Legislature(1995 - 1996)
02/09/1995 05:10 PM House WTR
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
JOINT HOUSE SPECIAL COMMITTEES ON
WORLD TRADE AND STATE/FEDERAL RELATIONS AND
INTERNATIONAL TRADE AND TROURISM
February 9, 1994
5:10 p.m.
WORLD TRADE AND STATE/FEDERAL RELATIONS MEMBERS PRESENT
Representative Ramona Barnes, Chairman
Representative Gail Phillips, Vice Chairman
Representative Bill Williams
Representative Eldon Mulder
Representative Gary Davis
Representative Jerry Mackie
Representative Gene Kubina
INTERNATIONAL TRADE AND TOURISM MEMBERS PRESENT
Representative Beverly Masek, Chairman
Representative Alan Austerman, Vice Chairman
Representative Jeannette James
Representative Irene Nicholia
Representative Caren Robinson
WORLD TRADE AND STATE/FEDERAL RELATIONS MEMBERS ABSENT
None
INTERNATIONAL TRADE AND TOURISM MEMBERS ABSENT
Representative Brian Porter
Representative Pete Kott
COMMITTEE CALENDAR
Department Overview from Willie Hensley, Commissioner-Designate,
Commerce and Economic Development.
WITNESS REGISTER
WILLIE HENSLEY, Commissioner-Designate
Department of Commerce and Economic Development
Post Office Box 110800
Juneau, Alaska 99811-0800
Telephone: 465-2500
POSITION STATEMENT: Gave overview of the Department of Commerce
and Economic Development
JOHN SIBERT, Executive Director
Alaska Science and Technology Foundation
4500 Diplomacy Drive, Suite 515
Anchorage, Alaska 99508-5918
Telephone: 272-4333
POSITION STATEMENT: Participated in overview of agency
ROBERT HARRIS, Director
Technology
Alaska Science and Technology Foundation
4500 Diplomacy Drive, Suite 515
Anchorage, Alaska 99508-5918
Telephone: 272-4333
POSITION STATEMENT: Participated in overview of office
LAURIE CUNNINGHAM, Acting Director
Office of International Trade and Development
Department of Commerce and Economic Development
3601 C Street, Suite 798
Anchorage, Alaska 99503-5934
Telephone: 561-5585
POSITION STATEMENT: Participated in overview of the Department
of Commerce and Economic Development
MARY PIGNALBERI, Director
Division of Tourism
Department of Commerce and Economic Development
Post Office Box 110801
9th Floor State Office Building
Juneau, Alaska 99811-0801
Telephone: 465-2012
POSITION STATEMENT: Gave overview of the Division of Tourism
ACTION NARRATIVE
TAPE 95-3, SIDE A
Number 000
The Joint Meeting of the House Special Committees on World Trade
and State/Federal Relations and International Trade and Tourism
was called to order by Chairman Ramona Barnes at 5:10 p.m.
Members present at the call to order were Representatives Barnes,
Mulder, Williams, Kubina, Mackie, Masek, Austerman, James,
Robinson and Nicholia. Members absent were Phillips, G. Davis,
Kott and Porter.
Number 007
WILLIE HENSLEY, Commissioner-Designate, Department of Commerce
and Economic Development, said he was pleased to come before the
joint committees. He introduced his staff and people within the
department.
REPRESENTATIVE G. DAVIS arrived at 5:14 p.m.
Number 047
COMMISSIONER HENSLEY stated that the international trading
activity is a very critical portion of Alaska's economic health.
