Legislature(2003 - 2004)

03/14/2003 01:03 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 163-NONRES.GAME TAG FEES/WILDLIFE TOUR PASS                                                                                
CO-CHAIR FATE  announced that the  final order of  business would                                                               
be HOUSE  BILL NO. 163,  "An Act  relating to an  annual wildlife                                                               
conservation  pass  and  the  fee  for  that  pass;  relating  to                                                               
nonresident  and  nonresident  alien   big  game  tag  fees;  and                                                               
providing for an effective date."                                                                                               
Number 2657                                                                                                                     
KEVIN  DUFFY, Acting  Commissioner, Alaska  Department of  Fish &                                                               
Game (ADF&G), announced  that he was presenting HB  163 on behalf                                                               
of  the  governor.     He  explained  that   HB  163  establishes                                                               
requirements for nonresidents;  he mentioned commercial providers                                                               
of  opportunities  to  view wildlife  and  obtaining  a  wildlife                                                               
conservation pass.   Noting that the  cost of the annual  pass is                                                               
$15,  he  said  this  legislation  also  raises  nonresident  and                                                               
nonresident alien  big-game tag  fees for moose,  caribou, sheep,                                                               
and goats.  With regard  to the wildlife pass, nonresidents under                                                               
age  16 and  all  nonresidents  who hold  any  Alaska hunting  or                                                               
fishing  license  prior  to   utilizing  the  commercial  viewing                                                               
service will  be exempt from purchasing  this pass.  The  $15 fee                                                               
is  estimated  to raise  approximately  $7  million annually,  he                                                               
ACTING  COMMISSIONER  DUFFY  informed   the  committee  that  the                                                               
department would  like to  work with  the administration  and the                                                               
legislature to secure  a portion of these funds for  use, in part                                                               
to  match  significant  new  federal  dollars  coming  to  Alaska                                                               
through  state  wildlife  grant programs.    Currently,  Alaska's                                                               
federal funding for these programs amounts to around $3 million.                                                                
ACTING COMMISSIONER  DUFFY reported that during  the last session                                                               
of  Congress,   then-U.S.  Senator   Frank  Murkowski   and  U.S.                                                               
Representative  Don  Young  sponsored legislation  known  as  the                                                               
Conservation and  Reinvestment Act (CARA),  to provide a  new and                                                               
stable source for  fish and wildlife management.   In response to                                                               
this, he  said, new  federal dollars  are coming  to Alaska.   He                                                               
noted that last year the  state received approximately $4 million                                                               
in the  new state  wildlife grant funding  source; this  year the                                                               
state will  receive around $3 million.   He pointed out  that the                                                               
federal dollars must be matched one-to-one with state dollars.                                                                  
Number 2780                                                                                                                     
ACTING  COMMISSIONER DUFFY  expressed  hope that  HB  163 is  the                                                               
vehicle,  because  [the  department]  believes  this  legislation                                                               
provides a way  for visitors who use and  enjoy Alaska's wildlife                                                               
-  but don't  purchase a  hunting or  fishing license  - to  help                                                               
support  this program  and ensure  that Alaska  maintains healthy                                                               
and productive  wildlife populations.  This  legislation requires                                                               
visitors who take a commercial tour  in order to view wildlife to                                                               
purchase an  annual wildlife conservation  pass.  The  funds from                                                               
the  pass will  be placed  in a  special account  in the  general                                                               
fund, and  therefore may  be appropriated  for fish  and wildlife                                                               
management, viewing, and educational programs.                                                                                  
ACTING  COMMISSIONER DUFFY  highlighted  that the  billion-dollar                                                               
tourism  industry   draws  substantial  revenue  each   year  for                                                               
marketing  Alaska's wildlife.    Therefore, he  opined that  it's                                                               
only  fair  for visitors  and  the  industry that  most  directly                                                               
benefits  from  [the  fish  and  wildlife  populations]  to  help                                                               
sustain  those populations.   The  department believes  that most                                                               
visitors  will   be  happy   to  know   that  they're   making  a                                                               
contribution to wildlife conservation in Alaska, he added.                                                                      
Number 2861                                                                                                                     
REPRESENTATIVE WOLF recalled that  the tourism industry projected                                                               
two  years ago  that the  state could  have 1.6  million visitors                                                               
come to Alaska.   He related his understanding that  HB 163 would                                                               
impose a  viewer fee  on those  taking tours.   He  asked whether                                                               
[this fee  would be imposed on  those] taking charters.   He also                                                               
inquired  as to  [whether this  fee  would be  imposed on  those]                                                               
enjoying wildlife  on the road  from their  recreational vehicles                                                               
ACTING   COMMISSIONER  DUFFY   explained   that  the   commercial                                                               
operators are  the ones that  [the department] is trying  to work                                                               
with  in   order  to  generate   this  revenue  for   the  state.                                                               
Therefore, those traveling  through the state via  an RV wouldn't                                                               
be required to [pay this fee].                                                                                                  
REPRESENTATIVE WOLF  asked if there  is a way to  include broader                                                               
participation [in the proposed fee].                                                                                            
ACTING  COMMISSIONER  DUFFY  indicated the  department  would  be                                                               
willing to work with the legislature to "cast a wider net."                                                                     
Number 2955                                                                                                                     
REPRESENTATIVE LYNN  asked if  any consideration  was given  to a                                                               
reduced fee for children, seniors, and disabled individuals.                                                                    
ACTING  COMMISSIONER DUFFY  answered that  he believes  residents                                                               
under 16  are exempt from  this fee, as  are those [60]  or older                                                               
and those who purchase a hunting  or fishing license.  In further                                                               
response to  Representative Lynn, Acting Commissioner  Duffy said                                                               
he  believes the  current construction  of HB  163 would  require                                                               
nonresident seniors to pay this proposed fee.                                                                                   
CO-CHAIR FATE inquired as to the use of the CARA funds.                                                                         
TAPE 03-16, SIDE B                                                                                                            
Number 3011                                                                                                                     
MICHELLE  SYDEMAN,  Assistant   Director,  Division  of  Wildlife                                                               
Conservation,  Alaska Department  of Fish  & Game,  answered that                                                               
[CARA  funds]   are  used  for  wildlife   recreation,  primarily                                                               
wildlife  viewing,   as  well  as   wildlife-related  educational                                                               
programs  in the  schools and  community.   Those  funds also  go                                                               
toward the  conservation of species that  aren't hunted, trapped,                                                               
or  fished.    The  [federal CARA]  legislation  was  to  provide                                                               
funding  for  nontraditional   wildlife  programs  not  currently                                                               
funding  with the  Pittman-Robertson funds  or license  fees that                                                               
are now collected.                                                                                                              
REPRESENTATIVE GUTTENBERG  turned attention to a  document in the                                                               
committee packet entitled  "Background on H.B. 163  and S.B. 122:                                                               
An act  relating to an  annual Wildlife Conservation Pass".   The                                                               
second paragraph of that document read:                                                                                         
     For nearly  a century,  hunters and anglers  have borne                                                                    
     most of  the cost of  wildlife management.   While they                                                                    
     are  willing  to  pay  their  fair  share  to  conserve                                                                    
     wildlife  populations,   many  have  asked   why  other                                                                    
     wildlife enthusiasts have not stepped up to the plate.                                                                     
REPRESENTATIVE GUTTENBERG  said he thought the  aforementioned to                                                               
be commendable,  but didn't see  HB 163 supporting  those efforts                                                               
because  the  [proposed]  fee  is placed  in  the  general  fund;                                                               
furthermore, there aren't any  wildlife conservation proposals on                                                               
the table.   However,  there do  seem to be  folks lining  up for                                                               
money for programs that aren't wildlife conservation programs.                                                                  
ACTING  COMMISSIONER DUFFY  acknowledged  that there  is a  wider                                                               
range  of  usage  of  these  fees.    However,  [the  department]                                                               
