Legislature(1999 - 2000)

04/13/1999 09:06 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
April 13, 1999                                                                                                                  
9:06 AM                                                                                                                         
SFC-99 #88, Sides A and                                                                                                         
CALL TO ORDER                                                                                                                   
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 9:06 A.M.                                                                                                         
In addition to Co-chair Torgerson, Senators Sean Parnell,                                                                       
Loren Leman, Gary Wilken, Al Adams, Pete Kelly and Lyda                                                                         
Green were present when the meeting was convened.  Senator                                                                      
Randy Phillips arrived shortly thereafter.                                                                                      
Also Attending:  SENATOR JERRY MACKIE; JOE BALASH, staff to                                                                     
Representative Gene Therriault; GINNY FAY, Legislative                                                                          
Liaison, Department of Commerce and Economic Development;                                                                       
KEN DOLE, Alaska Visitors Association; STEVE BEHNKE, Alaska                                                                     
Wilderness, Recreation and Tourism Association; aides to                                                                        
committee members and other members of the Legislature.                                                                         
Attending via Teleconference:  LISA VONBARGAN, Valdez;                                                                          
KATHY TARR, Kenai.                                                                                                              
SUMMARY INFORMATION                                                                                                             
Co-chair Torgerson called the meeting to order and said he                                                                      
would follow the order of the agenda.                                                                                           
 SENATE BILL NO. 107                                                                                                            
"An Act relating to tourism and tourism marketing;                                                                              
eliminating the Alaska Tourism Marketing Council; and                                                                           
providing for an effective date."                                                                                               
 CS FOR SENATE BILL NO. 107(L&C)                                                                                                
"An Act relating to tourism and tourism marketing;                                                                              
eliminating the Alaska Tourism Marketing Council; and                                                                           
providing for an effective date."                                                                                               
SENATOR JERRY MACKIE was invited to join the committee.  He                                                                     
explained the bill per his sponsor statement, which he read                                                                     
into the record.  He said a new CS had been discussed but a                                                                     
draft had not been prepared nor been presented to the                                                                           
committee.  According to the Senator, all marketing would                                                                       
be done under contract.  They have worked closely with                                                                          
Representative Gene Therriault regarding this bill.  It was                                                                     
his feeling that not only would ATMC go away but that there                                                                     
would be a reduction in personnel.  A draft of House fiscal                                                                     
notes had been prepared with the assistance of Rep.                                                                             
Therriault and he asked permission for Representative                                                                           
Therriault's staff to address them.                                                                                             
JOE BALASH, staff to Representative Therriault was invited                                                                      
to join the committee.  He explained the House fiscal                                                                           
Co-chair Torgerson asked if there had been a fiscal note                                                                        
from the department before the House made their own.  Mr.                                                                       
Balash indicated they did, but after some changes at the                                                                        
first committee of referral.  Co-chair Torgerson felt they                                                                      
were getting ahead of themselves in discussing the fiscal                                                                       
(Drafted house fiscal notes were distributed to the                                                                             
Senator Mackie noted that he had just received the fiscal                                                                       
note from the department.  Co-chair Torgerson advised that                                                                      
he had also only just received it.                                                                                              
Senator Leman asked for further explanation from Senator                                                                        
Mackie regarding the department fiscal note as compared to                                                                      
the draft from the House.                                                                                                       
Senator Mackie explained the reduction after FY 01 and that                                                                     
it would be reduced down to $4.7 million by the year FY 03.                                                                     
Senator Wilken asked where the $7 million came from.                                                                            
Senator Mackie said it was in this year's budget.   Senator                                                                     
Mackie said he had worked on these fiscal notes electively                                                                      
with Representative Therriault.  He asked the committee to                                                                      
consider these drafted House fiscal notes along with those                                                                      
from the department.                                                                                                            
Co-chair Torgerson said he would rather finish discussion                                                                       
on the bill at this time and not deal with the fiscal                                                                           
Senator Mackie asked for a Tourism Development FY 01                                                                            
spreadsheet to be distributed to the committee.                                                                                 
Co-chair Torgerson asked about section two of the bill.                                                                         
(There followed a brief pause on record.)  Senator Mackie                                                                       