In 1993, the total value of Alaska's overseas exports was $2.6
billion. A very high percentage of our non-oil products is
destined for overseas markets. The top exports include fish and
seafood which amounted to a billion-and-a-half dollars; timber
and forest products, $646 million; mineral, such as lead, zinc
and coal, $126 million. Our most important foreign markets in
terms of value are Japan with $1.9 billion, of which $1.4 billion
of that in fish and seafood products; South Korea with $230
million; Canada, $73.9 million; Taiwan $65 million; and China $58
million. They foresee great growth potential and some serious
threats to our existing markets. Commissioner Hensley cited the
export of Alaska products to Japan has declined by $180 million
between 1991 and 1993. It is partially attributed to the decline
in value in salmon in the Japanese market. The decline can also
be blamed partially on the rising markets of China and Taiwan.
COMMISSIONER HENSLEY said that we need to have people in state
government who are familiar with the laws and customs of these
countries who can help Alaska business persons connect with
potential customers. It also involves working with businesses to
develop product forms which meet the needs of our customers in
these markets as well as working with their governments to insure
we have a positive government-to-government relationship. These
markets offer opportunities for the sale of oil, gas, forest
products and seafood.
Number 127
COMMISSIONER HENSLEY briefly touched on the Office of
International Trade, saying that it presently operates in some
capacity in the foreign countries of Japan, Korea, Taiwan and
Russia. It has two distinct roles, as an industrial match-maker
and as an advocate.
COMMISSIONER HENSLEY conveyed that the tourism promotion programs
are managed by the Division of Tourism and Alaska Tourism
Marketing Council (ATMC). The ATMC folks are the generic
marketing of Alaska in the United States and Canada. The Tourism
Division manages the state's international tourism marketing
effort, highway tourism, local tourism development and operates
the state's film office. The office is largely responsible for
increased foreign visitors to Alaska from approximately 27,000 in
1986, to 65,000 in 1994. It has foreign contractors in Japan,
Germany, Australia and the United Kingdom.
COMMISSIONER HENSLEY said the Division of Economic Development
focuses on the domestic side of the Alaska-international trade
equation. The division works with Alaskans on the processing of
Alaska's natural resources and the production of goods and
services. Other state divisions and offices market these
products internationally. The division has close working
relations and expertise in mining, forest products and commercial
fishing industries. He then addressed the function of the Alaska
Seafood Marketing Institute (ASMI). It represents an excellent
working model of a state industry partnership. Almost all of its
funding is derived from federal grants or program receipts from
the seafood industry. They have a relatively small budget. In
FY 95, the unrestricted general fund budget for economic
development programs is about $11.5 million. ATMC gets about
$3.4 million and $1 million to ASMI.
Number 173
COMMISSIONER HENSLEY briefly described a new initiative being
discussed which includes performance-based budgeting;
streamlining services in a program called "Marketing Alaska".
REPRESENTATIVE GAIL PHILLIPS arrived at 5:20 p.m.
Number 200
COMMISSIONER HENSLEY pointed out that this is a cabinet-member
group, whose mission is to develop or coordinate the effort to
"market" Alaska. The state needs to assert itself as a
contributing member of a competitive global economy so that
investments in Alaska compete with projects around the globe. It
will be a program that develops as many of our industry sectors
as possible. For instance, in our film marketing effort, he sees
some real potential. We should develop Alaska as a research
place, because much of Arctic research is done in Antarctica,
Canada, and Colorado and there's an opportunity to promote as
well. It's envisioned to be a four year program.
Number 225
COMMISSIONER HENSLEY noted that part of the World Trade
Committee's responsibility is with federal/state relations. He
pointed out that when the department made its contacts with the
heads of ARCO, British Petroleum, Exxon and UNOCAL and talked
specifically about the oil export ban, interestingly enough, each
company had a different point of view. They also talked about
the Arctic National Wildlife Refuge to see that there is
responsible oil drilling there and they have potential in
renewing the Magnuson Act in working with our delegation in the
area of fisheries and they support the notion of Community
Development Quota (CDQ) Program, which provides capital in an
area of the state that is in real need.
Number 260
CHAIRMAN BARNES said this committee looks forward to having a
partnership with the commissioner and his department. Chairman
Barnes introduced John Sibert.