anticipates that a certain portion  of these fees would return to                                                               
the Division  of Wildlife Conservation  and specifically  be used                                                               
as a match for federal  money received for these wildlife viewing                                                               
programs.  The  match is required in order to  expend the federal                                                               
funds, he noted.                                                                                                                
Number 2895                                                                                                                     
REPRESENTATIVE  GUTTENBERG remarked  that the  operative word  is                                                               
"may".   He asked if  there have  been any proposals  for funding                                                               
wildlife conservation efforts.                                                                                                  
ACTING COMMISSIONER DUFFY  replied no, and explained  that HB 163                                                               
was  developed as  part of  revenue-generating measures  that the                                                               
governor believes to  be appropriate for the state.   With regard                                                               
to  whether the  [department] has  incorporated this  into fiscal                                                               
notes for fiscal  year 2004 [FY 04] in the  division, that hasn't                                                               
been  done yet,  he  specified.   However,  that is  anticipated,                                                               
depending upon the outcome of HB 163.                                                                                           
Number 2850                                                                                                                     
REPRESENTATIVE GUTTENBERG noted that  fish anglers and many other                                                               
[groups involved in the fishing  industry] have representation on                                                               
the [Board of Fisheries and the  Board of Game], which manage the                                                               
resources.   Therefore,  he inquired  as to  why, on  the boards,                                                               
there  isn't a  group representing  nonconsumptive users  who are                                                               
now  being asked  to  pay  a fee  to  use  the state  facilities.                                                               
Representative  Guttenberg  reminded  members  that  this  nation                                                               
began with the notion of  no taxation without representation, and                                                               
questioned how that relates to HB 163.                                                                                          
ACTING COMMISSIONER DUFFY said,  with regard to representation on                                                               
the  Board  of  Game,  that dialogue  often  occurs  between  the                                                               
administration and  the legislature.   He  stated that  he didn't                                                               
believe a discussion  of the representation of the  Board of Game                                                               
relative to HB 163 was appropriate.                                                                                             
Number 2779                                                                                                                     
REPRESENTATIVE WOLF  offered his  belief that  the Board  of Game                                                               
includes  a member  representing  nonconsumptive use.   He  asked                                                               
whether  there  is  any  wildlife animal  that  isn't  hunted  or                                                               
trapped in Alaska.   He also asked whether this  will continue to                                                               
promote  the educational  programs  currently established  within                                                               
ADF&G.   Referencing  an unspecified  person who  he said  does a                                                               
fantastic  job  working  with grade  school  children,  he  asked                                                               
whether this will continue to promote that person's program.                                                                    
MS.  SYDEMAN   replied  that  the   hope  is  to   enhance  those                                                               
educational programs, which  work hand in hand with  the needs of                                                               
[ADF&G's] biologists and  wildlife managers.  For  instance, if a                                                               
moose  population  is  in  decline  in  a  particular  area,  the                                                               
biologist may  believe it  would be helpful  for people  there to                                                               
understand  that if  they  don't  hunt cow  moose  for a  certain                                                               
number of  years, it will  help the moose population  to recover.                                                               
That is the  kind of thing for which this  educational program is                                                               
intended, as  well as  to continue programs  in the  schools, she                                                               
REPRESENTATIVE WOLF spoke positively  of two unspecified programs                                                               
in the department currently managed for both fish and game.                                                                     
Number 2675                                                                                                                     
REPRESENTATIVE GUTTENBERG  mentioned a  supreme court  case about                                                               
the  differential  between   resident  and  nonresident  hunting,                                                               
suggesting that  the state is  looking at  a huge liability.   He                                                               
asked  whether  there is  any  similarity  here, since  residents                                                               
aren't being charged the same as nonresidents.                                                                                  
Number 2617                                                                                                                     
ROBERT  NAUHEIM, Assistant  Attorney  General, Natural  Resources                                                               
Section, Civil  Division (Anchorage), Department of  Law, replied                                                               
that he thinks  there is.  He  cited what he suggested  is a very                                                               
helpful case,  Shepherd v. State, Dep't  of Fish & Game,  a [1995                                                             
Alaska  Supreme   Court]  case  that  challenged   the  statutory                                                               
preference  for resident  hunting of  moose, elk,  and deer.   He                                                               
said it  addressed whether that  kind of resident  preference was                                                               
permissible under  the "privileges and immunities"  clause of the                                                               
U.S. constitution  and the  commerce clause,  as well  as several                                                               
provisions  of  the  Alaska  constitution,  including  the  equal                                                               
protection  or  equal rights  clause  and  the equal  application                                                               
MR. NAUHEIM  explained that the  court upheld that statute.   The                                                               
essential  holding  with  respect  to  the  state  constitutional                                                               
issues  was this:   residents  and nonresidents  aren't similarly                                                               
situated with respect  to access to recreational use  of fish and                                                               
game.   The  court declined  to pursue  any further  analysis and                                                               
said  the  state  can make  distinctions  between  residents  and                                                               
nonresidents  for purposes  of recreational  access  to fish  and                                                               
game;  it  also  noted  that  Article VIII,  Section  2,  of  the                                                               
constitution  seems  to impose  "a  kind  of obligation  for  the                                                               
state, in  some cases, to  require a preference,  especially when                                                               
there's  a shortage."    He said  the  case doesn't  specifically                                                               
address  a   shortage,  but  that  he   thought  mentioning  that                                                               
provision was helpful.                                                                                                          
Number 2522                                                                                                                     
MR.  NAUHEIM,  with  respect to  federal  constitutional  issues,                                                               
reported that  the court  [in Shepherd]  ruled that  "articles of                                                             
unharvested fish  and game"  not destined  to be  articles bought                                                               
and sold  in interstate  commerce aren't subject  to the  kind of                                                               
analysis imposed by  the court on laws that  seem to discriminate                                                               
against   interstate  commerce.     It   essentially  held   that                                                               
unharvested  moose   and  game  aren't  articles   of  interstate                                                               
Number 2457                                                                                                                     
MR. NAUHEIM  suggested that  an argument made  by the  guides [in                                                               
Shepherd]  has some  degree  of relevance  with  respect to  this                                                             
bill.  He explained:                                                                                                            
     It  addressed  an  argument made  by  the  guides  that                                                                    
     because   there  was   a   disparate  opportunity   for                                                                    
     residents  and nonresidents,  ...  any  kind of  burden                                                                    
     that  it  placed  on  the  guides  in  terms  of  their                                                                    
     business -  hurting their business if  they ... catered                                                                    
     to nonresidents -  was a de minimis kind  of burden and                                                                    
     incidental, and so long as  the state was attempting to                                                                    
     address a  scarcity or some other  reasonable objective                                                                    
     -   reasonable   state   interest  -   that   kind   of                                                                    
     discrimination wasn't fatal to the law.                                                                                    
MR. NAUHEIM told members that  the provision raised most often in                                                               
these kinds  of cases  is the  privileges and  immunities clause.                                                               
He reported  that the Baldwin  case -  a U.S. Supreme  Court case                                                             
well known to  "fish and game" attorneys - said  that a state can                                                               
distinguish between  residents and  nonresidents for  purposes of                                                               
recreational access  to fish  and game;  it did  so on  the basis                                                               
that  the  privileges  and  immunities   clause  of  the  federal                                                               
constitution  was designed  to protect  those kinds  of essential                                                               
activities or  basic rights that  are necessary to  maintaining a                                                               
