HOUSE BILL NO. 370 "An Act making appropriations for the operating and loan program expenses of state government and to capitalize funds; and providing for an effective date." PAUL FUHS, ACTING COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT discussed program receipts. He noted that three-fourths of the department's budget is comprised of program receipt authority. He noted that the 7 Subcommittee's proposed budget represents a 10 percent general fund reduction for the Department of Commerce and Economic Development. He estimated the reduction at $800.0 thousand dollars beyond the proposed House Majority cap. He observed that there has been a $5.5 million dollar reduction over FY 93. Representative Navarre MOVED to ADOPT AMENDMENT 1 (copy on file). Amendment 1 would reinstate $130.0 general fund dollars for the Alaska Film Office. Co-Chair MacLean OBJECTED. She maintained that the Division's staff can provided technical assistance to film companies. Representative Navarre maintained that every dollar invested in this component achieves a 93 to 1 return. A roll call vote was taken on the MOTION to adopt AMENDMENT 1. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLean, Larson The MOTION FAILED (5-6). Representative Navarre MOVED to ADOPT AMENDMENT 2 (copy on file). Amendment 2 would add $1.5 million general fund dollars for the Alaska Tourism Marketing Council. Co-Chair MacLean asserted that the Subcommittee's reduction of $3.0 million dollars is high. She MOVED to AMEND Amendment 2 to delete "$1.5" and insert "1.0" million dollars. She noted that provisions contained in the ominous bill are aimed at raising program receipts through program fees in the Department of Commerce and Economic Development. Discussion pursued regarding potential fee increases. Representative Martin OBJECTED to the motion to amend. A roll call vote was taken on the MOTION. IN FAVOR: Brown, Grussendorf, Hoffman, Navarre, Parnell, Therriault, Foster, Hanley, MacLean, Larson OPPOSED: Martin The MOTION PASSED (5-6). Representative Parnell MOVED to AMEND Amendment 2 to change the funding source from the General Fund to International Trade Offices. Co-Chair MacLean spoke against the amendment to the amendment. Commissioner Fuhs expressed opposition to the amendment to the amendment. He emphasized the importance of the International Trade Offices. He discussed funding for international offices through the Division of Tourism. 8 Representative Brown provided members with AMENDMENT 3 (copy on file). She discussed amendment 3 as it relates to amendment 2. She observed that amendment 3 would close the international trade offices in Japan, Korea and Taiwan. Representative Martin stressed the importance of international trade. Representative Grussendorf objected to the amendment to amendment 2, to change the funding source. Co-Chair MacLean detailed projects promoted by the international trade offices. Representative Brown referred to newspaper accounts that the Tokyo Office has stopped providing assistance to small businesses and is concentrating almost exclusively on natural gas marketing. Commissioner Fuhs disagreed with Representative Brown's assessment of the Tokyo office's promotion of Alaskan products and businesses. He detailed smaller projects supported by the international offices. He maintained that 95 percent of the work done by international offices is on behalf of smaller projects. A roll call vote was taken on the MOTION to add $1.0 million dollars to the Alaska Tourism Marketing Council and delete $696.0 thousand dollars from the Offices of International Trade. IN FAVOR: Therriault, Brown, Hoffman, Navarre, Parnell OPPOSED: Grussendorf, Foster, Hanley, Martin, Larson MacLean The MOTION FAILED (5-6). A roll call vote was taken on the MOTION to adopt AMENDMENT 2 as amended to $1.0 million dollars. IN FAVOR: Brown, Hoffman, Grussendorf, Navarre, MacLean OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, Larson The MOTION FAILED (5-6). Representative Brown MOVED to ADOPT AMENDMENT 3 (copy on file). Representative Martin OBJECTED. Representative Brown emphasized that funding of the International Trade component is a lower priority than the state's mandatory obligations. Co-Chair MacLean spoke against amendment 3. Commissioner Fuhs noted that the International Trade component was reduced 25 percent by the House Finance Subcommittee. 9 Representative Parnell MOVED to AMEND Amendment 3 to add an increment of $696.0 thousand dollars to the Alaska Tourism Council. Co-Chair MacLean OBJECTED. A roll call vote was taken on the MOTION. IN FAVOR: Therriault, Brown, Hoffman, Navarre, Parnell OPPOSED: Grussendorf, Foster, Hanley, Martin, Larson MacLean The MOTION FAILED (5-6). Representative Brown observed that amendment 3 would retain funding for the Anchorage International Trade Office. A roll call vote was taken on the MOTION to adopt AMENDMENT 3. IN FAVOR: Hanley, Hoffman, Navarre, Parnell, Therriault, Brown OPPOSED: Grussendorf, Martin, Foster, MacLean, Larson The MOTION PASSED (6-5). Representative Navarre MOVED to ADOPT AMENDMENT 4 (copy on file). He explained that amendment 4 would eliminate the $125.0 increment to the grants line for rural tourism and increase the Alaska Tourism Marketing Council by $125.0 thousand dollars. He observed that this was the only increment in the Department of Commerce and Economic Development. He noted emphasized that the Alaska Tourism Marking Council supports tourism statewide. Co-Chair MacLean OBJECTED. She noted that the Alaska Tourism Marketing Council does not have rural representation. (Tape Change, HFC 94-98, Side 1) Commissioner Fuhs expressed opposition to amendment 4. He explained the functions of the rural tourism grant. Representative Navarre WITHDREW AMENDMENT 4. Representative Brown MOVED to ADOPT AMENDMENT 5 (copy on file). She explained that amendment 5 would reduce personal services in AIDEA by $450.0 thousand dollars. The amendment would eliminate two of the four deputy director positions. She emphasized the need to prioritize the budget. She added that the $200.0 thousand dollar increment in the contractual line, for new feasibility studies on energy resources would also be deleted. 10 Commissioner Fuhs stressed that the deputy director positions represent specialized skills in finance and project development. He emphasized that the positions help to maintain a high credit rating. Discussion pursued in regards to the feasibility studies. A roll call vote was taken on the MOTION to adopt AMENDMENT 5. IN FAVOR: Therriault, Brown OPPOSED: Grussendorf, Hoffman, Navarre, Foster, Hanley, Martin, Parnell, MacLean, Larson The MOTION FAILED (2-9). HB 370 was HELD in Committee for further discussion.