Legislature(2015 - 2016)HOUSE FINANCE 519
04/15/2016 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB101 | |
| HB339 | |
| SB69 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 101 | TELECONFERENCED | |
| + | HB 339 | TELECONFERENCED | |
| + | SB 69 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 101(FIN)
"An Act relating to merchandise sold and certain fees
charged or collected by the Department of Natural
Resources."
8:40:06 AM
ED FOGELS, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, relayed that the bill was extremely important to
the department and the state. Alaska's state park system
was the largest in the nation; it had evolved into a lean
and efficient machine. The Department of Natural Resources
(DNR) was trying hard to reduce the amount of General Funds
required to run state parks and believed they had developed
a strategy to completely get the state park system off of
general funds in the near future. He detailed that the bill
represented a key piece of the department's strategy.
BEN ELLIS, DIRECTOR, DIVISION OF PARKS AND OUTDOOR
RECREATION, DEPARTMENT OF NATURAL RESOURCES, discussed that
the bill would enable the Division of Parks and Outdoor
Recreation to sell state park themed merchandise in a
manner that ensured a reasonable monetary return to the
state to help support state park operations, which would
thereby potentially reduce the division's reliance on
General Funds. He communicated that the bill contained two
parts. First, the current statute specified that the
department could collect fees in a "park unit." He detailed
that at present, DNR collected fees online for public use
cabin reservations, annual parking and boat launch passes
at public information centers; there were also other areas
where funds were received that were not in a park unit. The
bill would remove the park unit language. He specified that
the Department of Law (DOL) had looked at the issue. He
elaborated that the department was not in danger of losing
the funds collected outside of a park unit, but the idea
was to clarify the language. He characterized the change as
a housekeeping measure. The second and more important part
of the bill gave DNR another tool in its effort to reduce
dependency on Undesignated General Funds (UGF) that
supported the division.
Mr. Ellis explained that in FY 15 the division had been
allocated $3.5 million in UGF and the division had brought
in $3.3 million in program receipts. The division's
operational budget was a little over $7 million. The
department had taken the steps through the legislation to
try to close the gap. He explained that the division had
increased its program receipts; previously about 31 percent
of its operating expenses came from permits. The number had
increased to 40 percent with a target in the 50 percent
range by the beginning of next year. The division had
looked at park units where the state had not charged fees
and had taken steps to change that. For example, the
division had installed collection stations with restrooms
on Kodiak; it had anticipated bringing in $20,000 as a
result, but it had already reached that amount before the
summer season had begun. He elaborated that Kodiak had been
very supportive of the fee increase to support the parks,
which comported with the overall statewide sentiment. The
division had also reduced its spending by 18 percent in
order to operate without UGF. The bill would enable the
division to maintain park services, reduce dependency on
UGF, and provide a way to support the largest state park
system in the nation.
8:45:32 AM
Mr. Ellis relayed that the idea had come about 4.5 years
earlier when there had been a photo contest as part of the
40th anniversary of Alaska's state parks. He detailed that
the idea had come to create blank notecards with some of
the photos and park information to sell for a profit. The
division had been told it could only sell the item at cost.
He showed the committee a park hat that was given to
advisory board members, but could not be sold. Currently,
the only source for park merchandise was an online retailer
based in Seattle. For example, if a person wanted an Eagle
Beach Alaska State Park sweatshirt they could buy it online
for $40; the state and the division received zero percent
of the profits. The bill would enable people purchasing the
merchandise to support their state parks and to know that
the profit was going back into their state parks. He
relayed that at least six other states had mature park
merchandise programs that generated $1 million or more in
profits for their park systems.
8:47:38 AM
Co-Chair Neuman asked if the division had the ability to
work with commissions. He stated that the Mat-Su visitor's
center and others worked on commission sales where items
could be sold.
Mr. Ellis answered in the affirmative. He detailed that the
bill was broad and specified that it was the division's
responsibility to seek a desirable and appropriate return
on investment, which could occur through a number of
venues. The program would have a strong wholesale component
where a product would be sold to retail stores. The concept
had been put forward by Princess, specifically related to
its lodge at the Denali National Park near the new Kesugi
campground. The division would love to have products to
sell at the lodge, which would make a small profit for the
state and the retailers.
Co-Chair Neuman looked forward to the bill becoming law so
he could purchase a hat.
Representative Gattis asked if there was a preference given
to Alaska businesses when retail items were purchased. She
realized the state was going to try to make a profit and
that the money went back in [to DNR's budget]. She referred
to Mr. Ellis's testimony that currently the products could
only be purchased out of state. She believed there could be
a win-win situation [for the state and its businesses].