union  of states,  and it  specifically found  that hunting  game                                                               
such as elk is not one of  them.  Mr. Nauheim added, "Our supreme                                                               
court  relied  specifically  on  that   case  to  hold  that  our                                                               
preference  for  residents,  in  the  case  of  certain  big-game                                                               
hunting,  was   ...  sustainable,  was  permissible   under  that                                                               
constitutional provision under Baldwin."                                                                                      
Number 2364                                                                                                                     
REPRESENTATIVE KERTTULA asked whether,  in terms of viewing, this                                                               
is  really  talking  about  tourism.   She  also  asked,  "Aren't                                                               
Alaskans just  as similarly situated  as nonresidents,  and isn't                                                               
that where  we're going  to really have  our problem?  ... That's                                                               
interstate commerce.   And then we get shifted into  a whole more                                                               
difficult analysis, don't we?"                                                                                                  
MR.  NAUHEIM  acknowledged that  as  one  argument, but  said  he                                                               
thinks  the bill's  real purpose  is to  equalize costs  borne by                                                               
residents and nonresidents.  He  offered his understanding of the                                                               
policy objectives  of the  administration and  ADF&G to  be this:                                                               
the $15 fee reflects a difference  in the amount the state can be                                                               
viewed as  spending on  residents versus  nonresidents.   He said                                                               
nonresidents  [currently] don't  pay anything  unless they  buy a                                                               
hunting or fishing license, for  example, and yet there are costs                                                               
associated with  managing fish and  wildlife populations  so that                                                               
they're  healthy, and  there is  what he  called the  "incidental                                                               
benefits of viewing them" for both Alaskans and non-Alaskans.                                                                   
MR. NAUHEIM  noted that Alaskans  do pay for  government services                                                               
by virtue  of the stream  of oil taxes  and other user  fees that                                                               
the state charges and then  allocates [through the general fund].                                                               
He cited  the Carlson case  as upholding "those kinds  of efforts                                                             
to equalize  the costs that  are borne by residents,  through the                                                               
diversion ... of various revenues  from the general fund, and ...                                                               
has allowed the  state to take those into account  ... in looking                                                               
at  how  the  costs  of  providing  ...  for  fish  and  wildlife                                                               
opportunities is borne."                                                                                                        
Number 2222                                                                                                                     
MR.  NAUHEIM said  he realizes  separate treatment  for residents                                                               
and  nonresidents does  raise  constitutional issues,  especially                                                               
with respect  to the  commerce clause.   He  expressed confidence                                                               
about  advancing  a  vigorous  case  if  it  is  challenged,  but                                                               
acknowledged  that   there  is  no  guarantee   of  the  outcome,                                                               
especially for constitutional issues in  a new area.  Noting that                                                               
he wasn't aware of another instance  in the country of an attempt                                                               
to  assess  [a  fee  for]  a license  for  wildlife  viewing,  he                                                               
concluded  by saying,  "That's  not  to say  that  some of  these                                                               
principles  wouldn't apply  with  equal  force.   But  it is  ...                                                               
admittedly sort of a foray into a new area."                                                                                    
Number 2176                                                                                                                     
REPRESENTATIVE  KERTTULA noted  that she  wasn't up  on the  most                                                               
recent   permutation  of   the   Carlson   case,  but   requested                                                             
confirmation that  the state  has gone  through quite  an onerous                                                               
burden trying to justify the  differential [between residents and                                                               
nonresidents].   Observing  that  the case  has  been around  for                                                               
years, she asked, "That's just a risk, am I right?"                                                                             
MR. NAUHEIM replied  that he thinks it's a fair  assessment.  For                                                               
the  bill, he  suggested there  are  two advantages.   First,  it                                                               
isn't directly taxing a commercial  operation, but is assessing a                                                               
user  fee  for those  nonresidents  who  view wildlife,  with  an                                                               
enforcement mechanism  through the  use of  commercial providers;                                                               
and, second, this bill doesn't  have the fee disparity present in                                                               
the Carlson case, which involved  taxing of a commercial activity                                                             
- commercial fishing - and in  which the fee disparity was in the                                                               
hundreds of dollars.   He acknowledged that if this  case went to                                                               
court, the litigation could have a significant cost.                                                                            
Number 2083                                                                                                                     
REPRESENTATIVE  KERTTULA said  she understands  the arguments  on                                                               
how   [the   state's]   oil  money   goes   towards   roads   and                                                               
infrastructure, for  example, and  thus can be  counted as  if it                                                               
were a  tax on Alaskans.   However, she questioned  what Alaskans                                                               
pay  specifically   for  [wildlife]  viewing  and   how  treating                                                               
nonresidents differently  can be  justified.  She  clarified that                                                               
she doesn't  want to pay for  being able to see  wildlife, but is                                                               
concerned  about  what   will  happen  if  this   is  imposed  on                                                               
nonresidents.    She  noted  that   under  previous  cruise  ship                                                               
legislation,  the proposed  head  tax clearly  was on  everybody,                                                               
which  is  how  constitutionality  problems were  avoided.    She                                                               
thanked Mr. Nauheim for his analysis.                                                                                           
Number 2022                                                                                                                     
REPRESENTATIVE GUTTENBERG  referred to  page 4, Section  7, which                                                               
indicates the commissioner may appoint  agents.  Noting that only                                                               
one  part-time employee  is being  added, he  asked whether  that                                                               
same person would [be responsible  for] Ketchikan, Anchorage, and                                                               
Fairbanks, for example.                                                                                                         
ACTING COMMISSIONER DUFFY answered:                                                                                             
     We  already have,  under our  current structure,  about                                                                    
     1,600 licensed  vendors statewide.   A number  of those                                                                    
     people  would be  used  [for] this  program.   So  what                                                                    
     we're trying  to do from  our side of the  equation is,                                                                    
     in  terms   of  the   personnel  to  do   the  specific                                                                    
     administrative structure, we're trying  to keep that to                                                                    
     a minimum.   That's why  you have one  part-time person                                                                    
     reflected in  there.  But  we already have  a structure                                                                    
     in place  for the  hunting licenses, and  we anticipate                                                                    
     using a similar structure  ... on this wildlife-viewing                                                                    
Number 1955                                                                                                                     
REPRESENTATIVE GUTTENBERG noted that  people might board a cruise                                                               
ship in Seattle  and not get off until reaching  Juneau, or might                                                               
fly  to Fairbanks  and board  a  tour bus.   He  asked where  the                                                               
infrastructure would  be built  to collect  the fees  from people                                                               
who don't interact with hunting and fishing license vendors.                                                                    
Number 1900                                                                                                                     
KEVIN  BROOKS,  Director,  Division of  Administrative  Services,                                                               
Alaska  Department of  Fish  & Game,  replied  that although  the                                                               
expectation is to  add some vendors such as cruise  lines or tour                                                               
operators, the department would try  to incorporate this into the                                                               
existing  fish-and-game licensing  system, which  involves 1,500-                                                               
1,600 vendors as well as significant sales over the Internet.                                                                   
REPRESENTATIVE KERTTULA asked whether  Mr. Brooks has worked with                                                               
the tourism industry on this, and how they feel about it.                                                                       
MR.  BROOKS, noting  that  the  genesis of  the  bill was  fairly                                                               
recent,  said, "We  have not  had  any discussions  with them  to                                                               
date."   He offered the  expectation, if the bill  moves forward,                                                               
that discussions would have to occur.                                                                                           
Number 1817                                                                                                                     
REPRESENTATIVE   KERTTULA  expressed   concern   about  how   the                                                               
