Legislature(2003 - 2004)

03/31/2003 03:39 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SB 122-NONRES.GAME TAG FEES/WILDLIFE TOUR PASS                                                                     
MR. GORDY WILLIAMS, special assistant,  Alaska Department of Fish                                                               
and Game (ADF&G),  explained to members that SB  122 contains two                                                               
parts.  The first  part establishes  a $15  wildlife conservation                                                               
pass for  certain visitors  who use  a commercial  opportunity to                                                               
view  wildlife. The  second part  raises  non-resident alien  big                                                               
game  tag fees  for certain  species. He  provided the  following                                                               
     The  Administration believes  it is  appropriate for  a                                                                    
     broad  range   of  visitors  to   the  state   to  make                                                                    
     contributions  to   the  management  of   our  wildlife                                                                    
     resources.   Historically,   hunters,   fishermen   and                                                                    
     trappers have provided  the bulk of the  funding and we                                                                    
     think it  is appropriate that  those who are  coming to                                                                    
     the state  - visitors  - help out  in that  regard when                                                                    
     they're  viewing   our  wildlife.  About   1.5  million                                                                    
     visitors come  to Alaska  annually and  the opportunity                                                                    
     to  view   wildlife  is  an  important   part  of  that                                                                    
     experience for many of them.                                                                                               
     The  wildlife conservation  pass  will  raise a  little                                                                    
     over $7 million annually  at the beginning. As provided                                                                    
     in the  bill, those revenues  will be deposited  into a                                                                    
     separate account  in the general fund  and appropriated                                                                    
     for  various  wildlife  management programs  and  other                                                                    
     The  pass establishes  a  requirement for  nonresidents                                                                    
     who  use a  commercial  provider of  an opportunity  to                                                                    
     view wildlife to  have one of these  passes unless they                                                                    
     qualify for one  of the exemptions in  the bill. Alaska                                                                    
     residents  are   exempt  from  this   requirement;  all                                                                    
     persons under  16 are  exempted; disabled  veterans are                                                                    
     exempted; travelers  on the  marine highway  system are                                                                    
     exempted; and any visitor who  holds a hunting, fishing                                                                    
     or trapping  license good for  that year would  also be                                                                    
     exempt. We  believe that people  who come to  the state                                                                    
     should make  a contribution to wildlife  management. If                                                                    
     they're making it through the  purchase of a hunting or                                                                    
     fishing  license, than  that is  a contribution  enough                                                                    
     [so] that showing that license  will allow them to take                                                                    
     the commercial tours.                                                                                                      
MR.  WILLIAMS said  ADF&G believes  a portion  of the  additional                                                               
revenue   raised  can   assist  the   state  in   reaching  match                                                               
requirements  for  the   federal-state  wildlife  grant  program.                                                               
Alaska receives about  $3.9 million under that  program. ADF&G is                                                               
currently in a planning phase  with that funding, which means the                                                               
state is  only matching it  at a rate  of 1:3. Once  the programs                                                               
are implemented, the match rate will increase to 1:1.                                                                           
He explained  that the  second part  of the  bill will  raise tag                                                               
fees  for  non-residents  and non-resident  aliens  for  caribou,                                                               
moose,  sheep, and  goat in  varying  amounts from  $50 to  $100.                                                               
Alaska's tag  fees fall  in the mid-range  when compared  to fees                                                               
charged  by other  Western states.  The Governor  believes it  is                                                               
appropriate  to increase  these fees  for non-residents  and non-                                                               
resident aliens. He offered to answer questions.                                                                                
SENATOR  ELTON asked  Mr.  Williams why  programs  like fish  and                                                               
wildlife protection  or the promotion  of tourism  were precluded                                                               
as  appropriate  uses  of  the  fund that  these  fees  could  be                                                               
deposited into.                                                                                                                 
MR. WILLIAMS said nothing has been  excluded as the money will be                                                               
deposited  into   the  general  fund  and   the  legislature  has                                                               
appropriation powers.                                                                                                           
SENATOR  ELTON noted  that SB  122 specifies  three purposes  for                                                               
which the legislature intends to use those funds.                                                                               
MR. WILLIAMS said  that ADF&G believes it can make  good use of a                                                               
portion  of these  funds  but it  will be  under  the purview  of                                                               
future legislators to decide exactly how the funds are spent.                                                                   
CHAIR OGAN stated the separate  accounting language really pushes                                                               
the limits but will have no  effect due to the constitutional ban                                                               
on  dedicated funds.  He added  if  the legislature  is going  to                                                               