then directed the committee to section ten of the bill.                                                                         
Co-chair Torgerson said that was the section dealing with                                                                       
the effective date of the bill.                                                                                                 
Unidentified individual in the audience directed the                                                                            
committee to section nine of the bill, page seven.                                                                              
Senator Leman asked why was not a gradual transition                                                                            
proposed instead of such a big step?  This would have                                                                           
helped in the budget.  Senator Mackie said this was a                                                                           
matter for the department and ATMC.  He did not really get                                                                      
into this matter.                                                                                                               
Co-chair Torgerson asked about the reduction for this year.                                                                     
Senator Mackie said it was about $300,000.                                                                                      
Senator Wilken asked about the spreadsheet and APLIC?                                                                           
Senator Mackie indicated the department could explain this                                                                      
matter.  The office is in Tok and a key component for RV's                                                                      
and others entering the State.  With reference to the                                                                           
spreadsheet, Senator Mackie said this had been prepared by                                                                      
Co-chair Torgerson asked about page three of the bill.                                                                          
Senator Mackie again indicated he would rather the                                                                              
department comment on this.  It is just another matter of                                                                       
check and balance to monitor the best use of the industry                                                                       
both private and public.                                                                                                        
GINNY FAY, Legislative Liaison, Department of Commerce and                                                                      
Economic Development was invited to join the committee.                                                                         
She spoke to the Labor and Commerce version of the bill.                                                                        
However, she advised the committee that Tam Cook, Legal                                                                         
Services had prepared a new CS draft containing clean-up                                                                        
measures in it.  There is still a lot of work to be done                                                                        
during the next transition year and they will have to work                                                                      
diligently on this bill.  She explained the department's                                                                        
two fiscal notes for ATMC and Tourism Development.  The                                                                         
premise they worked on for FY 01 and beyond is that they                                                                        
have transferred their personal services to the new trade                                                                       
association under their contractual line.  Personal                                                                             
services were reduced.  From there, they took the                                                                               
activities of ATMC and delegated them to contracts.  The                                                                        
division will have the contractual oversight that ATMC now                                                                      
has.  This transition should occur in FY 01.  She explained                                                                     
that some duties will be shuffled and some may be                                                                               
diminished.  The difference in their two fiscal notes is                                                                        
approximately $200,000, which was cut out.  However, the                                                                        
department feels this funding is necessary.                                                                                     
Co-chair Torgerson told Ms. Fay that he felt her testimony                                                                      
was contradictory to the testimony of the sponsor.  He                                                                          
asked if some of this money was to fund the Tok Visitor                                                                         
Center.  Ms. Fay said she did not have all the figures in                                                                       
front of her.  She said there would be eleven positions                                                                         
total, with four of them at the Tok Visitor Center.  Co-                                                                        
chair Torgerson asked her to review carefully the Tourism                                                                       
Development spreadsheet handed out by Senator Mackie.  He                                                                       
asked her to explain "fixed costs".  He then said he was                                                                        
not going to get into this matter any further.  There is a                                                                      
contradiction between costs and positions.  Further                                                                             
discussion will have to take place with the sponsor.                                                                            
Ms. Fay said the discussion has been primarily focused on                                                                       
tourism.  However, there have been for instance, meetings                                                                       
with ambassadors, work at the national park services, and                                                                       
some other activities that have had nothing to do with                                                                          
tourism marketing.  In addition, money from the Federal                                                                         
Department of Commerce has been received to help look at                                                                        
developing small business and tourism opportunities in                                                                          
rural Alaska.  She further referred briefly to the draft                                                                        
fiscal note from the House and felt that all duties and                                                                         
functions have not been addressed.   In response to Co-                                                                         
chair Torgerson she said it was her understanding that                                                                          
there would still be some positions left in ATMC.  The                                                                          
fiscal note she presented this morning was only for the                                                                         
Division of Tourism.                                                                                                            