effective date  would impact  the industry if  this passes.   She                                                               
related  her understanding,  from speaking  with people  from the                                                               
department,  that [ADF&G]  isn't  averse to  pushing that  [date]                                                               
forward  so  companies  won't  have to  charge  people  who  have                                                               
already booked [tours] this year more money.                                                                                    
MR.  BROOKS replied  that if  the bill  [passes], the  department                                                               
will  have  to  order  stock  and do  many  things  to  gear  up.                                                               
Pointing out that someone who  holds a fishing or hunting license                                                               
is  exempt from  this, he  said  about 300,000  residents and  an                                                               
equal  number  of  nonresidents  currently  buy  those  types  of                                                               
licenses.  He added, "Yes, there  will take some rollout, and you                                                               
could set a  date at some time  in the future that it  might be a                                                               
smoother rollout, but I think we  could put some efforts forth to                                                               
get  it  implemented ...  this  summer  season  coming up."    He                                                               
acknowledged that it will take some  work, and that there will be                                                               
a  transition period.    Noting  that he  couldn't  speak to  how                                                               
enforcement would occur  in the first year, he  surmised that "as                                                               
we're ramping  up and getting  stock out,  ... there's got  to be                                                               
some consideration given that it's a brand-new program."                                                                        
Number 1729                                                                                                                     
REPRESENTATIVE GUTTENBERG asked how  much in fees ADF&G envisions                                                               
MR. BROOKS offered  his belief that the fiscal  note contained an                                                               
estimate based  on the  number of visitors  minus the  number who                                                               
currently buy fishing  and hunting licenses.   After being handed                                                               
a copy of the fiscal note,  he paraphrased parts of the analysis,                                                               
which read [original punctuation provided]:                                                                                     
     Annual revenue estimates are based on the following                                                                        
     1) About 1.2 million nonresidents will travel to                                                                           
     Alaska as tourists in FY04.  Of these about 300,000                                                                        
     will purchase a hunting, fishing or trapping license                                                                       
     and therefore would not be required to purchase an                                                                         
     annual Wildlife Conservation Pass.  Of the remaining                                                                       
     900,000 nonresidents (some of whom are under the age                                                                       
     of 16), we project that approximately 500,000 would                                                                        
     purchase the pass, generating about $7.5 million in                                                                        
     2) We project that the number of pass purchasers will                                                                      
     increase by an estimated 5% annually based on                                                                              
     current tourism trends.                                                                                                    
MR.  BROOKS  explained  that  ADF&G  also  had  made  efforts  to                                                               
determine [the number  of] people between the ages of  16 and 60,                                                               
which  is really  the target,  since people  younger than  16 and                                                               
older than 60 wouldn't need to buy this [pass].                                                                                 
Number 1588                                                                                                                     
WAYNE  REGELIN testified  on  his own  behalf,  noting that  he'd                                                               
recently retired from  ADF&G, where he served for  eight years as                                                               
the  director  and  six  years  as the  deputy  director  of  the                                                               
Division of Wildlife [Conservation].   Saying he has been working                                                               
on this  legislation at both  the federal  and state level  for a                                                               
long time,  he offered some  background to explain why,  in large                                                               
part, he believes the bill was introduced.                                                                                      
MR. REGELIN reported  that in fiscal year 2001  (FY 01), Congress                                                               
began  providing funds  to all  state fish-and-wildlife  agencies                                                               
for the  purposes of  fish-and-wildlife education;  management of                                                               
species  that  are  hunted, trapped,  or  fished;  and  wildlife-                                                               
viewing  programs.   The International  Association  of Fish  and                                                               
Game Agencies  led the efforts  to secure this funding,  he said,                                                               
and Alaska  had a  significant role  in getting  this legislation                                                               
through  Congress,  since Congressman  Don  Young  was the  prime                                                               
sponsor  in  the  U.S. House  of  Representatives  and  then-U.S.                                                               
Senator  Frank  Murkowski  was  the prime  sponsor  in  the  U.S.                                                               
Senate;  they chaired  the main  committees of  referral for  the                                                               
federal legislation.   Mr. Regelin said he'd  worked closely with                                                               
the association  and Alaska's congressional delegation  to obtain                                                               
this funding.                                                                                                                   
MR.  REGELIN, noting  that this  year Alaska  will receive  $3.88                                                               
million in state wildlife grants,  pointed out that these must be                                                               
matched with  state funds either  at the 3-to-1 or  1-to-1 level,                                                               
depending on the project.  He  conveyed his strong belief that it                                                               
is in Alaska's best interest to  expand these three programs.  He                                                               
     [To] ensure  the long-term continuation of  hunting and                                                                    
     trapping  throughout the  nation,  we need  to have  an                                                                    
     educated and  an informed public.   And a lot  of these                                                                    
     funds will  be used  to expand  programs in  our school                                                                    
     systems so that kids can  understand the role of humans                                                                    
     in  the natural  systems, and  for the  older students,                                                                    
     for the role of hunting.                                                                                                   
     There  are numerous  anti-hunting groups  that have  or                                                                    
     are  in the  process of  developing education  programs                                                                    
     that  they're  pushing  hard to  get  into  our  school                                                                    
     systems.  And  we need to provide an  alternative.  And                                                                    
     we're doing this across all of the states right now.                                                                       
Number 1430                                                                                                                     
MR. REGELIN  said many adults who  have a strong desire  to learn                                                               
about  wildlife   management  and   wildlife  species   urge  the                                                               
department to  provide more programs including  hunting, viewing,                                                               
and  outdoor-skills  clinics.    Suggesting  that  some  of  this                                                               
funding could be  used for that, he said this  bill would provide                                                               
the necessary  match to the  federal dollars  in order to  have a                                                               
strong fish-and-wildlife  educational program  in Alaska.   There                                                               
also  is a  need  to  collect more  information  on species  that                                                               
aren't hunted or trapped.   "We have the responsibility to manage                                                               
all  wildlife species  in Alaska,"  he remarked,  noting that  of                                                               
Alaska's  485 species  of birds  and mammals,  45 are  hunted and                                                               
trapped.  He offered the following:                                                                                             
     Each  year,  various  states  and  the  U.S.  Fish  and                                                                    
     Wildlife  Service   [are]  petitioned   repeatedly  by,                                                                    
     basically,  anti-development groups  to  list ...  many                                                                    
     species  as threatened  or endangered.   Most  of these                                                                    
     species aren't  in any  trouble, but  ... we  lack data                                                                    
     about  their population  size  and  distribution.   And                                                                    
     because of  that lack of information,  some get listed.                                                                    
     But even if  they don't, it ...  slows everything down;                                                                    
     it takes  a lot of time  and money to fight  ... and go                                                                    
     out  and get  that information.   And  this bill  would                                                                    
     provide  ... the  funds for  us  to get  ahead of  that                                                                    
     curve and collect the needed  information on species of                                                                    
     special concern,  ... to keep them  from getting listed                                                                    
     ... if it's not necessary.                                                                                                 
Number 1312                                                                                                                     
MR. REGELIN continued:                                                                                                          
     The other thing  the bill would do is  provide funds to                                                                    
     expand  the  department's   just-beginning  program  in                                                                    
     wildlife viewing.  I think it  would be a great help to                                                                    