raise taxes,  he believes  the money should  go into  the general                                                               
fund to be used to offset the budget gap.                                                                                       
SENATOR  WAGONER asked  whether  vendors who  do  not submit  the                                                               
collected  fees to  the state  will be  subject to  penalties and                                                               
whether any enforcement will be available.                                                                                      
MR. WILLIAMS  said that is  not specifically addressed in  SB 122                                                               
but,  by adding  the wildlife  conservation  fee to  the list  of                                                               
licenses  in the  bill, violators  will  be subject  to the  same                                                               
penalties that  apply to  a vendor who  does not  submit revenues                                                               
raised  from the  sale  of  sport fish  licenses.  He offered  to                                                               
provide specific information at a later date.                                                                                   
SENATOR WAGONER  noted that vendors  will also be  collecting the                                                               
fees, not  just those who  sell hunting and fishing  licenses. He                                                               
asked if  a person who runs  raft trips will sell  the $15 permit                                                               
to his or her customers.                                                                                                        
MR. WILLIAMS said  those business owners will  become vendors. He                                                               
pointed out that  ADF&G has about 1500 vendors who  sell fish and                                                               
game  licenses  statewide.  ADF&G anticipates  that  number  will                                                               
increase  significantly if  this  bill passes  because  a lot  of                                                               
tourist operators will want to sell these licenses.                                                                             
CHAIR OGAN noted the presence of Representative Kohring.                                                                        
SENATOR SEEKINS  asked how  much money SB  122 is  anticipated to                                                               
raise per year.                                                                                                                 
MR. WILLIAMS said about $7.5 million in FY 04.                                                                                  
SENATOR SEEKINS  asked how much  revenue ADF&G receives  from the                                                               
sale of fish and game licenses each year.                                                                                       
MR.  WILLIAMS  did  not  have that  information  and  offered  to                                                               
provide it at a later date.                                                                                                     
SENATOR SEEKINS said it appears to  him that the only new purpose                                                               
for which  this fund would  be used  is for wildlife  viewing. He                                                               
asked if ADF&G is currently using  any fish and game fees that it                                                               
collects for viewing programs.                                                                                                  
MR. WILLIAMS said  the short answer is yes, for  the match of the                                                               
state wildlife grant  funds. He then deferred to  Ms. Sydeman for                                                               
the specifics.                                                                                                                  
MS.  MICHELLE  SYDEMAN, Assistant  Director  of  the Division  of                                                               
Wildlife  Conservation,   told  members   that  ADF&G   does  not                                                               
currently use fish  and game funds to match the  federal funds it                                                               
receives  for  wildlife  viewing  programs.  The  source  of  the                                                               
matching funds  for those programs  are receipts from  the McNeil                                                               
River bear viewing area, Pack  Creek, and the Round Island walrus                                                               
viewing area.                                                                                                                   
SENATOR  SEEKINS asked  if, under  current statute,  the receipts                                                               
from viewing areas can be used as a match for federal funds.                                                                    
MS. SYDEMAN said they can.                                                                                                      
SENATOR SEEKINS  asked if SB  122 will just add  another category                                                               
from the  $7.5 million that  can be  used for matching  funds for                                                               
those same purposes.                                                                                                            
MS. SYDEMAN said the difficulty  that Mr. Williams spoke about is                                                               
due to the  fact that under the statute that  pertains to receipt                                                               
of the federal funds, the state  match rate is 1:3 while wildlife                                                               
viewing programs are  in the planning phase. As  ADF&G moves into                                                               
the implementation  phase, the required match  rate will increase                                                               
to 1:1.  In addition, ADF&G does  not have an adequate  source of                                                               
matching funds  for research or management  of non-hunted species                                                               
or for any of ADF&G's education programs.                                                                                       
SENATOR SEEKINS asked:                                                                                                          
     In  the total  universe of  funding that  comes to  the                                                                    
     department, what percentage would  this add? If we were                                                                    
     to pass  this, let's say,  you know  kind of on  a weak                                                                    
     manner, as  the Chairman said,  that you may  use these                                                                    
     funds for this purpose, how  much as a percentage would                                                                    
     that add  to the  budget that  you are  already getting                                                                    
     from these  various sources of federal  funds - Pittman                                                                    
     Robinson  funds, fish  and game  funds, etcetera,  that                                                                    
     are dedicated now to the department?                                                                                       
MS. SYDEMAN replied  it is her understanding  that the division's                                                               
