Legislature(2007 - 2008)

04/18/2007 03:31 PM House FIN


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 147                                                                                                            
                                                                                                                                
     "An Act relating to matching funds in state tourism                                                                        
     marketing contracts with trade associations."                                                                              
                                                                                                                                
3:53:04 PM                                                                                                                    
                                                                                                                                
At-ease.                                                                                                                        
                                                                                                                                
3:53:47 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked about  the private industry  match                                                                   
versus the state  match.  He wondered where  the $2.5 million                                                                   
that  came  from  the  non-cruise  ship  portion  of  private                                                                   
industry goes.   He questioned  how much money goes  into the                                                                   
match fund for the advertising campaign.                                                                                        
                                                                                                                                
BRETT   CARLSON,   VICE   CHAIR,   ALASKA   TRAVEL   INDUSTRY                                                                   
ASSOCIATION   (ATIA),    addressed   Representative    Gara's                                                                   
questions.  The  $2 million private sector portion  goes into                                                                   
the  fund and  is traded  for  "value", such  as an  ad or  a                                                                   
chance to participate  in a media road show.   Representative                                                                   
Gara summarized  that ATIA charges  a business for  access to                                                                   
advertising,  as a  value  match.   He  asked  where the  $.5                                                                   
million came from.  Mr. Carlson  replied, "$2 million in non-                                                                   
cruise  pay to play,  and then  $.5 million  comes from  what                                                                   
industry  calls DMO's,  Destination Marketing  Organizations,                                                                   
which  would be  one  of three  things,  generally."   Larger                                                                   
cities  would have a  convention and  visitors' bureau,  some                                                                   
smaller cities  would have chambers,  and a few  cities might                                                                   
have a department of the city.                                                                                                  
                                                                                                                                
3:58:57 PM                                                                                                                    
                                                                                                                                
Vice Chair Stoltze  drew attention to a letter  by Chip Thoma                                                                   
(copy on file.)                                                                                                                 
                                                                                                                                
Co-Chair Meyer  asked about the 90/10  split.  He said  he is                                                                   
not so sure that the cruise ship  contribution is going to go                                                                   
away.   He voiced  concern about  ATIA's belief that  without                                                                   
that  contribution  only $2  million  could  be raised.    He                                                                   
thought that ATIA was hoping that  the state would contribute                                                                   
$20 million  because ATIA proposes  to raise $2 million.   He                                                                   
thought a  $20 million  request was high.   He wondered  what                                                                   
would happen if the current state  contribution of $8 million                                                                   
is kept.   Mr. Carlson emphasized  that this legislation  has                                                                   
no   bearing   on   the   actual    amount   of   legislative                                                                   
appropriation.   ATIA does not believe that  state government                                                                   
should appropriate  money back that  ATIA is not  putting in.                                                                   
He explained how  the fund would grow.  The  bill would allow                                                                   
ATIA  to match  appropriated funds.    If the  bill does  not                                                                   
pass, ATIA has no access to the funds.                                                                                          
                                                                                                                                
Co-Chair Meyer agreed  that $5 million of the  car rental tax                                                                   
is tourism  related and  could go  to ATIA.   He pointed  out                                                                   
that it  is uncertain  how much money  will be obtained  from                                                                   
the cruise ship  initiative.  He thought it  was premature to                                                                   
ask for  additional money at this  time.  He  suggested other                                                                   
splits.                                                                                                                         
                                                                                                                                
4:04:28 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  asked if ATIA  would support a  statewide bed                                                                   
tax or  sales tax.   Mr. Carlson explained  that the  hope is                                                                   
that  other  forms  of  revenue would  be  available  in  the                                                                   
future.   He  stressed  that the  discussion  on the  funding                                                                   
level could  take place another  time.   At stake now  is the                                                                   
match.   Co-Chair  Meyer asked  if the  cruise ship  industry                                                                   
contributed money this year.   Mr. Carlson reported that that                                                                   
funding will be lost beginning July 1.                                                                                          
                                                                                                                                
4:07:19 PM                                                                                                                    
                                                                                                                                
Representative  Kelly pointed  out  that action  needs to  be                                                                   
taken  at this  time.   The bill  in its  current form  would                                                                   
require  a match of  $800,000.   He spoke  in support  of the                                                                   
bill with an amendment.                                                                                                         
                                                                                                                                
Representative Thomas  asked if the cruise ship  industry has                                                                   
bailed.    Mr. Carlson  said  that  their funding  cannot  be                                                                   
counted on in  FY 08.  Representative Thomas  asked about car                                                                   
rental  tax  money  going  only to  tourism  marketing.    He                                                                   
preferred  to  allocate  it  for   independent  travel.    He                                                                   
reported that he voted against  the cruise ship head tax.  He                                                                   
said he  does not know  what the cruise  ship head  tax money                                                                   
can be used for.                                                                                                                
                                                                                                                                
4:11:24 PM                                                                                                                    
                                                                                                                                
Representative  Gara summarized  that this  bill is  a policy                                                                   
call  based  on a  guess  about  the  cruise industry.    The                                                                   
independent tourism industry benefits  if the cruise industry                                                                   
does not  contribute.  He questioned  why $2 million  for pay                                                                   
to  play and  $.5  million  of  DMO contributions  last  year                                                                   
translates  to only  a total  of $2  million this  year.   He                                                                   
questioned  why  private  industry's  donation  shouldn't  be                                                                   
larger this year than last.                                                                                                     
                                                                                                                                
Mr. Carlson  responded  that the 10/90  legislation  looks to                                                                   
the future to raise money for  a state marketing program.  He                                                                   
opined that a match from the private  sector makes sense.  He                                                                   
explained  that currently  $500,000 comes  from DMO's,  which                                                                   
should be  used locally.   Long-term,  a voluntary  tax won't                                                                   
work.                                                                                                                           
                                                                                                                                
Representative  Gara was  not convinced  it was $2.5  million                                                                   
last year.   He brought up that in Alaska  tourism businesses                                                                   
don't  pay  a  state sales,  income,  or  corporate  tax.  He                                                                   
suggested a 3 to 1 ratio.  Co-Chair Meyer agreed.                                                                               
                                                                                                                                
4:17:04 PM                                                                                                                    
                                                                                                                                
Mr. Carlson  related that  38 states  have no private  sector                                                                   
match.   Of the  11 state  that do,  Alaska's small  industry                                                                   
contributes $5 million, which is just below California.                                                                         
                                                                                                                                
HB  147  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
4:18:26 PM                                                                                                                    
                                                                                                                                

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