Mr. Ellis answered that the bill did address the issue; it
included language that to the extent practicable several
things would occur. First, the products would be made in
the United States. He noted that currently products were
primarily made outside of the U.S. Second, there was an
Alaska bidder preference and the ability to look into the
state's correctional facilities to determine if they had an
opportunity to create a product.
8:50:33 AM
Mr. Ellis continued to provide an explanation of the bill.
He explained that there were states making between $1
million and $4 million in annual profit on the sales of
merchandise (the programs had been in operation between 8
and 10 years in those states). However, he clarified that
if implemented, the program would not bring in that kind of
revenue immediately; it would be necessary to take very
small steps to slowly grow the program. He explained that
the bill had a zero fiscal note and the division would have
to find the ability within its current means to make the
program work. He communicated that states with the most
successful programs had product at all of their state park
areas. The program in Alaska would probably focus initially
on some of the state's most heavily used areas that were
closest to the largest population centers. The department
intended to grow the program over a 5 to 8-year period. He
relayed that the New Hampshire program had earned in the $1
million per year range. He cited the program's deputy
director as saying "We are fairly passionate about our
retail operations here in New Hampshire state parks. When
you change the dialogue from cost control to revenue growth
opportunities all of a sudden new doors open, employees
attitudes shift, and we build a broader customer base of
support, loyalty, and advocacy for our state parks system."
Representative Munoz asked if the division would work with
a wholesale distributor or if the state would act as the
wholesaler.
Mr. Ellis answered that the division had not yet looked at
those details, but it would in the future. The department
would also look at turning artwork generated by artisan
residents in the Rie Munoz-Dorothy Gruening Artist-in-
Residence Program into prints for resale.
Representative Munoz encouraged the division to work with a
wholesaler with a network of businesses instead of taking
the work on itself. She believed the work would be quite
cumbersome for the state to take on itself.
Mr. Ellis agreed.
Representative Munoz suggested working with a graphic
designer on creating a product line. She believed that
investing a little on the front end would create greater
success.
Mr. Ellis emphatically agreed. He acknowledged that the
division did not contain graphic artist or merchandise
sales experts; it would be looking to the private sector
for the expertise in order to develop a product that would
sell and that the state could be proud of.
8:53:55 AM
Co-Chair Neuman stated that a significant number of people
enjoyed state parks for photography. He noted that many
professional photographers had copyrights of their photos.
He wanted to ensure that there was nothing in the bill that
would infringe upon the right of individuals to take
professional photos.
Mr. Ellis replied that the bill would not impact
photographers. He relayed that in the photography contest
held by the division six years earlier, the photographers
had agreed to provide the division with copyright for their
particular submission. However, the bill would not impinge
upon the ability of professional photographers to take
pictures.
TED WELLMAN, PRESIDENT, KENAI RIVER SPECIAL MANAGEMENT AREA
ADVISORY BOARD, STERLING (via teleconference), testified in
support of the legislation. The advisory board was
concerned about ensuring adequate monies and funding for
parks in order to have appropriate enforcement and
maintenance of facilities. He shared that the Kenai River
was under "virtual assault" by increased use throughout the
system. The board was in favor of any legislation that
raised funds to allow state parks to more adequately
perform their job. The board believed the bill and
merchandizing was a nice and neat idea that would allow
people visiting the park to identify with the park. He
believed the products would be very popular. He relayed
that the advisory board had submitted a letter of support
in the past.
Co-Chair Thompson CLOSED public testimony.
Co-Chair Neuman addressed the zero fiscal note from DNR for
FY 17 through FY 22. He noted that the department had the
authority to collect fees at locations outside the park
unit and the bill would enable the division to collect
program receipts to allow for a profit to be made outside
the sale of merchandise.
Co-Chair Neuman MOVED to REPORT CSSB 101(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSSB 101(FIN) was REPORTED out of committee with a "do
pass" recommendation and with and one previously published
zero fiscal note: FN3 (DNR).
8:57:38 AM
AT EASE
8:59:45 AM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS SB 101 Summary of Changes.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 101 |
| CS SB 101 Transmittal Letter.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 101 |
| SB69 Sectional Analysis.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 69 |
| SB69 Sponsor Statement.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 69 |
| SB69 Summary of Changes ver A to ver S.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 69 |
| SB69 Supporting Documents.pdf |
HFIN 4/15/2016 8:30:00 AM |
SB 69 |
| HB 339 - Letter of Support - Alaska Association of Fire & Arson Investigators.pdf |
HFIN 4/15/2016 8:30:00 AM |
HB 339 |
| HB 339 - Letter of Support - Alaska Fire Chiefs Association.pdf |
HFIN 4/15/2016 8:30:00 AM |
HB 339 |
| HB 339 - Sponsor Statement.pdf |
HFIN 4/15/2016 8:30:00 AM |
HB 339 |