budget  totals   about  $25  million.  ADF&G's   request  to  the                                                               
administration and to  the legislature would be for  a portion of                                                               
these funds.  ADF&G has stated a  hope that if this  bill passes,                                                               
some of  this money might  be made  available to match  the state                                                               
wildlife grant  money. She  thought the fees  might amount  to $3                                                               
million of the division's total $25 million budget.                                                                             
SENATOR ELTON  referred to page  1, line  10, and asked  what the                                                               
breakdown  is between  state general  funds,  federal, and  other                                                               
funds for the wildlife management program.                                                                                      
MS. SYDEMAN said  the Division of Wildlife  Conservation does not                                                               
receive  any general  funds at  this time.  It receives  about $8                                                               
million  of fish  and  game  funds, primarily  from  the sale  of                                                               
hunting  and  trapping  licenses  and other  tag  fees.  It  also                                                               
receives about $8 million of Pittman Robinson money.                                                                            
SENATOR ELTON  commented that  SB 122  makes it  sound as  if the                                                               
fees will  replace general fund  dollars, while it  will actually                                                               
add  dollars to  a program  that does  not get  any general  fund                                                               
dollars.  He then  noted  that about  800,000  people will  visit                                                               
Alaska on  cruise ships this  year. Those ships have  programs in                                                               
place to collect  receipts for onshore tours, a  portion of which                                                               
is  remitted to  the businesses.  He felt  this legislation  will                                                               
give the cruise  ships the opportunity to collect  up to $500,000                                                               
for  something  they are  already  doing.  He  asked if  that  is                                                               
MR. WILLIAMS  said that  cruise ships  provide an  opportunity to                                                               
view wildlife  so cruise  ship passengers will  have to  pay this                                                               
fee or be exempted when they enter Alaskan waters.                                                                              
SENATOR ELTON asked if those licenses  will be sold by the cruise                                                               
ship operators, who will retain $1 for each license.                                                                            
MR. WILLIAMS said  they would be eligible to do  that should they                                                               
want to become vendors.                                                                                                         
SENATOR   ELTON   noted  their   profit   margin   could  go   up                                                               
CHAIR OGAN said  that "significantly" is subjective  if they have                                                               
to process 500,000 applications.                                                                                                
SENATOR ELTON  asked Mr. Williams  if he anticipates  any skewing                                                               
whereby  a person  could evade  the $15  wildlife viewing  fee by                                                               
purchasing a fishing license for $10.                                                                                           
MR. WILLIAMS said that possibility  was discussed, but ADF&G does                                                               
not believe that  will be a significant problem. He  said for one                                                               
thing,  he assumes  some folks  who choose  to sell  these passes                                                               
will also  become full  vendors and sell  all licenses.  He noted                                                               
the problem with exempting people  who have a $10 one-day fishing                                                               
license is the  burden it will place on  the commercial operators                                                               
who must verify that passengers have valid licenses.                                                                            
SENATOR  WAGONER said  it would  be a  lot simpler  to avoid  the                                                               
ability to do that by raising the one-day license fee to $15.                                                                   
SENATOR LINCOLN  asked where  the entry  point is  for collecting                                                               
the fees.                                                                                                                       
MR. WILLIAMS said it is an  annual pass and will be purchased the                                                               
first  time  a person  avails  him  or  herself of  a  commercial                                                               
opportunity to  view wildlife. The  pass could be  purchased from                                                               
the vendor or from other sources.                                                                                               
SENATOR LINCOLN asked what will happen  if a person does not have                                                               
MR. WILLIAMS  said the person would  not be eligible to  take the                                                               
SENATOR LINCOLN asked who will enforce that.                                                                                    
MR. WILLIAMS said because the program  is under Title 16, it will                                                               
be enforced  in the same  way the  Division of Fish  and Wildlife                                                               
Protection  deals   with  other   hunting  and   fishing  license                                                               
SENATOR LINCOLN said the Governor's  budget reduces the number of                                                               
fish  and  game  wildlife   protection  officers.  She  expressed                                                               
concern that  enforcement as proposed  in this bill will  rely on                                                               
an honor  system. She pointed out  that a tour operator  will not                                                               
be required  to sell  these licenses. She  then noted  the Alaska                                                               
Travel  Industry Association  does not  support this  legislation                                                               
and   questioned    whether   the   Administration    asked   the                                                               
Association's opinion of this bill.                                                                                             
MR.  WILLIAMS  said there  are  different  levels of  support  in                                                               
different sectors of the industry. He  said he does not know what                                                               
the level of outreach was  to specific groups. The Governor feels                                                               
