska that pays that kind of rate. He suggested a much more
broad based way to generate more funds would be a much more
desirable way to go, and it would be much easier for the people in
the small business community to bear.
KAREN GREENEY of Juneau, said when we market Alaska, we are
marketing entry to Alaska to everyone. If there needs to be a tax
to supplement or to help the state finance tourism marketing, it
needs to be broad based, one where everyone, no matter how they
enter the state, will be paying their fair share of that tax.
Number 494
JUDITH WOOD, a member of the Gustavus Visitor Association and owner
of a fishing lodge in Gustavus, said that area is proposing
incorporation and that incorporation petition includes a three
percent bed tax, which has mixed feelings among the lodge owners in
Gustavus, and she thinks adding an additional two percent tax would
meet with opposition from lodge owners and bed and breakfast
owners. She supports more marketing of Alaska and a broader based
tax.
Number 523
GERD KRAUSE , General Manager of the Baranof Hotel in Juneau, said
not only is the bed tax used for marketing tourism, but it is used
in communities to help build convention centers and to bring more
business into the communities. An added two percent tax would
diminish these communities' chances of attracting conventions,
especially when competing for out-of-state conventions.
Number 542
SENATOR SHARP expressed his appreciation for all the input from the
various industry people. He said there are some innovative ways
possibly that a revenue bill could be structured to give assurance
that the revenue would be spent on marketing tourism. He pledged
his willingness to work with all concerned to find a way to fund
tourism marketing on a state basis and to spread the cost to all of
those that are benefiting from it.
There being no further testimony on SB 23, CHAIRMAN MACKIE stated
it was his intention to move SB 23 out of committee, as well as
stating that as a lodge owner himself and part of the visitor
industry he would be not be voting on whether to move the bill from
committee.
Number 574
SENATOR WILKEN moved CSSB 23(CRA) and the attached fiscal notes be
passed out of committee with individual recommendations. Hearing
no objection, it was so ordered.
Number 578
SB 50 PUBLIC WATER SUPPLY VIOL: ADMIN PENALTIES
CHAIRMAN MACKIE brought SB 50 before the committee as the next
order of business.
TAPE 97-5, SIDE B
Number 001
JANICE ADAIR , Director, Division of Environmental Health,
Department of Environmental Conservation, explained Congress
reauthorized the Safe Drinking Water Act (SDWA) in 1996 and added
a new requirement for primacy of the drinking water program.
Another change was requiring primacy for continued access to
federal construction funds for drinking water systems.
Ms. Adair pointed out that the state of Alaska has primacy for the
drinking water program at this time as does all other states except
for Wyoming. Primacy means that the state manages and enforces the
terms of the SDWA in lieu of the federal government. It affords
the state several benefits, including the ability to waive certain
monitoring requirements for specific water systems. She related
these waivers have saved almost $1.5 million in laboratory costs
for systems that are located in the districts of committee members.
Primacy also allows the department to work one-on-one with systems
on solving their problems, and that helps ensure the delivery of
safe water to the communities served.
SB 50 will provide DEC the authority to establish a program for
administrative penalties. It sets an amount of $1,000 per day per
violation for systems that serve more than 10,000 people, and for
all other systems, the penalty may not exceed $750 per day.
On page 2, beginning with line 10 and ending on page 3, line 4, it
outlines the factors the department thought were important to be
considered when establishing an amount of a penalty.
Ms. Adair pointed out that Section 7 of the bill delays the actual
effective date of the penalty authority until the EPA tells the
state it must have administrative penalty authority to retain
primacy for the drinking water program.
Number 035
CHAIRMAN MACKIE referred to the title of the bill and asked for an
explanation of change to the Alaska Rules of Civil Procedure. MS.
ADAIR explained that the administrative penalty for a violation is
a federal mandate. The Civil Procedure Rule change is not a
requirement of federal law, but where there is a water system that
refuses to pay a penalty and it necessitates taking them to court
in order to get them to do what needs to be done and to pay the
penalty, then that change would allow the state to recover those
attorney fees.
Number 050
SENATOR HOFFMAN referred to subsection (d) on page 3, line 8, which
provides a 30-day period in which a person can file an appeal after
receiving an assessment notice on a penalty, and suggested it was
too short a tim period and that it should be changed to 45 days.
MS. ADAIR stated the department would not have a problem with his
suggested change.