Co-chair Torgerson again reiterated that there was work                                                                         
that needed to be done on this bill.                                                                                            
Senator Wilken called attention to the spreadsheet.  He                                                                         
assumed these were loaded costs.  Ms. Fay said she did not                                                                      
prepare the spreadsheet.  She will have to consult with the                                                                     
sponsor who prepared the sheet.  Senator Wilken asked about                                                                     
the nine employees.  He felt the spreadsheet was "top                                                                           
JOE BALASH, staff to Representative Therriault was invited                                                                      
to rejoin the committee.  He was asked to explain the                                                                           
"research" and "fixed costs" on the spreadsheet.  He                                                                            
explained that it included rent at the Tok Visitor Center,                                                                      
telephone and communication costs costs to the                                                                                  
commissioner's office among others.  He also included a                                                                         
conversion study being conducted by ATMC.  Co-chair                                                                             
Torgerson asked him to explain "grants".  Ms. Fay                                                                               
interrupted saying this concerned the World Tourism Center.                                                                     
Mr. Balash asked that a Division of Tourism spreadsheet                                                                         
also be passed out to the committee.                                                                                            
Senator Green asked what was the field of the positions.                                                                        
Ms. Fay said they dealt strictly with tourism.                                                                                  
Co-chair Torgerson asked for a clarification of the "clean-                                                                     
up" language.  Senator Mackie responded that Tam Cook was                                                                       
doing the clean up of the Labor and Commerce version of the                                                                     
bill.  He said they were trying to deal with the House on                                                                       
this matter.  Senator Mackie also referred to the nine                                                                          
positions; Ms. Fay said they were trying to keep the                                                                            
positions at eleven, of which three would be part-time.                                                                         
Ms. Fay further explained the Tourism Development spread                                                                        
sheet and said it should also have included "Marketing".                                                                        
Senator Wilken asked her to identify the positions listed.                                                                      
Due to poor copies of the Division of Tourism spread sheet                                                                      
she was unable to identify where these fell on the sheet.                                                                       
Senator Phillips asked what range the Development                                                                               
Specialist I was?  Ms. Fay said it was either range 13 or                                                                       
18 as it was difficult to read.                                                                                                 
Senator Green inquired about what standards the State was                                                                       
held to regarding monies held for the Division of Tourism                                                                       
bids.  Ms. Fay said section three was the applicable                                                                            
(Tape number 88 switched to Side B at log number 595.)                                                                          
Senator Mackie continued his comments to the committee                                                                          
regarding marketing contracts.  There were plenty of                                                                            
reasons for everyone to come to an agreement so money was                                                                       
not lost.                                                                                                                       
Senator Green wondered if the department needed a fall back                                                                     
if something happened or if everything fell apart?  Senator                                                                     
Mackie responded.  There was plenty of incentive to get                                                                         
this going because they would be cut from the budget                                                                            
Senator Green asked if there was a provision to prevent the                                                                     
ATMC to say they were not going to do anything during a                                                                         
particular year.  Ms. Fay explained and said they would be                                                                      
forced to take care of marketing matters in house, which                                                                        
they do not do at this time.  She referred the committee to                                                                     
section seven in response to a question from Co-chair                                                                           
Torgerson.  He also pointed out section six, and she said                                                                       
there was an exception provided for under AS 44.33.125(h).                                                                      
Co-chair Torgerson asked if ATMC was in agreement with the                                                                      
right of refusal.  Ms. Fay explained that they would always                                                                     
put time lines on proposals.  In order to set up contracts                                                                      
there would be time requirements for all parties involved.                                                                      
He further referred to subsection (b) of section seven,                                                                         
right of refusal.  They would have to wait a long time for                                                                      
legislative approval and that might not be acceptable, Ms.                                                                      
Fay explained.  She said there were things they could not                                                                       
do even if asked by the Governor or Legislature.  Co-chair                                                                      
Torgerson felt that "unless authorized by the Legislature"                                                                      
should be included language.                                                                                                    
Co-chair Torgerson continued on to page five, lines ten and                                                                     
eleven.  He asked clarification of this language.  Ms. Fay                                                                      
responded that the intent of this section was that they                                                                         