this  is an  appropriate contribution.  ADF&G believes  a lot  of                                                               
visitors  will  be  happy  to   make  this  contribution  because                                                               
wildlife viewing  is one  of the reasons  they travel  to Alaska.                                                               
Regarding  enforcement, he  pointed out  there will  be penalties                                                               
for the operator and the person who does not hold a license.                                                                    
SENATOR  LINCOLN asked  where that  provision is  located in  the                                                               
MR.  WILLIAMS repeated  it  falls under  Title 16  so  it is  not                                                               
specifically listed in the legislation.                                                                                         
SENATOR LINCOLN emphasized  that someone will have  to enforce it                                                               
for  a  person  to  be  penalized.  She  suggested  that  with  a                                                               
reduction  in the  number of  wildlife protection  officers, this                                                               
will place  another burden upon  a smaller staff. She  then asked                                                               
if the  Administration has assessed  the impact  this legislation                                                               
will have on  the Alaska Visitors Association. She  noted she has                                                               
not received  one letter  of support  from that  Association. She                                                               
asked what  kind of an  assessment the Administration  did before                                                               
it introduced this legislation.                                                                                                 
MS. SYDEMAN said  she does not know much about  the outreach that                                                               
was  done,  but  she  does   know  that  the  Alaska  Wilderness,                                                               
Recreation  and  Tourism Association  came  forward  and said  it                                                               
supported this  concept. That  organization represents  300 small                                                               
SENATOR  SEEKINS commented  that when  the Governor  provided his                                                               
budget, it appeared to be  targeted toward meeting a certain draw                                                               
down  in  the  Constitutional  Budget Reserve  (CBR)  by  cutting                                                               
expenses   in  one   place  and   providing  additional   revenue                                                               
elsewhere.  In  some respects,  this  fee  was represented  as  a                                                               
source of  additional revenue. He asked  if ADF&G views it  as an                                                               
additional source of revenue for  the department, not necessarily                                                               
as  a budget  balancing mechanism  to provide  revenue to  offset                                                               
other cuts.                                                                                                                     
MR. WILLIAMS  said that ADF&G is  hopeful that with this  kind of                                                               
revenue  generating  mechanism,  it  could make  a  case  that  a                                                               
portion of it should go to  the department for needs he described                                                               
earlier. He stated  it will be a revenue generator  for the state                                                               
and the Governor has stated  support for tourism related wildlife                                                               
SENATOR  SEEKINS  said  if  some   of  this  money  is  used  for                                                               
additional  matching funds  while the  intent  was to  use it  to                                                               
balance the budget, the legislature  would be rather disingenuous                                                               
about  how it  is earmarked.  He said  he is  supportive of  more                                                               
wildlife management  education programs  for tourists, but  he is                                                               
concerned that legislators don't  misrepresent the facts that the                                                               
funds are  to be earmarked for  ADF&G rather than to  balance the                                                               
draw down on the CBR.                                                                                                           
CHAIR  OGAN noted  that he  shares Senator  Seekins' concern  and                                                               
suggested striking that language from the bill.                                                                                 
SENATOR SEEKINS  noted he is  a wildlife  viewer for all  but the                                                               
one time  he harvests  a moose  each year  so he  appreciates the                                                               
value of  wildlife viewing  and wants  to enhance  it as  much as                                                               
possible. He  repeated his  concern is  about the  impression the                                                               
legislature may leave with SB 122 if not careful.                                                                               
SENATOR  WAGONER questioned  whether the  legislature will  set a                                                               
bad  precedent by  allowing the  separate accounting  language to                                                               
remain  in  the bill.  He  pointed  out that  the  Administration                                                               
already knows  that the wildlife  viewing stamp will  generate so                                                               
much money and it is up  to the Administration to recommend where                                                               
it wants to  budget that money, therefore it is  not necessary to                                                               
keep that language in the bill.                                                                                                 
SENATOR SEEKINS  commented that the  tourism industry  would also                                                               
like to have a slice of this pie.                                                                                               
SENATOR WAGONER noted that he  contacted the tourism industry and                                                               
asked  where the  proposal  is that  they  told legislators  they                                                               
would be submitting.  That proposal was a tax  package that would                                                               
amount  to a  2  percent sales  tax  on certain  tourist-oriented                                                               
activities.  He was  told  two  weeks ago  they  would have  that                                                               
package to the legislature but he  has not received it so he said                                                               
he is not sure how serious they are.                                                                                            
CHAIR OGAN  asked if  SB 122  will be a  "freebie" for  those who                                                               