     the  tourist industry  by  enhancing opportunities  for                                                                    
     people  to see  wildlife.   I  think  the best  tourist                                                                    
     marketing in  the world is  ... to send home  happy and                                                                    
     satisfied   customers  to   tell   their  friends   and                                                                    
     neighbors that they should visit Alaska.                                                                                   
     Also, the wildlife-viewing  programs have a significant                                                                    
     economic  potential for  economic development  in rural                                                                    
     Alaska.    Many  tourists  are  eager  to  visit  small                                                                    
     villages  and view  the  wildlife,  see the  lifestyle.                                                                    
     And  villages that  choose to  develop  a program  that                                                                    
     [caters] to  these visitors could  make a lot  of money                                                                    
     or at  least have  some income in  that village.   They                                                                    
     just need a  little help to get started, and  we can do                                                                    
     that  through  this  program,  with  small  grants  and                                                                    
     expertise to help them get started.                                                                                        
MR. REGELIN  said he  can't believe  a $15  fee will  keep anyone                                                               
from  coming to  Alaska,  and  offered his  belief  that it  will                                                               
enhance rather  than hurt the  tourism industry.  He  related his                                                               
experience,  from talking  to people  across the  state for  many                                                               
years, that "most  of them ... don't mind paying  a small fee for                                                               
good wildlife management and enhanced viewing opportunities."                                                                   
Number 1209                                                                                                                     
MR. REGELIN suggested two changes to the bill.  First, he                                                                       
wouldn't exempt Alaskans from the fee.  He explained:                                                                           
     Remember,  if a  person  buys a  hunting  or a  fishing                                                                    
     license,  they're already  exempt, and  it's only  fair                                                                    
     that the nonconsumptive users  pay their share, because                                                                    
     they  put a  lot of  demands  on the  division and  the                                                                    
     department,  and they  want services  that cost  money.                                                                    
     And hunters  and fishermen have been  paying the entire                                                                    
     bill for many, many years,  and it's time for everybody                                                                    
     to step up and pay their share.                                                                                            
MR.   REGELIN    further   suggested   it   would    remove   the                                                               
constitutionality problem  with regard to the  commerce clause if                                                               
everyone  were  charged.    Second,   he  proposed  changing  the                                                               
effective date  to January  1.  He  explained the  difficulty for                                                               
the  department  of  buying  the license  stock  and  getting  it                                                               
printed, for  example. He estimated  that with a January  1 date,                                                               
it still would bring in 40 percent of the revenue for FY 04.                                                                    
MR. REGELIN concluded  by saying the department  doesn't need the                                                               
$8 million  he believes  this fee will  generate, but  only needs                                                               
about $3 million to match  the federal funds.  Acknowledging that                                                               
[general]  funds  cannot  be  dedicated   and  may  be  used  for                                                               
something else, he suggested that  the sponsor statement from the                                                               
Office of the  Governor shows a strong commitment  to using these                                                               
funds  to provide  that match.   He  expressed confidence  in the                                                               
legislature, especially since he said  this will be identified as                                                               
a  separate account  within the  general  fund.   He offered  his                                                               
belief that the  department's estimates for the  fiscal note were                                                               
Number 0983                                                                                                                     
SARAH DUNLAP  testified, noting  that she and  her husband  own a                                                               
small  guiding business  primarily  involved in  wildlife-viewing                                                               
opportunities.   Pointing  out that  this definitely  will affect                                                               
her  business, she  said  she  believes the  idea  has merit  and                                                               
should be discussed, but emphasized  the need for the legislature                                                               
to  move  carefully  and  slowly,  rather than  rush  this  as  a                                                               
mechanism to increase the revenue stream for the budget.                                                                        
MS.  DUNLAP  conveyed three  concerns  about  the bill.    First,                                                               
instituting it midseason this year  will unduly burden businesses                                                               
that  provide wildlife-watching  opportunities, she  said, noting                                                               
that her  business already is  committed to its clients  for this                                                               
year  to  provide  a  guiding   service  that  includes  all  the                                                               
necessary  permits  and   fees.    Therefore,  if   the  pass  is                                                               
instituted this  summer, it  will tax  her business,  rather than                                                               
the viewers themselves.   She suggested it would  be difficult to                                                               
explain  [to customers]  and institute  in the  short term.   She                                                               
emphasized  the desire  to take  time to  put this  forward as  a                                                               
state  so that  visitors  to Alaska  are aware  of  it [ahead  of                                                               
MS.  DUNLAP  addressed  her  second concern.    She  requested  a                                                               
possible  exemption for  areas visited  by wildlife  viewers that                                                               
already are under a particular  "fee demo program."  For example,                                                               
her business primarily takes people  to Pack Creek to view bears,                                                               
which is  under this program  and has a  fairly hefty fee  of $50                                                               
per adult  during the  peak season.   She  reported that  the 225                                                               
visitors her business  took to Pack Creek last year  paid a total                                                               
of  about $4,730  in fees,  and thus  the clients  already pay  a                                                               
significant fee for wildlife viewing opportunities.                                                                             
MS. DUNLAP explained her third concern:   it won't be fair if the                                                               
revenue  generated by  the bill  mostly will  disappear into  the                                                               
general  fund and  not truly  go to  enhancing watchable-wildlife                                                               
programs, for habitat conservation, or  for promoting Alaska as a                                                               
tourism destination.                                                                                                            
Number 0733                                                                                                                     
REPRESENTATIVE  KERTTULA  asked  whether most  smaller  operators                                                               
provide services for a flat fee that takes care of everything.                                                                  
MS. DUNLAP said  she believes so; it is easier  to sell a package                                                               
that includes  all the services.   She expressed concern  even as                                                               
far  as  incorporating  this  in  the  future,  noting  that  her                                                               
business  is  trying to  hold  the  line  with regard  to  rising                                                               
insurance  and fuel  costs,  for  example.   There  is a  certain                                                               
feeling  for  what  can  be   charged,  she  explained,  "and  we                                                               
personally feel like  we work pretty close to  that."  Therefore,                                                               
she suggested that  any fees like this will be  split between the                                                               
business and the visitor.   For wildlife viewing, she offered her                                                               
belief  that many  operators are  like her  husband and  herself,                                                               
with   small,   family-owned  or   moderate-sized,   Alaska-based                                                               
businesses.   She proposed that  this tax will fall  more heavily                                                               
on  small  businesses than  on  the  larger companies,  and  that                                                               
smaller  businesses are  more likely  to be  engaged in  wildlife                                                               
Number 0583                                                                                                                     
REPRESENTATIVE  GATTO  asked  whether   Ms.  Dunlap  charges  her                                                               
clients Juneau's sales tax.   He also asked whether she generally                                                               
would advertise the trip as "the cost plus tax and fees."                                                                       
MS. DUNLAP  replied that her  company's trips take  place outside                                                               
the borough and aren't  subject to the sales tax.   If she had to                                                               
deal with it,  however, she surmised that she would  roll it into                                                               
the total  cost, since she  doesn't break  down other costs.   In                                                               
response to  a question from  Representative Lynn,  she specified                                                               
that  the 5.5-hour  guided tour  [to Pack  Creek] costs  $475 per                                                               
person and  includes all  fees, guiding  by naturalists,  and the                                                               
flights.  She voiced concern about pushing that cost any higher.                                                                
Number 0442                                                                                                                     
BOB  JANES, Owner,  Gastineau Guiding  Company, informed  members                                                               
