Legislature(2005 - 2006)SENATE FINANCE 532
03/21/2006 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Overview and Presentation: Net Return to the State of Alaska from Timber, Tourism, Minerals and Commercial Fisheries. | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 21, 2006
1:38 p.m.
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Ralph Seekins, Vice Chair
Senator Johnny Ellis
Senator Bettye Davis
MEMBERS ABSENT
Senator Ben Stevens
OTHER MEMBERS PRESENT
Representative Peggy Wilson
Representative David Guttenberg
COMMITTEE CALENDAR
OVERVIEW: Net Return to the State of Alaska from Timber,
Tourism, Minerals and Commercial Fisheries.
PREVIOUS COMMITTEE ACTION
None to be recorded
WITNESS REGISTER
BILL NOLL, Commissioner
Department of Commerce, Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Presented overview.
AL CLOUGH, Deputy Commissioner
Department of Commerce, Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Presented overview.
GLENN HAIGHT, Fisheries Development Specialist
Office of Economic Development
Department of Commerce, Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Answered questions.
CARYL McCONKIE, Tourism Program Manager
Office of Economic Development
Department of Commerce, Community & Economic Development
PO Box 110800
Juneau, AK 99811-0800
POSITION STATEMENT: Answered questions.
ACTION NARRATIVE
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 1:38:56 PM. Present were Senators
Davis, Ellis, Seekins and Chair Bunde.
^Overview and Presentation: Net Return to the State of Alaska
from Timber, Tourism, Minerals and Commercial Fisheries.
BILL NOLL, Commissioner, Department of Commerce, Community &
Economic Development (DCCED), said the question he was asked to
answer is: does the state make any money back on the investments
it makes in its resources. He related that the DCCED, the
Department of Revenue (DOR) and the Department of Fish and Game
(ADF&G) would lead them through the results. He then introduced
Al Clough, Deputy Commissioner, DCCED, who presented the
overview. [A copy of the power point is available through the
Senate Labor and Commerce Committee at 465-4843 and at the
Legislative Library at 465-3808 at the end of the legislative
session.]
AL CLOUGH, Deputy Commissioner, DCCED, presented a power point
saying the review would cover net return to State of Alaska
investments in timber, tourism, minerals and commercial
fisheries - essential money into the State of Alaska's coffers
versus money out. He said his slides aggregated the data and
then provided detail of the various funding sources for both.
Total gross revenues for those categories in 2005 were $156
million; total operating expenditures were $110,381 million -
resulting in a net to the state of a little more than $44
[L1]million. The timber industry made a modest return; minerals
returned a little over $12 [L2]million; fisheries returned $11
million[L3][L4]; and tourism returned $20 million.
1:42:44 PM
MR. CLOUGH explained that the majority of the timber revenues
are from corporate income tax and timber sale receipts on state
lands and a modest amount of national forest receipts. The
Department of Commerce, Community & Economic Development has a
small effort in promoting the forest products industry that is
GF supported. The DNR Division of Forestry took in $2.2 million
and had $1.6 million budget. Corporate income tax, timber sales
and National Forest receipts were sources of revenue.
Predominant state expenditure happened in the DCCED and DNR (His
figures excluded what DNR spends on fire suppression).
MR. CLOUGH said that Tourism revenues come from portions of the
vehicle rental tax, corporate income tax, hunting licenses, the
Marine Highway System and a modest amount from federal funds
totaling about $50 million with expenditures going towards
marketing and the Alaska Travel Industry Association.
1:47:48 PM
The Division of Commercial Fisheries has a breadth of programs
that bring about $90 million into the state.
1:49:21 PM
CHAIR BUNDE asked him to explain the minus figures in his
preliminary report.
1:49:36 PM
GLENN HAIGHT, Fisheries Development Specialist, Office of
Economic Development, DCCED, responded that the preliminary
report indicated that $20 million in the fisheries business tax
category was supposed to go to communities, but it was pointed
out that managing the seafood industry was not really an
expense. So, that portion was taken out and that is reflected in
the later part of the report.
CHAIR BUNDE asked him to explain the $20 million that is shared
with communities.
MR. HAIGHT explained that the fisheries business tax brings in
$28 million and the fisheries resource landing tax brings in $9
million - half of which is appropriated by the Legislature to
communities through the shared business tax program. It is not a
real commercial fisheries expense.
