HOUSE FINANCE COMMITTEE April 13, 1994 8:30 A.M. TAPE HFC 94 - 122, Side 2, #000 - end. TAPE HFC 94 - 123, Side 1, #000 - #671. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Foster Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Navarre was not present for the meeting. ALSO PRESENT Representative Pete Kott; Joe Swanson, Director, Division of Elections, Office of the Lieutenant Governor; Jeannie Larson, Staff, Representative Terry Martin; Jay Dulany, (Testified via teleconference), Director, Division of Motor Vehicles, Department of Public Safety; Ron King, Project Manager, Mobil Sources, Department of Environmental Conservation; Paul Fuhs, Commissioner, Department of Commerce and Economic Development; Brad Phillips, Alaska Tourism Marketing Council (ATMC), Anchorage; Tina Lindgren, (ATMC), Anchorage; John Binkley, Representing Self, Fairbanks. SUMMARY HB 47 An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or more primary ballots must be provided to the public. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HB 328 An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date. 1 HB 328 was placed into Subcommittee with Representative Martin as Chair and held for further consideration. HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. HB 342 was HELD in Committee for further consideration. HOUSE BILL 47 "An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or more primary ballots must be provided to the public." Representative Martin noted that HB 47 had been drafted following the 1992 Primary Election in which an absentee ballot applicant had not indicated a ballot preference. Through this legislation, the absentee voter would receive the appropriate primary election ballot, as determined by their political affiliation on record. The legislation would create a 30 day limitation on party affiliation changes to facilitate the election process. JOE SWANSON, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF THE LIEUTENANT GOVERNOR, commented that the fiscal note had been zeroed out. Representative Brown noted her preference of an "open" primary and asked the legal options for that choice. Mr. Swanson advised it would not be optional due to a mandate by the Supreme Court. Currently there are regulations in effect which are based on that court order and which are not in statute. The proposed legislation clarifies regulations. Co-Chair Larson asked if the bill would change the court ruling which would specify that each party make individual determinations whether to open or close the primary. Representative Brown asked if Section #6, Page 5, would annul a regulation. Mr. Swanson replied that Section #6 would provide a cost savings measure and would automatically take the regulations off of the books. Discussion followed between Committee members and Mr. Swanson regarding the open and primary ballot systems. Representative Brown MOVED to amend Page 4, Line 16 and Line 17, deleting "statutory" and inserting "open". 2 Representative Therriault OBJECTED. Representative Parnell stated that the language would be too broad and a mischaracterization of the intention. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Brown, Foster, Grussendorf, Larson. OPPOSED: Martin, Parnell, Therriault, Hanley. Representative Navarre and MacLean were not present for the vote. The MOTION PASSED (5-4). Representative Hanley MOVED to report CS HB 47 (FIN) out of Committee with individual recommendations and with a zero fiscal note. There being NO OBJECTION, it was so ordered. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HOUSE BILL 328 "An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date." Representative Martin noted that the proposed legislation would establish a biennial motor vehicle registration effective January 1, 1995. The fees for biennial registration would be reduced to one and one-half times the current one year rate and would result in an annual savings to motor vehicle owners of $4.6 million dollars. The legislation would also reduce the Division of Motor Vehicle's (DMV) workload by 10% annually, significantly reducing the rate of new hires. JAY DULANY, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, testified that the Department of Public Safety supports the concept of the legislation, however, indicated concern with the potential loss in revenue. JEANNE LARSON, STAFF, REPRESENTATIVE TERRY MARTIN, explained that in establishing the biennial registration, there would be annual inspections for vehicle emissions in order to comply with the federal clean air act. RON KING, PROJECT MANAGER, MOBIL SOURCES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, expounded that the legislation 3 would provide three proposals. Option #1 would employee a sticker program utilizing on street enforcement. Option #2 would become available if statute changes had not been enforced, including more staff, adding penalties under the existing statutes. Option #3 would alter the existing programs, returning to the Anchorage and Fairbanks communities and pursuing options which had previously been excluded. Mr. King indicated that Option #1 would be the least costly to the State. He noted that DEC maintains a neutral position on the bill. Representative Brown asked the changes necessary to implement Option #1. Mr. King stated that a violation or bailable offense would need to be established by statute and would create a fine for operation without the required window sticker. The second change would clarify whether the revocation of registration would be possible. Ms. Larson noted that all fees charged result from program receipts. Representative Brown inquired how the annual emission test would be enacted. Mr. King stated that Option #1 would establish a system in which a sticker would be required on the vehicle in addition to the registration enforcement date. Co-Chair Larson placed HB 328 into Subcommittee with Representative Martin as Chair. 1. Provide for a biennial license. 2. Address concerns of the emission testing. 3. Do away with any changes that would effect vehicle registration fees. HB 328 was HELD in Committee for further consideration. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." REPRESENTATIVE PETE KOTT noted that HB 342 would extend the life of the Alaska Tourism Marketing Council (ATMC) to December 30, 1998. He added that the legislation would conform to the recommendations of the 1993 Budget and Audit report. ATMC falls under the Department of Commerce and Economic Development (DEC), Division of Tourism. ATMC contributes a substantial amount to the State by providing over $52 million dollars each year. 4 Co-Chair MacLean provided the Committee with a work draft Revenues to the State of Alaska Generated by the Visitor Industry". [Copy on file]. She noted that the committee substitute for HB 342 proposed an increase to the industry contribution inline with what the Governor intended in the proposed operating budget. The committee substitute would also increase the minimum industry contribution in statute from 15% to 38% for FY95. Thereafter, there would be a graduation of the industry contribution structured in the bill. Co-Chair MacLean added that ATMC would need increased program receipt authority to accommodate the increases in industry contribution. The draft would not allow for the industry contribution to be in-kind. (Tape Change, HFC 94-123, Side 1). Co-Chair MacLean MOVED to adopt the committee substitute as the version before the Committee. Representative Parnell OBJECTED stressing the damage the harsh measures would inflict to small tour operators by increasing the contributing to 50%. Co-Chair MacLean replied that the small tour operators had agreed to pay a dedicated fund. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, pointed out that if the Alaska Visitor's Association (AVA) was not able to meet the match, the law states that the decision of action should be made by the Commissioner of Commerce, the Director of the Division of Tourism and another commissioner designated by the Governor. He added that a marketing program would continue to exist although it would not be provided by AMTC and if that should happen, an advisory committee would be established. Commissioner Fuhs stated his support for the extension of the Alaska Tourism Marketing Council. The Governor has requested a more substantial match. He noted that ASMI currently provides 85% of their funding source. ATMC contributes a 15% match which the Department thinks is too low. Representative Kott remarked that the in-kind contribution should be considered as an essential element provided by tourism pointing out that last year $5 million dollars has made available. BRAD PHILLIPS, ALASKA TOURISM MARKETING COUNCIL (ATMC), ANCHORAGE, discussed the in-kind contributions. He added 5 that he was discouraged by the impact which the work draft submitted by Representative MacLean would make on small Alaskan operators. He indicated that ATMC has two sources of revenue: 1. Sales of ads. 2. Sale of the mailing list. Mr. Phillips explained that people do not realize the economic contribution made to the State as a result of tourism. This enterprise covers multiple processes and hires over twenty thousand people in the State. He urged the Committee to create a mechanism which would guarantee that money raised by AMTC be used for tourism marketing rather than placed into the general fund. Mr. Phillips noted that the group has not been opposed to a broad base tax in order to provide revenues but asks that those funds be used for tourism marketing only. Discussion followed among Committee members and Mr. Phillips regarding the delegation of taxing power and the need to create a constitutional amendment for a dedicated fund. JOHN BINKLEY, REPRESENTING SELF, FAIRBANKS, explained that the Alaska Tourism Council would like to have the