drive up the highway and never  use a vendor to view wildlife. He                                                               
asked if  passengers would owe the  state $15 each if  they saw a                                                               
moose along the highway.                                                                                                        
MR.  WILLIAMS  said  the  issue  of  how  to  charge  independent                                                               
travelers was raised on the  House side. ADF&G anticipates that a                                                               
large number  of those  folks will purchase  either a  hunting or                                                               
fishing   license  or   avail  themselves   of  some   commercial                                                               
opportunity. He said short of a  tollgate at the border, it would                                                               
be difficult to collect the fee.                                                                                                
CHAIR  OGAN  considered renaming  the  fee  and whether  visitors                                                               
could  file  a class  action  lawsuit  if  they  do not  see  any                                                               
TAPE 03-20, SIDE B                                                                                                            
SENATOR ELTON noted  the Governor is not calling it  a tax, he is                                                               
calling it  a user fee, which  means the committee would  want to                                                               
name it for its intended purpose.                                                                                               
SENATOR  WAGONER   suggested  renaming   it  the   "Alaska  State                                                               
Conservation Fee." He said the  word "wildlife" should be removed                                                               
because he agrees  with Chair Ogan that people might  not see any                                                               
CHAIR OGAN  informed members that  he did  not intend to  pass SB
122 from committee today.                                                                                                       
SENATOR  LINCOLN asked  how many  states have  a similar  fee and                                                               
what amount they charge.                                                                                                        
MS. SYDEMAN  said the  notion of  charging to  set up  a user-pay                                                               
system  akin to  the programs  in place  for hunting  and fishing                                                               
licenses has taken a  lot of forms. She said she  is not aware of                                                               
fees  in any  other  states except  Louisiana,  which requires  a                                                               
wildlife stamp to  visit fish and game state  managed lands. Some                                                               
states  have imposed  a sales  tax on  items used  by consumptive                                                               
wildlife  users and  some  use  a portion  of  the proceeds  from                                                               
lotteries.  Some  countries charge a conservation  fee of several                                                               
dollars upon exit.                                                                                                              
CHAIR OGAN  said he thought  there was consensus  among committee                                                               
members to  rename the fee the  "Alaska Wolf Control Tax"  and to                                                               
change the intent  language so that the money will  be used for a                                                               
predator control program.                                                                                                       
SENATOR ELTON  noted that  although he  does not  plan to  make a                                                               
motion today,  he would like  the committee to  consider amending                                                               
the bill  to add, on page  2, line 12, after  the word "viewing,"                                                               
"fish and wildlife protection,  tourism promotion,". He explained                                                               
that the intent  of the amendment would be to  use the balance of                                                               
the  $7  million   that  is  not  used  for   fish  and  wildlife                                                               
conservation for enforcement and  tourism promotion. He felt this                                                               
money might  be an  appropriate source  to replace  those general                                                               
fund dollars.  He said he  would wait  for a response  from ADF&G                                                               
and members of the industry before he offers the amendment.                                                                     
SENATOR  BEN STEVENS  noted that  as a  Senate Finance  Committee                                                               
member, he is  the chair of the subcommittees  on the Departments                                                               
of Fish  and Game  and Public  Safety. He  told members  that the                                                               
wildlife  conservation   portion  of  ADF&G's  budget   is  $29.3                                                               
million, an increase of $1.5  million over last year. It receives                                                               
no general funds. The Division  of Fish and Wildlife Protection's                                                               
budget  [in the  Department of  Public Safety]  is $15.6  million                                                               
with  a   decrement  of  about  $400,000   under  the  Governor's                                                               
proposal.  He noted  the Division  will  lose two  administrative                                                               
positions,   not  enforcement   positions.  He   said  from   his                                                               
perspective, ADF&G is asking for  a fish and wildlife viewing fee                                                               
but the Division of Fish and  Wildlife Protection has not been at                                                               
the table  even though  it has  the responsibility  of protecting                                                               
fish  and game  for  everybody.  He said  he'd  be interested  in                                                               
exploring  the  concept  of  using  the  increased  revenues  for                                                               
existing protection in a department  that is already stretched to                                                               
fulfill  its   current  obligations.  He  said   that  Section  2                                                               
[Separate  accounting   for  wildlife  conservation   pass  fees]                                                               
concerns him because  it says the money will  be appropriated for                                                               
management, viewing and  education programs when the  state has a                                                               
problem protecting the existing game.                                                                                           
CHAIR OGAN  announced that with  no further discussion,  he would                                                               
hold SB 122 in committee and  that the committee would take up HB

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