SENATOR HOFFMAN then referred to page 3, line 19, which provides
that the person who receives an administrative penalty can file a
notice of appeal in the superior court. He pointed out that people
in the smaller communities would have to fly in to file an appeal,
and he questioned why that couldn't be done in a district court
because there aren't that many superior courts in the state. BRECK
TOSTEVIN , Assistant Attorney General, Department of Law, responded
that traditionally administrative appeals from an agency action go
to superior court and a superior court acts as an appellate court
and reviews the agency action as opposed to the district court, so
that's why those provisions were drafted that way.
SENATOR HOFFMAN referred back to subsection (d) and said it
provides that the department may extend the time periods in the
subsection for good cause. He then asked if there was a definition
of "good cause." MS. ADAIR answered that she did not know, but it
would be something that the department would want to address the
regulatory development process as they put the program together.
Number 105
SENATOR WILKEN referred to the sectional analysis and asked if this
issue only deals with Anchorage, Juneau, Fairbanks, one air force
base and two army bases. MS. ADAIR said those six systems are the
ones that serve more than 10,000 people so those would be the
systems that would be subject to the $1,000 per day per violation
penalty. For all other systems in the state with less 10,000
people are subject to a $750 per day per violation penalty.
SENATOR WILKEN inquired when the last time there was an issue that
required the filing of a lawsuit in a matter such as drinking
water. MS. ADAIR thought it was in the very early 1990's, it was
a system in Southeast Alaska, and it was a criminal issue.
SENATOR WILKEN voiced his concern that as a society we need to talk
about administrative penalties and, particularly, allowing DEC to
impose them unilaterally. He said this is probably an excellent
example of the heavy handed way that government controls what we
do, both state and federal. He suggested there needs to be a
better way to do this and not to just give carte blanche approval
to DEC to sanction something as simple as providing good drinking
water.
CHAIRMAN MACKIE asked Ms. Adair what would happen if this
legislation did not pass. MS. ADAIR replied that at some point in
time, the EPA would begin the process to withdraw primacy for a
drinking water program, and if primacy was withdrawn, the program
would become an enforcement only program. She related that 85
percent of the state's drinking water program is funded by EPA,
which amounts to approximately $1 million. The 1996 amendments to
SDWA added construction funds for drinking water systems, and in FY
98 that is expected to be about $28 million to the state.
Number 180
In a brief discussion on why the appeals have to go a superior
court instead of a district court, it was concluded that it is a
standard that is set out in the Administrative Procedures Act.
SENATOR DONLEY suggested that could be amended if Senator Hoffman
thought his constituents would be better served by access to
district court.
Number 215
SENATOR HOFFMAN stated he agrees with Senator Wilken's statement
about the heavy hammer that this legislation is giving DEC, but
because it is required in order for the state to comply with the
changes in SDWA and to continue to receive funds, he suggested
working on it to make sure that the department does not have so
much discretion on the use of that heavy hammer.
KEITH KELTON , Director, Division of Facility Construction &
Operation, Department of Environmental Conservation, said what
Congress is attempting to do with the changes in SDWA is respond to
an unfunded mandate complaint. They are putting a carrot in this
Safe Drinking Water Act reauthorization that says they will fund a
low interest loan program with state participation. The initial
funding, starting in FY 96, was $27 million and the state has to
put in a match of $5 million, so the there will be a total of $32
million for low interest loans for solving community infrastructure
problems. The stick they are throwing in is the administrative
penalty, and if the state doesn't do the administrative penalty, it
loses primacy and the funding that goes with it, he said.
Number 365
SENATOR WILKEN commented that on the campaign trail he heard a lot
of good things about what the Legislature had been doing in the
rural areas in regard to sewer and water, and his comments, by no
means, should be taken that he doesn't support that. He just wants
to make sure that the process isn't slowed down by having someone
or some group get out of control and forget where the power really
lies, and that's why he speaks against the ability to just simply
write an order that stops the process.
MR. KELTON related that probably the primary recipients of these
loan funds are the larger urban communities, but any municipal
government can apply. For instance, Anchorage has received well
over $30 million in the waste water program. The smaller
communities normally rely on a grants program rather than the loan
program.
CHAIRMAN MACKIE requested that Senator Hoffman and Senator Wilken
take a further look at this issue, both from an urban and rural
perspective, and work with the people at DEC to see if some of
these problems can be worked out before another hearing is
scheduled on the legislation.
There being no further business to come before the committee, the
meeting was adjourned at 2:48 p.m.
| Document Name | Date/Time | Subjects |
|---|