that  his company  generally takes  people on  day hikes  in [the                                                               
Juneau area].   He suggested  that people  at some time  would be                                                               
willing to  support this  kind of  a wildlife  conservation pass,                                                               
but  said  this  bill  scares  him -  it  is  premature  and  the                                                               
ramifications haven't been considered  thoroughly.  Asking why it                                                               
applies only  to commercial operators, he  suggested all visitors                                                               
to Alaska  should pay for the  pass, because they come  to Alaska                                                               
to  view and  enjoy the  wildlife.   Reporting  that his  company                                                               
includes sales  tax in Juneau in  its net price, he  said none of                                                               
the taxes or trail-use fees  are broken out and shown separately;                                                               
this would be  a tax to the company as  a commercial operator, he                                                               
said.   Acknowledging that it  is a tough question,  he suggested                                                               
considering  residents  as  possible   viewers  and  enjoyers  of                                                               
Alaska's wildlife as well.                                                                                                      
MR. JANES  also expressed concern  about where the funds  will go                                                               
and how this will be administered.   Speaking in support of money                                                               
to  gain  federal  matching  dollars  to  help  enhance  wildlife                                                               
programs,  he suggested  it is  unfair  to push  the burden  onto                                                               
commercial  tour   operators,  and  that  perhaps   it  could  be                                                               
challenged  in the  long run.    With regard  to how  it will  be                                                               
administered,  Mr. Janes  offered his  experience that  if it  is                                                               
enacted quickly, it  will be a nightmare to collect  the fees and                                                               
figure out how to  get them [to the state].   He pointed out that                                                               
for his company's  tours, some people arrive on  cruise ships and                                                               
some by plane.                                                                                                                  
MR.  JANES  spoke  against  applying   this  only  to  commercial                                                               
operators.   He asked how it  will be assessed fairly  if someone                                                               
takes a  $4,000 tour, as  opposed as someone  who pays for  a $30                                                               
hike  from his  company.   He questioned  how that  would balance                                                               
out, noting that people who go  up on the [Mount Roberts Tramway]                                                               
pay  $22 for  that, and  would have  to add  another $15,  nearly                                                               
doubling the price.                                                                                                             
TAPE 03-17, SIDE A                                                                                                            
Number 0001                                                                                                                     
MR.  JANES   said  he  didn't   necessarily  oppose   a  wildlife                                                               
conservation  pass,  which  in  the long  term  could  have  good                                                               
implications  for a  state like  Alaska, but  offered his  belief                                                               
that such legislation  hasn't passed in other  states "because it                                                               
scared  them too,"  since there  are real  operational and  other                                                               
reasons that  this hasn't  been instituted  in other  states with                                                               
REPRESENTATIVE GATTO asked  Mr. Janes whether he'd  support it if                                                               
the cost were "15 percent of the fee or $15, whichever is less."                                                                
MR. JANES said he'd think about it.   He added that if it is only                                                               
applied  to commercial  operators, he  believes there  will be  a                                                               
need to  balance it out,  based on  the price of  different tours                                                               
and  experiences.    Foremost,  he said,  he  believes  that  all                                                               
visitors should pay it, not just those  who choose to go out on a                                                               
commercial trip.                                                                                                                
REPRESENTATIVE GATTO asked whether Mr.  Janes would support it if                                                               
it cost less.                                                                                                                   
MR. JANES replied,  "If you can convince me  that only commercial                                                               
operators should be  paying it, then I guess I  would support it.                                                               
But ... I don't believe  that only commercial operators should be                                                               
paying it.   At  this point,  I believe all  visitors -  if we're                                                               
going to have a pass - should be paying it as well."                                                                            
Number 0204                                                                                                                     
MR. JANES,  in response  to a question  from Co-Chair  Fate, said                                                               
the  majority [of  his clients]  now are  from the  cruise ships,                                                               
although the  company is working  hard to develop  new "products"                                                               
for independent visitors  because of having been told  that it is                                                               
the market  that the Juneau  Convention & Visitors  Bureau (JCVB)                                                               
is hoping  to bring  to Juneau, since  those people  are spending                                                               
"overnight  dollars" staying  at hotels,  eating at  restaurants,                                                               
and so forth.                                                                                                                   
Number 0277                                                                                                                     
CO-CHAIR  FATE  asked  Ms.  Dunlap whether  many  people  in  her                                                               
business come from the cruise ships.                                                                                            
MS. DUNLAP answered,  "Not the majority."  [The  remainder of her                                                               
answer was indiscernible on tape.]                                                                                              
CO-CHAIR  FATE  conveyed  his  desire   to  move  the  bill  from                                                               
committee  that  day.    He asked  that  testifiers  limit  their                                                               
comments to about three minutes.                                                                                                
Number 0344                                                                                                                     
REPRESENTATIVE KERTTULA pointed out that  this will have a lot of                                                               
impact  on her  constituents, and  said there  are major  issues,                                                               
including constitutional  and tax  questions, as  well as  how to                                                               
help smaller operators.   She expressed hope that  the bill would                                                               
be  considered at  more than  one hearing.   She  then asked  how                                                               
Gastineau Guiding Company books tours.                                                                                          
MR. JANES said  it is a mix.   The tours can be  purchased on the                                                               
cruise ships,  from the  company's web  site, or  through walk-up                                                               
sales  at the  counter  in Juneau.   The  company  does sales  in                                                               
probably  five  different  venues,  he said,  noting  that  other                                                               
travel agents sell his company's tours as well.                                                                                 
REPRESENTATIVE  KERTTULA  asked  whether  the  target  market  is                                                               
independent travelers or locals who want the educational aspect.                                                                
MR. JANES  replied, "We're there  to provide education  to people                                                               
that want it. ... We don't  feel as a commercial operator that we                                                               
should be penalized, or penalize  our customers that are there to                                                               
get ...  educated by a  professional in the  field."  He  said he                                                               
thinks the  independent market is  the one that will  affect most                                                               
operators  in Alaska,  because of  the  direct competition  [for]                                                               
travelers  who come  to Alaska  on their  own and  are trying  to                                                               
decide whether to spend money on  a tour.  "And $15 doesn't sound                                                               
like much,"  he explained.   "But  if adds another  $15 to  a $60                                                               
tour, they're going to think twice  about whether they want to go                                                               
out on  that tour  or whether they  want to do  it on  their own.                                                               
And that's going to be lost revenue ... in many ways."                                                                          
Number 0531                                                                                                                     
REPRESENTATIVE  KERTTULA,  noting  that  Mr. Janes  has  been  an                                                               
operator for  a long  time and  has extensive  Alaskan knowledge,                                                               
asked  him whether  the  independent market  is  what Juneau  and                                                               
Southeast Alaska are  trying to target.  She noted  that there is                                                               
a great cruise  ship industry in Southeast Alaska  already, but a                                                               
desire for a bigger independent market.                                                                                         
MR.  JANES offered  his  belief that  the  independent market  is                                                               
crucial in Juneau,  since it brings money to  other businesses in                                                               
Number 0607                                                                                                                     
REPRESENTATIVE  GATTO asked  whether  most people  who arrive  in                                                               
Juneau on a  cruise ship have stopped somewhere  else [in Alaska]                                                               
MR. JANES  surmised that 90  percent have.  In  further response,                                                               
he agreed that  many cruise ship passengers would  be taking more                                                               
than one excursion.                                                                                                             