Number 270
JOHN SIBERT, Executive Director, Alaska Science and Technology
Foundation (ASTF), testified via teleconference from Anchorage,
that one of the problems they frequently run into is, that people
who come to them for funding, this belief that in the better
"mousetrap" or "a field of dreams", the idea that if we build it
they will come. He hopes they have learned that lesson. It's
very important to understand that in order to develop or
diversify an economy, one has to understand that economy.
Number 300
MR. SIBERT said it's very important to develop partnerships or
strategical alliances, not only between the people of Alaska and
those outside, but also partnerships within the state. For
example, ASFT has many fisheries projects. It's connecting
people who know how to use the technology. One of the problems
is the lack of cold storage to pack fish products in the frozen
North during the summer time in Kotzebue. They worked with the
Department of Energy and the Energy Authority. The technology
(ice maker) worked well and is now operating in the Gulf of
Alaska and Southeast.
REPRESENTATIVES MACKIE and KUBINA left at 5:25 p.m.
Number 360
MR. SIBERT mentioned that there is a great deal of federal
technology that needs to be developed in the state. He
introduced Mr. Robert Harris.
Number 399
ROBERT HARRIS, Director, Technology, ASTF, testified via
teleconference from Anchorage, stating that part of the effort
with the National Governor's Association is to give the state a
voice in what's happening in terms of design of federal programs,
how decisions are made on what to fund, and where the funding
goes. The ice-maker is a good example of something that was
created in a federal lab and would not have come to fruition if
it weren't for people talking on the state and federal levels.
Number 418
CHAIRMAN BARNES introduced Laura Cunningham.
LAURA CUNNINGHAM, Acting Director, International Trade and
Development, Department of Commerce and Economic Development,
stated that she was not prepared to address the committee.
CHAIRMAN BARNES asked Ms. Cunningham, if the division was in
"competition or in partnership" with the legislative branch of
government.
Ms. Cunningham answered "in partnership."
Number 435
CHAIRMAN BARNES quizzed Ms. Cunningham about how she felt if one
of Ms. Cunningham's employees called one of the heads of an oil
company and said that the governor would find it highly offensive
if that company were to invite a legislator to the Sakhalin
Islands, for example. She asked if she thought it would be
appropriate for her to ask anyone in a foreign country to have a
legislative delegation "watched" and reported on.
MS. CUNNINGHAM responded by saying absolutely not. They arrange
all work with the foreign government, the itinerary, and we make
sure that a delegation is taken care of from beginning to end.
We are a support agency.
Number 465
CHAIRMAN BARNES inquired about a seafood delegation from Taipei
that visited Southeast Alaska in the summer of 1994.
MS. CUNNINGHAM stated that we have three companies in Southeast
Alaska that are selling salmon to Taipei, as well as a company
from Bristol Bay that is selling. She said there is another
Alaska seafood delegation going out.
Number 474
REPRESENTATIVE PHILLIPS recalled her trip that she made with
Chairman Barnes in October of 1994, that was very productive, but
said that one of the greatest complaints they heard from the
president to the congressional delegation and from people in the
fish industry is that the ONLY fish product they received from
Alaska was "fishmeal" which was from Dutch Harbor. They are
crying, begging, pleading for salmon, crab or whatever we have
from our state. Representative Phillips found it very
distressing that since we have a direct flight to Taiwan and we
have one of the richest fish resources in the world, that the
only thing we ship to them is fishmeal. They told Representative
Phillips that Japanese brokers are "tying up" these products.
Number 495
MS. CUNNINGHAM said she would provide both committees with
details of our export and that we do have salmon and crab going
into that market and it's increasing every year. Most of the
salmon which goes to that region is Norwegian.
REPRESENTATIVE MACKIE returned to the meeting at 5:55 p.m.
CHAIRMAN BARNES echoed the feelings of Representative Phillips.
Chairman Barnes also understood that there is a large
conglomerate there that wanted to buy Alaskan coal.