CHAIR BUNDE asked what the communities use it for.
MR. HAIGHT replied that he didn't know exactly.
CHAIR BUNDE commented that sounded like a form of revenue
sharing and he wanted to know why that money was being sent to
those communities.
REPRESENTATIVE PEGGY WILSON explained that that money comes from
the raw fish tax that is collected in communities where the fish
are landed. Part of the tax goes back to the community in which
it was collected.
1:52:17 PM
MR. CLOUGH also explained that those dollars were indicated as
an expense in an earlier version of this presentation, but they
are actually being collected in trust and then given back to the
communities. He reported that the seafood industry had "turned a
hard corner" and has been quite successful in recent times.
1:55:01 PM
He went on to explain the mining and tourism numbers and
mentioned that the study was not exhaustive. The minerals
industry gross value had gone from $1 billion to $2 billion and
it contributes over 3,000 direct jobs to the economy. However,
he did mention that Pogo Mine was just pouring its first gold
and significant returns to the state treasury would start coming
in from that in FY 2008 or 2009. He offered to answer questions
at this point.
2:00:11 PM
CHAIR BUNDE said he had been very helpful in answering his
question of what these various expenditures return to the state
and that he had received a more positive picture than he had
anticipated.
2:00:58 PM
SENATOR SEEKINS asked if all the non-resident hunting, fishing
and trapping licenses included in the tourism category included
any federal matching funds.
2:01:21 PM
CARYL McCONKIE, Tourism Program Manager, Office of Economic
Development, DCCED, indicated that those figures didn't include
matching funds.
2:01:47 PM
SENATOR SEEKINS asked if there is a threat in the short term
that any of those federal funds might not become available for
commercial fisheries.
MR. HAIGHT said he couldn't answer that, but the federal sources
seemed to be pretty standard so far.
COMMISSIONER NOLL said while the state has done very well in
terms of exporting fish because of its heavy marketing effort,
he was still very concerned about the marketing of our
commercial fisheries. He reported that the Alaska Seafood
Marketing Institute (ASMI) has about $2 million left in the bank
and another $7 million coming in from the federal government,
which is some comfort.
2:04:42 PM
CHAIR BUNDE asked if the fishing industry has cycles and is it
gradually trending up.
COMMISSIONER NOLL replied that Alaskans are very concerned after
9/11 about the impact on this industry. There was a slight dip,
but things have moved back in a positive direction. He had some
concern about how the cost of fuel and passport control at
border crossings would impact marketing efforts. But, he had
contacted Alaska's congressmen who are helping on the federal
level and the trend is up in this area.
The biggest trend in the fisheries market has been the
devastating effects of acceptance of farmed salmon out of Chile
and Norway. "It just cavitated our salmon industry here. Values
dropped about 80 percent." However, the industry has seen a very
strong comeback through support of its communities and just
plain good luck associated with the growing concern that farmed
fish is not good for you. He reported that the state's fish
exports in 1998-99 were $700 million, but in 2005, exports were
up to about $2 billion.
2:07:36 PM
COMMISSIONER NOLL said that the forestry industry has a
different story. "We have shot ourselves in the foot - as I
think everyone in this room is probably well aware." On this
front, he along with the state's team would be meeting with the
U.S. Forest Service and hoped to formulate a plan that would
reestablish the availability of the resource, itself.
2:08:31 PM
MR. CLOUGH interjected that a joint effort was under way between
the DCCED, DNR, U.S. Forest Service and the Fairbanks Economic
Development Corporation on trying to advance the interior forest
industry.
2:09:50 PM
CHAIR BUNDE encouraged him to hold on to the base line and come
back to the legislature next year.
COMMISSIONER NOLL highlighted that the state has another
commodity - money. He said, "Our Permanent Fund makes more money
than anything else."
CHAIR BUNDE acknowledged that and added that Alaska has also
advanced its trust industry, which has generated some income for
the state.
COMMISSIONER NOLL added that around the country those trusts are
named "Alaska trusts." He thought that concept could be
exploited more.
CHAIR BUNDE extended his sincere thanks to the department for
this presentation and said that he would also entertain a
meeting regarding funds returned to the state via the Permanent
Fund Corporation. There being no further business to come before
the committee, he adjourned the meeting at 2:12:53 PM.
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