same status as ASMI by paying for half their share and providing for the same mechanism to generate funds. He added that ASMI has the power of taxation and has the authority to veto any tax which the legislature implements. ATMC is requesting that the same authorization of assessment be made available. He pointed out that the tourism industry relies on marketing and they are willing to participate in a joint marketing program. The tourism commodity would be difficult to tax. Consequently, ATMC requests that the constitutional amendment be considered for implementation of tourism marketing for Alaska. Co-Chair MacLean remarked that three taxes have been suggested to the tourism council although not well received: 1. Bed tax; 2. Crew ship head tax; and 3. Motor vehicle rental tax. Mr. Binkley reiterated that the tourism industry wants to guarantee that the funds generated from the taxes be returned to marketing. Representative Brown recommended enacting taxes on a two year basis in order to fund the programs for a short period of time while further work is done in consideration of the 6 constitutional amendment. She observed that the function of the State and the joint partnership in tourism is well exampled by the public-private partnership. HB 342 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 10:10 A.M. HOUSE FINANCE COMMITTEE April 13, 1994 8:30 A.M. TAPE HFC 94 - 122, Side 2, #000 - end. TAPE HFC 94 - 123, Side 1, #000 - #671. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Foster Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Navarre was not present for the meeting. ALSO PRESENT Representative Pete Kott; Joe Swanson, Director, Division of Elections, Office of the Lieutenant Governor; Jeannie Larson, Staff, Representative Terry Martin; Jay Dulany, (Testified v***FIN103AM 0AAHFIN 0413940830 HOUSE FINANCE COMMITTEE April 13, 1994 8:30 A.M. TAPE HFC 94 - 122, Side 2, #000 - end. TAPE HFC 94 - 123, Side 1, #000 - #671. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Foster Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Navarre was not present for the meeting. ALSO PRESENT Representative Pete Kott; Joe Swanson, Director, Division of Elections, Office of the Lieutenant Governor; Jeannie Larson, Staff, Representative Terry Martin; Jay Dulany, (Testified via teleconference), Director, Division of Motor Vehicles, Department of Public Safety; Ron King, Project Manager, Mobil Sources, Department of Environmental Conservation; Paul Fuhs, Commissioner, Department of Commerce and Economic Development; Brad Phillips, Alaska Tourism Marketing Council (ATMC), Anchorage; Tina Lindgren, (ATMC), Anchorage; John Binkley, Representing Self, Fairbanks. SUMMARY HB 47 An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or more primary ballots must be provided to the public. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HB 328 An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date. 1 HB 328 was placed into Subcommittee with Representative Martin as Chair and held for further consideration. HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. HB 342 was HELD in Committee for further consideration. HOUSE BILL 47 "An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or more primary ballots must be provided to the public." Representative Martin noted that HB 47 had been drafted following the 1992 Primary Election in which an absentee ballot applicant had not indicated a ballot preference. Through this legislation, the absentee voter would receive the appropriate primary election ballot, as determined by their political affiliation on record. The legislation would create a 30 day limitation on party affiliation changes to facilitate the election process. JOE SWANSON, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF THE LIEUTENANT GOVERNOR, commented that the fiscal note had been zeroed out. Representative Brown noted her preference of an "open" primary and asked the legal options for that choice. Mr. Swanson advised it would not be optional due to a mandate by the Supreme Court. Currently there are regulations in effect which are based on that court order and which are not in statute. The proposed legislation clarifies regulations. Co-Chair Larson asked if the bill would change the court ruling which would specify that each party make individual determinations whether to open or close the primary. Representative Brown asked if Section #6, Page 5, would annul a regulation. Mr. Swanson replied that Section #6 would provide a cost savings measure and would automatically take the regulations off of the books. Discussion followed between Committee members and Mr. Swanson regarding the open and primary ballot systems. Representative Brown MOVED to amend Page 4, Line 16 and Line 17, deleting "statutory" and inserting "open". 2 Representative Therriault OBJECTED. Representative Parnell stated that the language would be too broad and a mischaracterization of the intention. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Brown, Foster, Grussendorf, Larson. OPPOSED: Martin, Parnell, Therriault, Hanley. Representative Navarre and MacLean were not present for the vote. The MOTION PASSED (5-4). Representative Hanley MOVED to report CS HB 47 (FIN) out of Committee with individual recommendations and with a zero fiscal note. There being NO OBJECTION, it was so ordered. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HOUSE BILL 328 "An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date." Representative Martin noted that the proposed legislation would establish a biennial motor vehicle registration effective January 1, 1995. The fees for biennial registration would be reduced to one and one-half times the current one year rate and would result in an annual savings to motor vehicle owners of $4.6 million dollars. The legislation would also reduce the Division of Motor Vehicle's (DMV) workload by 10% annually, significantly reducing the rate of new hires. JAY DULANY, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, testified that the Department of Public Safety supports the concept of the legislation, however, indicated concern with the potential loss in revenue. JEANNE LARSON, STAFF, REPRESENTATIVE TERRY MARTIN, explained that in establishing the biennial registration, there would be annual inspections for vehicle emissions in order to comply with the federal clean air act. RON KING, PROJECT MANAGER, MOBIL SOURCES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, expounded that the legislation 3 would provide three proposals. Option #1 would employee a sticker program utilizing on street enforcement. Option #2 would become available if statute changes had not been enforced, including more staff, adding penalties under the existing statutes. Option #3 would alter the existing programs, returning to the Anchorage and Fairbanks communities and pursuing options which had previously been excluded. Mr. King indicated that Option #1 would be the least costly to the State. He noted that DEC maintains a neutral position on the bill. Representative Brown asked the changes necessary to implement Option #1. Mr. King stated that a violation or bailable offense would need to be established by statute and would create a fine for operation without the required window sticker. The second change would clarify whether the revocation of registration would be possible. Ms. Larson noted that all fees charged result from program receipts. Representative Brown inquired how the annual emission test would be enacted. Mr. King stated that Option #1 would establish a system in which a sticker would be required on the vehicle in addition to the registration enforcement date. Co-Chair Larson placed HB 328 into Subcommittee with Representative Martin as Chair. 1. Provide for a biennial license. 2. Address concerns of the emission testing. 3. Do away with any changes that would effect vehicle registration fees. HB 328 was HELD in Committee for further consideration. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." REPRESENTATIVE PETE KOTT noted that HB 342 would extend the life of the Alaska Tourism Marketing Council (ATMC) to December 30, 1998. He added that the legislation would conform to the recommendations of the 1993 Budget and Audit report. ATMC falls under the Department of Commerce and Economic Development (DEC), Division of Tourism. ATMC contributes a substantial amount to the State by providing over $52 million dollars each year. 4 Co-Chair MacLean provided the Committee with a work draft Revenues to the State of Alaska Generated by the Visitor Industry". [Copy on file]. She noted that the committee substitute for HB 342 proposed an increase to the industry contribution inline with what the Governor intended in the proposed operating budget. The committee substitute would also increase the minimum industry contribution in statute from 15% to 38% for FY95. Thereafter, there would be a graduation of the industry contribution structured in the bill. Co-Chair MacLean added that ATMC would need increased program receipt authority to accommodate the increases in industry contribution. The draft would not allow for the industry contribution to be in-kind. (Tape Change, HFC 94-123, Side 1). Co-Chair MacLean MOVED to adopt the committee substitute as the version before the Committee. Representative Parnell OBJECTED stressing the damage the harsh measures would inflict to small tour operators by increasing the contributing to 50%. Co-Chair MacLean replied that the small tour operators had agreed to pay a dedicated fund. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, pointed out that if the Alaska Visitor's Association (AVA) was not able to meet the match, the law states that the decision of action should be made by the Commissioner of Commerce, the Director of the Division of Tourism and another commissioner designated by the Governor. He added that a marketing program would continue to exist although it would not be provided by AMTC and if that should happen, an advisory committee would be established. Commissioner Fuhs stated his support for the extension of the Alaska Tourism Marketing Council. The Governor has requested a more substantial match. He noted that ASMI currently provides 85% of their funding source. ATMC contributes a 15% match which the Department thinks is too low. Representative Kott remarked that the in-kind contribution should be considered as an essential element provided by tourism pointing out that last year $5 million dollars has made available. BRAD PHILLIPS, ALASKA TOURISM MARKETING COUNCIL (ATMC), ANCHORAGE, discussed the in-kind contributions. He added 5 that he was discouraged by the impact which the work draft submitted by Representative MacLean would make on small Alaskan operators. He indicated that ATMC has two sources of revenue: 1. Sales of ads. 2. Sale of the mailing list. Mr. Phillips explained that people do not realize the economic contribution made to the State as a result of tourism. This enterprise covers multiple processes and hires over twenty thousand people in the State. He urged the Committee to create a mechanism which would guarantee that money raised by AMTC be used for tourism marketing rather than placed into the general fund. Mr. Phillips noted that the group has not been opposed to a broad base tax in order to provide revenues but asks that those funds be used for tourism marketing only. Discussion followed among Committee members and Mr. Phillips regarding the delegation of taxing power and the need to create a constitutional amendment for a dedicated fund. JOHN BINKLEY, REPRESENTING SELF, FAIRBANKS, explained that the Alaska Tourism Council would like to have the same status as ASMI by paying for half their share and providing for the same mechanism to generate funds. He added that ASMI has the power of taxation and has the authority to veto any tax which the legislature implements. ATMC is requesting that the same authorization of assessment be made available. He pointed out that the tourism industry relies on marketing and they are willing to participate in a joint marketing program. The tourism commodity would be difficult to tax. Consequently, ATMC requests that the constitutional amendment be considered for implementation of tourism marketing for Alaska. Co-Chair MacLean remarked that three taxes have been suggested to the tourism council although not well received: 1. Bed tax; 2. Crew ship head tax; and 3. Motor vehicle rental tax. Mr. Binkley reiterated that the tourism industry wants to guarantee that the funds generated from the taxes be returned to marketing. Representative Brown recommended enacting taxes on a two year basis in order to fund the programs for a short period of time while further work is done in consideration of the 6 constitutional amendment. She observed that the function of the State and the joint partnership in tourism is well exampled by the public-private partnership. HB 342 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 10:10 A.M. HOUSE FINANCE COMMITTEE April 13, 1994 8:30 A.M. TAPE HFC 94 - 122, Side 2, #000 - end. TAPE HFC 94 - 123, Side 1, #000 - #671. CALL TO ORDER Co-Chair Larson called the House Finance Committee meeting to order at 8:30 A.M. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Foster Representative Brown Representative Parnell Representative Grussendorf Representative Therriault Representative Navarre was not present for the meeting. ALSO PRESENT Representative Pete Kott; Joe Swanson, Director, Division of Elections, Office of the Lieutenant Governor; Jeannie Larson, Staff, Representative Terry Martin; Jay Dulany, (Testified via teleconference), Director, Division of Motor Vehicles, Department of Public Safety; Ron King, Project Manager, Mobil Sources, Department of Environmental Conservation; Paul Fuhs, Commissioner, Department of Commerce and Economic Development; Brad Phillips, Alaska Tourism Marketing Council (ATMC), Anchorage; Tina Lindgren, (ATMC), Anchorage; John Binkley, Representing Self, Fairbanks. SUMMARY HB 47 An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or 7 more primary ballots must be provided to the public. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HB 328 An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date. HB 328 was placed into Subcommittee with Representative Martin as Chair and held for further consideration. HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. HB 342 was HELD in Committee for further consideration. HOUSE BILL 47 "An Act relating to the delivery of the primary ballots to persons making application for them when, by operation of political party rule, two or more primary ballots must be provided to the public." Representative Martin noted that HB 47 had been drafted following the 1992 Primary Election in which an absentee ballot applicant had not indicated a ballot preference. Through this legislation, the absentee voter would receive the appropriate primary election ballot, as determined by their political affiliation on record. The legislation would create a 30 day limitation on party affiliation changes to facilitate the election process. JOE SWANSON, DIRECTOR, DIVISION OF ELECTIONS, OFFICE OF THE LIEUTENANT GOVERNOR, commented that the fiscal note had been zeroed out. Representative Brown noted her preference of an "open" primary and asked the legal options for that choice. Mr. Swanson advised it would not be optional due to a mandate by the Supreme Court. Currently there are regulations in effect which are based on that court order and which are not in statute. The proposed legislation clarifies regulations. Co-Chair Larson asked if the bill would change the court ruling which would specify that each party make individual determinations whether to open or close the primary. 8 Representative Brown asked if Section #6, Page 5, would annul a regulation. Mr. Swanson replied that Section #6 would provide a cost savings measure and would automatically take the regulations off of the books. Discussion followed between Committee members and Mr. Swanson regarding the open and primary ballot systems. Representative Brown MOVED to amend Page 4, Line 16 and Line 17, deleting "statutory" and inserting "open". Representative Therriault OBJECTED. Representative Parnell stated that the language would be too broad and a mischaracterization of the intention. A roll call vote was taken on the MOTION. IN FAVOR: Hoffman, Brown, Foster, Grussendorf, Larson. OPPOSED: Martin, Parnell, Therriault, Hanley. Representative Navarre and MacLean were not present for the vote. The MOTION PASSED (5-4). Representative Hanley MOVED to report CS HB 47 (FIN) out of Committee with individual recommendations and with a zero fiscal note. There being NO OBJECTION, it was so ordered. CS HB 47 (FIN) was reported out of Committee with "no recommendations" and with a zero fiscal note by the Office of the Governor. HOUSE BILL 328 "An Act relating to motor vehicle registration and registration fees; to fees for drivers' licenses and permits; and providing for an effective date." Representative Martin noted that the proposed legislation would establish a biennial motor vehicle registration effective January 1, 1995. The fees for biennial registration would be reduced to one and one-half times the current one year rate and would result in an annual savings to motor vehicle owners of $4.6 million dollars. The legislation would also reduce the Division of Motor Vehicle's (DMV) workload by 10% annually, significantly reducing the rate of new hires. JAY DULANY, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF PUBLIC SAFETY, testified that the Department of Public Safety supports the 9 concept of the legislation, however, indicated concern with the potential loss in revenue. JEANNE LARSON, STAFF, REPRESENTATIVE TERRY MARTIN, explained that in establishing the biennial registration, there would be annual inspections for vehicle emissions in order to comply with the federal clean air act. RON KING, PROJECT MANAGER, MOBIL SOURCES, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, expounded that the legislation would provide three proposals. Option #1 would employee a sticker program utilizing on street enforcement. Option #2 would become available if statute changes had not been enforced, including more staff, adding penalties under the existing statutes. Option #3 would alter the existing programs, returning to the Anchorage and Fairbanks communities and pursuing options which had previously been excluded. Mr. King indicated that Option #1 would be the least costly to the State. He noted that DEC maintains a neutral position on the bill. Representative Brown asked the changes necessary to implement Option #1. Mr. King stated that a violation or bailable offense would need to be established by statute and would create a fine for operation without the required window sticker. The second change would clarify whether the revocation of registration would be possible. Ms. Larson noted that all fees charged result from program receipts. Representative Brown inquired how the annual emission test would be enacted. Mr. King stated that Option #1 would establish a system in which a sticker would be required on the vehicle in addition to the registration enforcement date. Co-Chair Larson placed HB 328 into Subcommittee with Representative Martin as Chair. 1. Provide for a biennial license. 2. Address concerns of the emission testing. 3. Do away with any changes that would effect vehicle registration fees. HB 328 was HELD in Committee for further consideration. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." 