COMMISSIONER HENSLEY remarked that his department felt an
obligation to look into Taiwan's demands for coal.
COMMISSIONER HENSLEY told of a trip to Seoul and mentioned that
it is an entirely different kind of environment to function in
contrast to American style of marketing.
REPRESENTATIVE PHILLIPS stated that she was totally shocked and
mortified that the President of Taiwan would have to be in a
position to beg Alaska to export seafood to their country.
Number 545
COMMISSIONER HENSLEY would like to see a trade delegation of
seafood producers go to Taipei within the year.
CHAIRMAN BARNES said that her and Representative Phillips also
met with Taiwan's National Petroleum Institute and they were very
interested helping to co-fund the building of a gas pipeline.
TAPE 95-3, SIDE B
Number 000
COMMISSIONER HENSLEY remarked that there should be a good
opportunity for the production of that gas.
CHAIRMAN BARNES said not only would they help fund building of
the line, but also would buy as much of the gas that Alaska
wanted to sell.
Number 019
MARY PIGNALBERI, Director, Division of Tourism, Department of
Commerce and Economic Development, handed out to committee
members an overview of the division. She said the film program
is alive and well. In the first month of this year, they had
three national television commercials filming in the state. We
have been successful in attracting a Canadian production company
to shoot a beer commercial.
REPRESENTATIVE BEVERLY MASEK wanted to know what kind of new
Alaskan programs were discussed in a trip to Germany.
Number 080
MS. PIGNALBERI will furnish that information, but said that it's
mostly trade shows, tour operators and travel agents.
REPRESENTATIVE MASEK mentioned that during a trade show to
Florida by the division, the focus was that of tour passages and
wanted to know if there were any other "messages" getting out to
the rest of the nation.
MS. PIGNALBERI said they try to promote the entire state as a
package.
Number 150
REPRESENTATIVE ALAN AUSTERMAN noted a concern he has heard that
these trade shows overemphasize these big "POWWOW" shows.
REPRESENTATIVE JERRY MACKIE was perplexed about the misperception
about how Alaska was seen, not only internationally, but in the
Lower 49 as well.
Number 209
REPRESENTATIVE PHILLIPS reflected that on her trip to Taiwan,
most of the people there understood Alaska to be much too cold
with ice and snow year round to travel to. We need to have all
the agencies pulling together in order for us to change the
world's perception. Representative Phillips wanted to know what
the division was doing to rectify a situation that would attract
more frequent and more countries to more direct air service in to
Alaska.
MS. PIGNALBERI said they have tried to work closely with the
Anchorage International Airport and with the Alaska Industrial
Economic Development Corporation (AIEDC). The division has been
working more in a support capacity.
Number 248
COMMISSIONER HENSLEY said the Anchorage International Airport
itself is responsible for its own marketing. The convention and
visitors bureaus have a function. The Anchorage bureau has a
plan to spend a substantial amount of money just in Taiwan.
REPRESENTATIVE PHILLIPS found it appalling that the Anchorage
International Airport to be one of the most uncomfortable, people
unfriendly international terminals that she had ever been in and
if we are going to be using that facility for attracting tourism,
we're going to have to do some major re-thinking about that
facility.
Number 280
REPRESENTATIVE MACKIE was irritated by the fact that a few years
ago our own State Department in the U.S. government issued a
travel warning advisory and they listed the ALCAN Highway as one
of the most dangerous places to be due to lack of facilities. He
hoped somehow they could become educated that it was not
primitive land anymore. Representative Mackie said it was ranked
up there with Iraq and other places as the worst spots to go and
that was definitely the wrong message to send. We should work
with the Department of Transportation and other agencies in how
to improve services. He also pointed out that the previous
Administration, it seemed was at odds with the visitor's industry
and he would like to see this adverse relationship between
agencies turn into a more positive one.
