HOUSE BILL NO. 358 "An Act relating to an advertising campaign in support of opening the Arctic National Wildlife Refuge for development." Co-Chair Stoltze opened the meeting and reported that HB 358 was unchanged. Vice-chair Fairclough MOVED to ADOPT HB 358, 27-LS1406\M as a working document. There being NO OBJECTION is so ordered. 9:41:36 AM REPRESENTATIVE LANCE PRUITT, SPONSOR presented HB 358 as an advertising campaign to open the Arctic National Wildlife Refuge (ANWR) for development. The bill would direct the state to contract with a qualified trade organization to advertise opening the coastal plain of ANWR for oil and gas exploration and development. The Alaska National Interest Land Conservation Act of 1980 prohibited the leasing or other development leading to the production of oil and gas from the Arctic National Wildlife Refuge. He stressed that domestic demand for oil continues to rise. The proposed trade organization could communicate that new technology had greatly improved the environmental impact on drilling and that oil and gas development can coexist in Alaska's arctic. He concluded that state revenue depends on resource development; therefore it makes sense to promote responsible development to benefit Alaskans. DIRK CRAFT, STAFF, REPRESENTATIVE LANCE PRUITT, informed the committee that the legislation has been modeled directly after the state's tourism marketing contract statute. 9:44:21 AM Representative Wilson asked if there was a needed amount to make the program effective. Representative Pruitt responded that a qualified trade organization would determine the amount. The amount would be whatever the organization would be willing to bring to the table, and then the state would match that amount. He expected it would be less than $500,000 from a small organization. If a larger organization was interested then the amount would be larger, but the expected amount would probably be under one million for the first year. Representative Gara agreed it seemed reasonable to set the record straight on ANWR. He expressed his concern that some individuals may reap a short term advantage, but give Alaska a long term disadvantage. He suggested that ads taken out may target certain political candidates in the lower 48. The short term benefit could be for candidates to use the cause for personal gain to obtain more votes, but the long term damage would be other individuals hating Alaska for interfering in another state's politics. He believed some politicians, who were for opening ANRW, would support it, but, once elected, makes sure it was never opened. He would like accurate information about ANWR to set the record straight in the lower 48, but cautioned against targeting candidates. Representative Pruitt indicated he would be willing to talk with Representative Gara. He avowed that the intent was not to influence political candidates, but to provide an opportunity to address constituents in the United States about the information. He wanted to make sure people had accurate information on ANWR. 9:48:38 AM Co-Chair Stoltze appreciated Representative Gara's point. He wondered if the state should be spending money on initiatives and referendums and stressed that it could be counterproductive to use state money in that manner. He indicated the desire to move the bill out of committee, but a few policy questions needed to be cleared up. Representative Pruitt agreed. Representative Costello indicated she was trying to understand the logistics of the bill. She questioned if there would be proposals from organizations, the state would identify the winning proposal, and then match the proposal's amount. She asked how that would work and how the money would be raised. Representative Pruitt answered that the trade association, determined by the Department of Commerce, would provide the proposed money amount that they received from many different sources. The money would be from the private sector and the organization would be responsible for acquiring the money; it would not be on the state. The legislature then would appropriate the money to match the amount. The ownership of the marketing campaign would be shared jointly by the trade association and the state. Representative Costello asked if an amount had been determined for the campaign. Representative Pruitt specified that that he did not want to put a limit on the marketing group. The plan was to market Alaska's resources and bring more money into the state. He believed Alaska should celebrate if a group wanted to put a large amount of money into the campaign. He did not want to limit what the private sector could bring in. He emphasized that it was a 50/50 program. He reiterated that to date the number was closer to $500,000. Representative Costello pointed out that there are organizations presently working on the issue and wondered if the bill included coordination to prevent duplication of efforts. Representative Pruitt stated that there was nothing in the bill that specifically states there must be coordination to avoid duplication. He was not aware of any other campaign on a national scale regarding the issue. 9:54:18 AM Co-Chair Stoltze appreciated that on page 1, line 13-14 where it states a direct ownership of the campaign. Representative Neuman indicated his confusion on how the funding mechanism worked. Representative Pruitt revealed that the bill was modeled after the tourism campaign. The Department of Commerce does not have a monetary fund, but the trade association would approach the department with a monetary amount and then money would be appropriated by the legislature up to 50 percent. Representative Neuman summarized that the state would enter into a contact with a qualified trade association, the association would get funding for lobbying for ANWR, and then ask the legislature for matching funds. Representative Pruitt emphasized that the plan was for a marketing campaign not lobbying. He continued that the association would find the money; it would not be on the state. Representative Neuman voiced his concern over the state's monetary obligation and would like to see a limit put on for budgetary reasons. He would like further information on the state's obligation. Co-Chair Stoltze reiterated that the monetary number would be subject to appropriation. Representative Neuman questioned if the state does not match the amount by 50 percent, what then would happen. 9:59:46 AM Representative Pruitt responded that choices would be made. The campaign could still go forth even if the state does not match the 50 percent. Representative Doogan wanted an idea of how much money has been put into the ANWR Arctic Power. Representative Pruitt did not know the exact amount. Arctic Power money is used for individuals to talk directly to people on Capitol Hill. The purpose of the campaign was not to reach people in Washington, but to communicate information to the people who elect the representatives to Washington. Representative Doogan wanted the Arctic Power information. He expressed his frustration with all the indeterminate fiscal notes. He asked for a projection, not just a blank check. He did not believe it responsible to keep rubber stamping indeterminate fiscal notes. Co-Chair Stoltze interjected his concerns about the political perimeters and the monetary limits of the bill. He indicated that he would like to see a committee substitute to answer the questions rather than deal with the questions on the floor. Representative Doogan revealed he was not trying to block the bill, but would prefer more parameters. The fiscal notes are not telling the committee anything. 10:06:27 AM Vice-chair Fairclough revealed a letter of support from the local Teamsters 959 indicating that there could many trade organizations that might want to move the message forward concerning ANWR. A limit or an amount was needed so there would be a real number to evaluate. She wondered if the campaign would qualify for a film tax credit. She voiced her concern of an outside organization crafting the ANWR message. She again mentioned the Arctic Power organization was a very small office, but the state was receiving a lot for the money invested. She stated though that it was hard for one person to reach all the powers in Washington with the message. Arctic Power has been trying to get factual information out to the public, but some in the organization may not know enough. There needs to be a consistency in the message. She suggested that maybe Arctic Power was targeting those who already support ANWR development, instead of targeting those who are opposed. She indicated her support for an advertising campaign, but suggested it be a consolidated effort with the Arctic Power board. She reported that 41 U.S. senators voted for development of ANWR and it was a prime time to advertise for arctic development. 10:13:09 AM Representative Edgmon indicated he would be supporting the bill, but was skeptical on what it will produce. He believed it would take a broad scale message. Alaska is viewed nationally as the last frontier so he is dubious on what will be achieved. He also indicated some technical questions. Co-Chair Stoltze asserted that Alaska is not in a good position just having the oil industry is the spokesmen. The state needs to speak as a state policy issue. HE would prefer Alaskans to speak with their own voice. HB 358 was HEARD and HELD in committee for further consideration.