wanted to address situations that would cause them concern.                                                                     
She used as an example the M/V Malaspina.  They received an                                                                     
emergency appropriation from the Department of                                                                                  
Transportation to do marketing, covering this matter.  Co-                                                                      
chair Torgerson said he did not disagree with her comments                                                                      
but felt that was not what the language he cited above                                                                          
referred to.  Senator Mackie said he thought the language                                                                       
was correct and covered what they wanted.  Co-chair                                                                             
Torgerson said he would work out more complete clarifying                                                                       
language.  Ms. Fay referred the committee to lines nine                                                                         
through eleven.  This language provided the flexibility for                                                                     
matching funds.  Co-chair Torgerson said it was too                                                                             
flexible.  He continued on to page six, line six.  He said                                                                      
it was his understanding that materials also included logo.                                                                     
If a new logo were to be designed for the State and then                                                                        
the organization ceased to exist would the State still be                                                                       
able to use the logo?  Ms. Fay explained that she did not                                                                       
envision using contractual services for such a matter.  Co-                                                                     
chair Torgerson felt it needed to be further clarified                                                                          
Ms. Fay said the language reflected SB 350 of last year.                                                                        
Senator Mackie concurred that it was the same language of                                                                       
SB 350 last year.                                                                                                               
Co-chair Torgerson thanked Senator Mackie, Ms. Fay and Mr.                                                                      
Balash for assisting the committee.  Senator Mackie said he                                                                     
hoped all remaining work on the bill could be finished in                                                                       
this committee.                                                                                                                 
KEN DOLE, Alaska Visitors Association was invited to join                                                                       
the committee.  He said he was available to answer any                                                                          
questions the committee may have.  He said they reached                                                                         
agreement with the Administration regarding matching funds.                                                                     
STEVE BEHNKE, Alaska Wilderness, Recreation and Tourism                                                                         
Association was invited to join the committee.  He                                                                              
explained his representation of small tourism                                                                                   
organizations.  They would be concerned with any cuts to                                                                        
the Division of Tourism.  They were also concerned about                                                                        
over all levels of funding for tourism as this affects                                                                          
directly the smaller organizations in relationship to world                                                                     
tourism.  They are losing out around the world.  The                                                                            
current levels of funding are too low and they do not feel                                                                      
that they can survive with any more cuts.                                                                                       
LISA VONBARGAN testified via teleconference from Valdez.                                                                        
She said there was a need to impress on everyone the fact                                                                       
of funding being diminished gradually.  There was a great                                                                       
concern about where funding would come from to support the                                                                      
outlined activities.  The role of the Division of Tourism                                                                       
was important in helping to advocate the smaller                                                                                
organizations.  She emphasized that it was necessary to                                                                         
have the continued support and advocacy of ATMC.                                                                                
KATHY TARR testified via teleconference from Kenai.  She                                                                        
noted her appreciation of the work by the Senate Finance                                                                        
Committee on this bill.  She felt that the questions raised                                                                     
by the committee would eventually be answered.  She also                                                                        
supported consolidation and the new millenium plan.  SB 107                                                                     
put the mechanism in place for development of the marketing                                                                     
Co-chair Torgerson SET ASIDE SB 107 and said he would work                                                                      
with the sponsor for a new CS.  He requested amendments be                                                                      
submitted to his office to be included in the new CS.                                                                           
Co-chair Torgerson took a brief at ease at 10:21 a.m. and                                                                       
reconvened the committee at 10:30 a.m.  He called SB 52.                                                                        
 SENATE BILL NO. 52                                                                                                             
"An Act relating to competition in the provision of                                                                             
local exchange telephone service; and providing for an                                                                          
effective date."                                                                                                                
 CS FOR SENATE BILL NO. 52(L&C)                                                                                                 
"An Act relating to competition in the provision of                                                                             
local exchange telephone service; and providing for an                                                                          
effective date."                                                                                                                
Senator Green MOVED Amendment #1.  There was objection.                                                                         
Senator Green explained her amendment.  She said there was                                                                      