Number 309
MS. PIGNALBERI informed the committees that the department, along
with the U.S. Forest Service, was going to be hosting a two-day
conference at the end of March, a symposium on tourism on public
lands in which one of the purposes is to bring together all of
the federal and state land users, land owners, et cetera, to meet
with the providers of tourism products and try to resolve some of
the issues revolving around permits and other visitor functions
on state and federal land.
REPRESENTATIVE PHILLIPS took note that "ECO-tourism" is a growing
phenomenon in the Lower 48 and would like to know if it was
catching on in Alaska.
MS. PIGNALBERI said that they had already been doing that and had
been on the "cutting edge" before it became a buzzword.
COMMISSIONER HENSLEY referred back to a comment of Representative
Phillips about the level of ignorance concerning Alaska. It's
not only a national phenomenon, it's an international one. It's
still broad and deep. So when compounding that with a foreign
language, it amounts to a large barrier.
Number 330
CHAIRMAN BARNES addressed the fact that in spite of spending
hundreds and hundreds of millions of dollars to promote Alaska,
people still see us as a frozen iceberg.
COMMISSIONER HENSLEY countered by saying that globally, it is
very competitive and that other states spend a lot more
promotional money then we do. He pointed out that the
diminishing number of international stopovers is due in part to
better aircraft being able to make longer flights and not being
required to stop in Alaska. Commissioner Hensley said they are
working with an airline that proposes to stop in Anchorage.
Number 374
REPRESENTATIVE ELDON MULDER inquired about how Alaska ranks with
the other 49 states in terms of money spent on tourism.
MS. PIGNALBERI said that at one time we ranked in the top five
and now were somewhere around 15-16, maybe even lower, in the
country. We have dropped significantly. She added that the city
of Las Vegas alone has a $98 million marketing budget.
Number 390
REPRESENTATIVE JEANNETTE JAMES felt that it's not just spending
the money on promoting, but we have to have the facilities in
place and things for the visitors to do in order to attract more
of them. She cited the example of people that come to see Mt.
McKinley. It takes a "total" park experience in order for people
to spread the word about having a good time. We have to address
the expense side of the ledger when we talk about tourism.
REPRESENTATIVE AUSTERMAN commented that friends of his from
Kodiak who made a trip to California, had been told several times
that they don't eat salmon anymore because they are an endangered
species and this related directly back to the perception problem
of Alaska.
REPRESENTATIVE MACKIE cited a problem within the industry in
Alaska, using the example of advertisement in which a seiner
pulled in crabs with a net, and suggested that we take a hard
look at ourselves before we try to convince those abroad about
some of those things. He also said he would like to see
something more of a concerted effort in creativity.
Number 470
REPRESENTATIVE CAREN ROBINSON noted many people are coming to
Alaska and spending a tremendous amount of money to go Extreme
Skiing and skiing at lodges and taking helicopter rides. She
wondered what the state had been doing in terms of winter
marketing.
MS. PIGNALBERI said that's probably where the international
marketing comes into play. A lot of the appeal for the foreign
visitor is the winter season. The ATMC has fall, winter, spring
committee that addresses through the public relations contract
and has helped the Iditarod Race.
Number 480
REPRESENTATIVE ROBINSON felt that many people up north have never
been to the southern parts of Alaska and vice-versa. She asked
if the state was doing anything as far as "interstate promoting."
MS. PIGNALBERI said that since 1975, when the convention and
visitors bureaus and other regional marketing groups came on
board, the division has somewhat turned that end of the business
over to them to market their own regions. The focus of the
division now is really out of state.
CHAIRMAN BARNES announced that the next World Trade Committee
meeting will be held on Tuesday, February 14, 1995, at 5 p.m. in
Room 408. We will to hear HJR 12, HJR 22 and HJR 26.
ADJOURNMENT
There being no further business to come before the House Special
Committees on World Trade and State/Federal Relations and
International Trade and Tourism, CHAIRMAN BARNES adjourned the
meeting at 6:35 p.m.
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