REPRESENTATIVE GATTO  suggested that such a  person already would                                                               
have a pass.                                                                                                                    
Number 0680                                                                                                                     
GEORGE  H.  REIFENSTEIN  JR.,   General  Manager,  Mount  Roberts                                                               
Tramway,  noted that  Mount Roberts  Tramway is  wholly owned  by                                                               
Goldbelt,   Incorporated    ("Goldbelt"),   the    urban   Native                                                               
corporation  for the  Juneau  area.   He  indicated  that of  the                                                               
180,000 to  200,000 visitors who  take the tramway  yearly, about                                                               
60  percent   are  off  cruise  ships;   others  are  independent                                                               
travelers  who  have arrived  by  ferry  or airplane,  and  often                                                               
people go  on the tram  with family  members who live  in Juneau.                                                               
Indicating Goldbelt also operates  Glacier Bay tours and cruises,                                                               
as  well as  cruises out  of Ketchikan,  he said  the company  is                                                               
making forays into the tourism market.  He remarked:                                                                            
     What  we see  are very  tight operating  margins.   And                                                                    
     particularly  in recent  years,  we see  visitors on  a                                                                    
     budget.  You  just need to look around  at what's going                                                                    
     on in, particularly, May and  ... September, and you'll                                                                    
     see that the people up  here are on very tight budgets;                                                                    
     they're  choosing their  tours very  carefully.   We've                                                                    
     seen in recent  years where a tour that was  $100 for a                                                                    
     short cruise, say, down to  ... Tracy Arm, was taken up                                                                    
     by  $15  and  that  elasticity  wasn't  there  for  the                                                                    
     public.   And, consequently, numbers  considerably fell                                                                    
     off in the following year.                                                                                                 
Number 0788                                                                                                                     
MR. REIFENSTEIN  noted that his  company already has  this year's                                                               
pricing information out,  as others had testified  similarly.  He                                                               
mentioned  bird watching,  whale  watching, and  hiking as  being                                                               
fairly low-priced, and confirmed that  the tram ticket costs $22;                                                               
adding  $15 [for  the proposed  pass] would  create a  real sales                                                               
challenge,  resulting  in  great  erosion  for  the  company  and                                                               
precluding the  ability to  make necessary  payments on  the $17-                                                               
million facility.  He told members:                                                                                             
     This  is obviously  a targeted  measure that  one would                                                                    
     call a  "head tax."   Tourism is already  struggling in                                                                    
     this state.   We're losing  our market share.   We have                                                                    
     this problem  where we aren't  getting the word  out to                                                                    
     enough ... of the public  out there in America, Europe,                                                                    
     wherever.   And tourism  has been  flat, ...  and many,                                                                    
     many venues are not seeing much at all.                                                                                    
     This  year,  we're looking  at  a  lot of  uncertainty,                                                                    
     given  ... the  state  of  just international  affairs.                                                                    
     And ... something like  this [pass] could significantly                                                                    
     tip the  scale.  [All]  it takes is a  negative article                                                                    
     [in]  one of  the big  New  York papers  or East  Coast                                                                    
     papers, and  people start  -- you  know, we  don't look                                                                    
     real good.  We don't  need that in the tourism industry                                                                    
     right now.   We're trying  to do the right  thing here.                                                                    
     We're  the  second-largest   private  employer  in  the                                                                    
     state.    And we  believe  that  ... the  money  that's                                                                    
     coming  in through  these tourism  dollars does  funnel                                                                    
     down around the  state.  And we would just  ask for due                                                                    
     consideration as this progresses.                                                                                          
Number 0947                                                                                                                     
REPRESENTATIVE  GATTO asked  whether perhaps  people who  pay the                                                               
$15 might take additional trips because  of not having to pay the                                                               
fee again.                                                                                                                      
MR. REIFENSTEIN said he didn't know.                                                                                            
Number 1056                                                                                                                     
REPRESENTATIVE WOLF referred to  Mr. Reifenstein's figure that 60                                                               
percent of those  using the tram are off cruise  ships.  He asked                                                               
whether  these  people  already would  have  purchased  the  pass                                                               
MR. REIFENSTEIN said  no, indicating that a number  of people who                                                               
ride the cruise ships don't get  off in port; he cited weather as                                                               
one factor.   Noting that  people on  a budget may  wander around                                                               
and select  one tour, if any,  he added, "They are  not all going                                                               
on tours,  and they  aren't all doing  something in  every port."                                                               
He said  it's very  different from  the way  it used  to be.   In                                                               
response  to a  comment  from Representative  Wolf, he  expressed                                                               
hope that  the price structure of  the tramway will be  enough to                                                               
entice those people who do leave the ship.                                                                                      
Number 1084                                                                                                                     
REPRESENTATIVE  GATTO  asked   where  the  [typical]  independent                                                               
traveler in Southeast Alaska is from and what that person does.                                                                 
MR. REIFENSTEIN said there are  a lot of demographic studies, but                                                               
noted  that  a  lot  of  people  come  from  Washington,  Oregon,                                                               
California,  Florida, New  York, and  Illinois, as  well as  from                                                               
across  the United  States.    Some years,  he  noted,  a lot  of                                                               
Italians visit, for example; there  are variations in the foreign                                                               
visitors,  which he  suggested  depends on  how  the currency  is                                                               
valued against the U.S. dollar.                                                                                                 
REPRESENTATIVE KERTTULA  asked whether  tramway tickets  are sold                                                               
through the cruise line itself,  and whether the company gets the                                                               
same return on such a ticket.                                                                                                   
MR.  REIFENSTEIN explained  that the  company has  an arrangement                                                               
with the  cruise lines, which go  to work to sell  the tickets on                                                               
board for  a commission.   Some travelers may  opt not to  buy on                                                               
the ship, however, and may come directly to his company's desk.                                                                 
Number 1184                                                                                                                     
REPRESENTATIVE KERTTULA inquired about  any occasions when prices                                                               
have gone  up [on shore]  without the  ability to raise  the same                                                               
prices on  the ships.   She also  asked whether that  risk exists                                                               
with a fee such as this.                                                                                                        
MR.  REIFENSTEIN noted  that insurance  prices have  doubled this                                                               
year  for  many  in  the  industry; he  indicated  that  must  be                                                               
absorbed by the  industry, since the prices are set  already.  In                                                               
response to a further question,  he added, "We probably have five                                                               
to ten people  a day who call in and  request information, and we                                                               
send that pricing information out  to them; so we've already told                                                               
them what the price is for this year."                                                                                          
CO-CHAIR  FATE   announced  the  intention  of   hearing  from  a                                                               
testifier  present  from out  of  town;  he expressed  hope  that                                                               
testifiers  on   teleconference  that   day  would  be   able  to                                                               
participate at the next hearing on Monday, March 17.                                                                            
Number 1346                                                                                                                     
MARK  MORONES, Communications  Director,  Alaska Travel  Industry                                                               
Association (ATIA),  told members  that many  of the  points he'd                                                               
intended to  make had  been stated  already by  testifiers, since                                                               
ATIA  has  about 1,000  members  and  represents businesses  from                                                               
those the size  of cruise [lines] to mom-and-pop  operations.  He                                                               
said ATIA's  membership includes a  lot of small  businesses that                                                               
he believes would be directly impacted  by HB 163:  92 percent of                                                               