10 REPRESENTATIVE PETE KOTT noted that HB 342 would extend the life of the Alaska Tourism Marketing Council (ATMC) to December 30, 1998. He added that the legislation would conform to the recommendations of the 1993 Budget and Audit report. ATMC falls under the Department of Commerce and Economic Development (DEC), Division of Tourism. ATMC contributes a substantial amount to the State by providing over $52 million dollars each year. Co-Chair MacLean provided the Committee with a work draft Revenues to the State of Alaska Generated by the Visitor Industry". [Copy on file]. She noted that the committee substitute for HB 342 proposed an increase to the industry contribution inline with what the Governor intended in the proposed operating budget. The committee substitute would also increase the minimum industry contribution in statute from 15% to 38% for FY95. Thereafter, there would be a graduation of the industry contribution structured in the bill. Co-Chair MacLean added that ATMC would need increased program receipt authority to accommodate the increases in industry contribution. The draft would not allow for the industry contribution to be in-kind. (Tape Change, HFC 94-123, Side 1). Co-Chair MacLean MOVED to adopt the committee substitute as the version before the Committee. Representative Parnell OBJECTED stressing the damage the harsh measures would inflict to small tour operators by increasing the contributing to 50%. Co-Chair MacLean replied that the small tour operators had agreed to pay a dedicated fund. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, pointed out that if the Alaska Visitor's Association (AVA) was not able to meet the match, the law states that the decision of action should be made by the Commissioner of Commerce, the Director of the Division of Tourism and another commissioner designated by the Governor. He added that a marketing program would continue to exist although it would not be provided by AMTC and if that should happen, an advisory committee would be established. Commissioner Fuhs stated his support for the extension of the Alaska Tourism Marketing Council. The Governor has requested a more substantial match. He noted that ASMI currently provides 85% of their funding source. ATMC 11 contributes a 15% match which the Department thinks is too low. Representative Kott remarked that the in-kind contribution should be considered as an essential element provided by tourism pointing out that last year $5 million dollars has made available. BRAD PHILLIPS, ALASKA TOURISM MARKETING COUNCIL (ATMC), ANCHORAGE, discussed the in-kind contributions. He added that he was discouraged by the impact which the work draft submitted by Representative MacLean would make on small Alaskan operators. He indicated that ATMC has two sources of revenue: 1. Sales of ads. 2. Sale of the mailing list. Mr. Phillips explained that people do not realize the economic contribution made to the State as a result of tourism. This enterprise covers multiple processes and hires over twenty thousand people in the State. He urged the Committee to create a mechanism which would guarantee that money raised by AMTC be used for tourism marketing rather than placed into the general fund. Mr. Phillips noted that the group has not been opposed to a broad base tax in order to provide revenues but asks that those funds be used for tourism marketing only. Discussion followed among Committee members and Mr. Phillips regarding the delegation of taxing power and the need to create a constitutional amendment for a dedicated fund. JOHN BINKLEY, REPRESENTING SELF, FAIRBANKS, explained that the Alaska Tourism Council would like to have the same status as ASMI by paying for half their share and providing for the same mechanism to generate funds. He added that ASMI has the power of taxation and has the authority to veto any tax which the legislature implements. ATMC is requesting that the same authorization of assessment be made available. He pointed out that the tourism industry relies on marketing and they are willing to participate in a joint marketing program. The tourism commodity would be difficult to tax. Consequently, ATMC requests that the constitutional amendment be considered for implementation of tourism marketing for Alaska. Co-Chair MacLean remarked that three taxes have been suggested to the tourism council although not well received: 1. Bed tax; 12 2. Crew ship head tax; and 3. Motor vehicle rental tax. Mr. Binkley reiterated that the tourism industry wants to guarantee that the funds generated from the taxes be returned to marketing. Representative Brown recommended enacting taxes on a two year basis in order to fund the programs for a short period of time while further work is done in consideration of the constitutional amendment. She observed that the function of the State and the joint partnership in tourism is well exampled by the public-private partnership. HB 342 was HELD in Committee for further discussion. ADJOURNMENT The meeting adjourned at 10:10 A.M. 13