concern regarding the quantity and quality of service.                                                                          
Senator P. Kelly indicated that his proposed amendment may                                                                      
address some of Senator Green's concerns.  They are not                                                                         
Senator Adams asked to hear the difference between the two                                                                      
amendments.  Co-chair Torgerson said page two, line twenty-                                                                     
six was the only difference.  Senator Adams said it was                                                                         
important that the difference be clarified.  Senator P.                                                                         
Kelly referred the committee to page two, line nine.                                                                            
Senator Green and Senator Kelly had a brief discussion.                                                                         
"One cannot come in and cherry-pick under this bill," said                                                                      
Senator P. Kelly.  "The entire area must be provided                                                                            
Senator Leman asked if an amendment to amendment #1 could                                                                       
be made on line 10 of deleting "shall" and inserting "may"?                                                                     
Senator Green advised the committee of this suggested                                                                           
change by Senator Leman.  Senator Phillips briefly                                                                              
commented.  He said that areas were different around the                                                                        
Senator Adams commented re the suggested language change by                                                                     
Senator Leman.  Senator Leman clarified his suggested                                                                           
Senator Green requested a brief at ease.  Co-chair                                                                              
Torgerson granted the request at approximately 10:45 a.m.                                                                       
Co-chair Torgerson reconvened the meeting.                                                                                      
Senator Kelly retained his objection.                                                                                           
Senator Green MOVED amendment to amendment #1 which would                                                                       
delete "shall" and insert "may" on line ten.  WITHOUT                                                                           
OBJECTION it was ADOPTED.                                                                                                       
Senator Kelly advised however, that he still maintained his                                                                     
objection to amendment #1.  By a roll call vote of 4 yeas                                                                       
(Torgerson, Adams, Green, Phillips) and 5 nays (Parnell,                                                                        
Donley, Leman, Wilken, P. Kelly) amendment #1 FAILED.                                                                           
Senator Kelly MOVED amendment #2.  Co-chair Torgerson                                                                           
OJBECTED.  Senator Kelly explained his amendment.  Senator                                                                      
Adams asked for an explanation of line eight, page one of                                                                       
amendment #2.  Senator Kelly responded.  Senator Wilken                                                                         
questioned the two year date and why people would be more                                                                       
comfortable with this rather than four or six years.                                                                            
Senator Kelly commented.  In actuality, the level of                                                                            
comfort will be for the utilities and perhaps not much of a                                                                     
comfort for the public.                                                                                                         
By a roll call vote of 6 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Wilken, P. Kelly) and 3 nays (Adams, Green,                                                                              
Phillips) amendment #2 was ADOPTED.                                                                                             
(Tape #88, Side B was switched to Tape #89, Side A.)                                                                            
Senator P. Kelly commented again briefly on the bill.                                                                           
Senator Adams asked if APUC was on teleconference as there                                                                      
were some questions he wanted to ask.  Co-chair Torgerson                                                                       
said they were not.  Senator Adams said he opposed the bill                                                                     
but needed the answers as to what the position of APUC was                                                                      
regarding this bill.  Specifically, he wanted to know what                                                                      
APUC felt about the telephone rates, and what was the                                                                           
effect of the bill regardless of where one lived in Alaska.                                                                     
Senator P. Kelly said APUC has been neutral on this bill.                                                                       
It is believed the competition will provide better service                                                                      
and lower rates.  Senator Adams said it should not matter                                                                       
where one lived.  The same rates and services should be                                                                         
provided for all.  Co-chair Torgerson concurred.                                                                                
Senator Kelly MOVED CSSB 52(FIN).  Senator Adams objected.                                                                      
Senator Green also voiced her frustrations and reliance on                                                                      
By a roll call vote of 6 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Wilken, P. Kelly) and 3 nays (Adams, Green,                                                                              
Phillips) CSSB 52(FIN) was REPORTED OUT with individual                                                                         
recommendations.  New fiscal notes will be forthcoming from                                                                     
the Department of Commerce.                                                                                                     
Co-chair Torgerson reviewed the agenda for tomorrow                                                                             
regarding the Operating Budget.  Senator Adams asked for                                                                        
the schedule for amendments.  Senator Parnell said he hoped                                                                     
to have all amendments in his office by 5:00 p.m. on                                                                            
Co-chair Torgerson adjourned the meeting at approximately                                                                       
11:05 A.M.                                                                                                                      
SFC-99 (1) 04/13/99                                                                                                             

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