its membership is [from businesses  of fewer than] 50 people, and                                                               
50 percent is [from businesses of fewer than] 5 people.                                                                         
MR. MORONES  acknowledged the  significant state  fiscal concerns                                                               
and expressed appreciation for the  efforts of the administration                                                               
and the legislature to control  spending and identify new funding                                                               
sources.  However, he said that's about  as far as he could go in                                                               
supporting  this particular  bill.   He pointed  out that  from a                                                               
marketing perspective, the bill  fosters a negative perception of                                                               
the state.  As the  person who oversees [ATIA's] public relations                                                               
contract, Mr.  Morones cited testimony that  this nonconsumptive-                                                               
user  fee is  a novel  concept.   Also pointing  out the  media's                                                               
tendency to remember  unique things, he said this  isn't the type                                                               
of  message  he  wants  to  present to  the  national  market  of                                                               
potential visitors to Alaska.                                                                                                   
Number 1497                                                                                                                     
MR.   MORONES  reported   that  ATIA   has  concerns   about  the                                                               
administration  and  policing [of  the  proposed  pass], many  of                                                               
which  had  been  mentioned  [by  other  testifiers].    He  also                                                               
concurred with  Mr. Reifenstein's  characterization of this  as a                                                               
targeted  tax, saying  the statewide  association  is against  it                                                               
because  it  appears punitive  in  nature  and goes  against  the                                                               
perception of  Alaska as  a destination.   Suggesting it  also is                                                               
divisive with  respect to  various sectors  of the  industry that                                                               
ATIA represents, he said:                                                                                                       
     We have  been, as  an organization, much  more amenable                                                                    
     to the  concept of broad-based taxes  that would evenly                                                                    
     impact, across all sectors.   We think that's probably,                                                                    
     from our  standpoint, the  fairest way  that we  can go                                                                    
     ... and have  everybody bear ... the  cost of potential                                                                    
     revenue-generating devices.                                                                                                
Number 1619                                                                                                                     
MR. MORONES  emphasized the desire  to increase the  market share                                                               
in  Alaska through  generating  additional  funding for  [ATIA's]                                                               
tourism-marketing program.   With regard to  what the broad-based                                                               
funding mechanism could be, he said  the board is looking at that                                                               
now, and will  probably go to the  administration and legislature                                                               
soon  with some  concepts about  distributing that  burden fairly                                                               
among  various sectors  in the  communities.   Acknowledging  the                                                               
challenge   of  finding   a  solution,   Mr.  Morones   expressed                                                               
confidence that there are potentially  better solutions as far as                                                               
the amount of revenue that could be generated.                                                                                  
MR.  MORONES  pointed  out  that  the  fiscal  note  for  HB  163                                                               
indicates there is 5 percent  industry growth.  However, he cited                                                               
a study conducted  by [the McDowell Group] that  looked by region                                                               
across Alaska,  "through ATIA members and  non-ATIA members," and                                                               
showed that growth has flattened  out; he suggested the last time                                                               
there was 5  percent growth was probably 1997.   He mentioned 3.1                                                               
percent [growth] in 1999, 0.8 percent  in 2000, and 0.16 in 2001;                                                               
he offered  the belief that  it was flat  in 2002.   He suggested                                                               
that although the cruise industry  had increased capacity through                                                               
moving   more  vessels   from  the   Mediterranean  and   Europe,                                                               
increasing capacity by 12 percent,  the actual increase in people                                                               
being  brought up  [to  Alaska] was  4 percent.    "We've seen  a                                                               
significant   decline   in   non-cruise   traffic,"   he   added,                                                               
reiterating  the  belief that  there  is  a better  mechanism  to                                                               
generate revenue.   He expressed  the desire  to be at  the table                                                               
for  that discussion.   He  specified that  ATIA doesn't  support                                                               
this [wildlife conservation] pass.                                                                                              
Number 1766                                                                                                                     
CO-CHAIR FATE asked  when ATIA proposes to take  the package that                                                               
its board has been working on to the governor.                                                                                  
MR. MORONES  replied, "We're  waiting for  the ...  details right                                                               
now."   He said there are  a lot of  voices to be heard  on this,                                                               
and expressed hope  that it would be fairly soon.   He reiterated                                                               
that the board is actively working on it.                                                                                       
Number 1806                                                                                                                     
REPRESENTATIVE  KERTTULA recalled  that  the marketing  structure                                                               
had  been changed  completely,  and that  the  state does  little                                                               
toward it, whereas ATIA has taken it over.                                                                                      
MR. MORONES  explained that ATIA  is a consolidation of  the ATMC                                                               
[Alaska   Tourism  Marketing   Council],   the  Alaska   Visitors                                                               
Association, and  components of  the "division  of tourism."   He                                                               
said one concept envisioned in  the "millennium plan" was looking                                                               
to increase  tourism marketing  overall "by  reaching a  point of                                                               
$10 million, which is our marketing budget for this year."                                                                      
MR. MORONES  reported that 60  percent of that budget  comes from                                                               
[ATIA's] private  membership - from  membership fees,  $2 million                                                               
in  voluntary  contributions from  the  cruise  lines, and  about                                                               
$900,000 from "our convention and  visitor bureaus."  Noting that                                                               
the industry has seriously taken  on the challenge of seeing what                                                               
it can do to expand the marketing message, he remarked:                                                                         
     Quite frankly, we have just  about ... tapped the level                                                                    
     of contribution that  we can ask of our  members and be                                                                    
     able  to  provide to  them  the  kind of  [cooperative]                                                                    
     marketing  programs  that   they  can  participate  in,                                                                    
     bearing in  mind that the  majority of our  members are                                                                    
     pretty small [businesses], and  that's why they're part                                                                    
     of  our association,  is to  be able  to leverage  onto                                                                    
     that big  marketing picture.   So [as]  a part  of that                                                                    
     deal over these  last few years, we  have increased our                                                                    
     contribution   and   the   state  has   decreased   its                                                                    
     contribution.    So we  have  $6  million in  order  to                                                                    
     generate the $4-million match from the state.                                                                              
Number 1906                                                                                                                     
MR. MORONES concluded:                                                                                                          
     Under the  current operating budget,  that is  where we                                                                    
     would be at again for the  coming fiscal year.  And so,                                                                    
     one  of the  concerns that  we do  have ...  when we've                                                                    
     seen  ... the  proposal for  the conservation  pass and                                                                    
     the suggestion  of a seasonal sales  tax [also proposed                                                                    
     by  the governor]  that would  generate $35  million in                                                                    
     revenue for the  state - that's a  potential double hit                                                                    
     to our industry,  without seeing any kind  of return to                                                                    
     our marketing program.                                                                                                     
     So we realize  that there's a lot more  movement ... to                                                                    
     go toward some sort of  sustainable funding source.  We                                                                    
     don't think  that HB  163 is that  vehicle, but  ... we                                                                    
     would  like   to  be  at  the   table  to  meaningfully                                                                    
     participate in those conversations.                                                                                        
Number 1950                                                                                                                     
CO-CHAIR FATE thanked participants, suggesting there might be                                                                   
areas in which the bill could be improved.  [HB 163 was held                                                                    

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