Legislature(2007 - 2008)SENATE FINANCE 532

04/08/2008 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 212 MEDICAL ASSISTANCE ELIGIBILITY TELECONFERENCED
Moved SB 212 Out of Committee
+= SB 8 MENTAL HEALTH PATIENT RIGHTS:STAFF GENDER TELECONFERENCED
Moved CSSB 8(FIN) Out of Committee
+ HB 2 VOCATIONAL EDUC ACCOUNT TELECONFERENCED
Scheduled But Not Heard
+ HB 147 TOURISM CONTRACT: STATE FUNDS AND MATCH TELECONFERENCED
Heard & Held
+= HB 166 CONTRIBUTIONS FROM PERM. FUND DIVIDENDS TELECONFERENCED
Moved SCS CSHB 166(FIN) Out of Committee
+ HB 289 EMPLOYMENT TAX EXEMPTION: SPILL RESPONSE TELECONFERENCED
Scheduled But Not Heard
+ HB 307 ASSAULTS: REPEAT OFFENDERS TELECONFERENCED
Scheduled But Not Heard
+ HB 406 CONTRACTS FOR PREPARATION OF BALLOTS TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR HOUSE BILL NO. 147(RLS)                                                                                                
                                                                                                                                
     "An Act relating to matching funds and state money for                                                                     
     state   tourism    marketing   contracts    with   trade                                                                   
    associations; and providing for an effective date."                                                                         
                                                                                                                                
10:15:34 AM                                                                                                                   
                                                                                                                                
PETE FELLMEN,  STAFF, REPRESENTATIVE  JOHN HARRIS,  presented                                                                   
an  overview  of  the  bill.  He  reported  that  HB  147  is                                                                   
basically  the same  bill  as SB  144,  sponsored by  Senator                                                                   
Lesil McGuire. The  difference between the two  bills is that                                                                   
the  finance  committee  believed  it prudent  to  limit  the                                                                   
amount  of funds  that  the  Office of  Economic  Development                                                                   
could spend  on tourism  to $9 million.  Mr. Fellman  noted a                                                                   
sunset provision  for 2011  to give  the tourism industry  an                                                                   
opportunity  to grow  and self  finance  the advertising.  He                                                                   
reminded  the Committee  that  state tourism  generates  $1.5                                                                   
billion into the state's economy.  He noted that for every $1                                                                   
the state  contributes, $1.68 in  returned to the  state. The                                                                   
economic boom  from tourism flows throughout  every region of                                                                   
Alaska  and  touches  many individuals  and  businesses.  Mr.                                                                   
Fellman disclosed  that only nineteen other  states require a                                                                   
private  sector  contribution.  Only Florida  and  California                                                                   
have private  section contributions more than  Alaska. Alaska                                                                   
ranks thirty-six in the nation in public sector funding.                                                                        
                                                                                                                                
10:19:10 AM                                                                                                                   
                                                                                                                                
Senator  Elton remained  undecided on  this approach  because                                                                   
state marketing  efforts, with  seafood and tourism,  usually                                                                   
require  a market  test. This  market test  asserts that  the                                                                   
benefiting industry believes they  are receiving enough value                                                                   
to contribute  themselves at a certain level.  His hesitation                                                                   
to this approach is that the industry  is not contributing at                                                                   
the same level as before.                                                                                                       
                                                                                                                                
10:20:19 AM                                                                                                                   
                                                                                                                                
Mr. Fellman  responded that when  the cruise ship  tax became                                                                   
part of  the state  statute, with  cruise lines paying  money                                                                   
directly  to the  state's budget,  they  withdrew $2  million                                                                   
that they had  been investing in tourism. At  one time Alaska                                                                   
was putting  in $20  million for  tourism marketing  but that                                                                   
has since decreased.                                                                                                            
                                                                                                                                
Senator  Elton  interjected that  the  cruise  lines are  not                                                                   
paying  the tax directly  but  charging the  head tax to  the                                                                   
passengers.                                                                                                                     
                                                                                                                                
10:22:05 AM                                                                                                                   
                                                                                                                                
Senator Olson  inquired about the distribution  level between                                                                   
urban and rural Alaska.                                                                                                         
                                                                                                                                
10:22:25 AM                                                                                                                   
                                                                                                                                
Mr.  Fellman responded  that  there  are a  thousand  tourism                                                                   
businesses in  the ATIA (Alaska Travel  Industry Association)                                                                   
and that money is distributed  throughout the state depending                                                                   
on how  much is  contributed.  A plan would  be developed  to                                                                   
disseminate the money throughout Alaska's various regions.                                                                      
                                                                                                                                
10:22:53 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  reviewed  the   one  fiscal  note  for  $9                                                                   
million.                                                                                                                        
                                                                                                                                
10:23:07 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman noted  he had similar  concerns as  Senator                                                                   
Elton and  wondered if more  participation by  industry could                                                                   
be considered. He asked if the  bill sponsor would consider a                                                                   
lesser amount than listed in the bill                                                                                           
                                                                                                                                
10:24:07 AM                                                                                                                   
                                                                                                                                
Mr. Fellman responded that the  present amount in the bill is                                                                   
about the limit that the tourism  industry could support. The                                                                   
tourism  industry   will  contribute  $2.7  million   to  the                                                                   
marketing campaign and can not  contribute more at this time.                                                                   
He remarked that  if Alaska tourism begins to  fall, then the                                                                   
amount  businesses  will  be able  to  contribute  will  also                                                                   
decline.  He stressed  that it  was important  for Alaska  to                                                                   
help  this   industry   until  they  are   able  to   support                                                                   
themselves.                                                                                                                     
                                                                                                                                
Co-Chair Hoffman questioned why  is there the belief that the                                                                   
tourism industry is declining.  He assumed Alaska tourism was                                                                   
growing. He remarked that the  cruise line industry has grown                                                                   
tremendously  in past  years  with tourists  commenting  that                                                                   
Alaska sells itself.                                                                                                            
                                                                                                                                
10:26:27 AM                                                                                                                   
                                                                                                                                
Senator  Elton noted  that  it was  hard  for him  to hear  a                                                                   
response that that  says the tourism industry  can not afford                                                                   
more. He remarked that the tourism  industry considers itself                                                                   
larger than  the seafood industry  but the marketing  program                                                                   
for the seafood industry puts  in twice a much as the tourism                                                                   
industry and receives only $1 million from the state.                                                                           
                                                                                                                                
10:27:36 AM                                                                                                                   
                                                                                                                                
Mr. Fellman responded that the  fishing industry has received                                                                   
considerable money in the past  to help develop the industry.                                                                   
He  believed   about  $125  million  has  been   invested  in                                                                   
marketing  to help  the fishing  industry  develop. He  noted                                                                   
that tourism was  a renewable resource that  will continue to                                                                   
generate income  and grow. Tourism money benefits  the entire                                                                   
state.                                                                                                                          
                                                                                                                                
10:29:26 AM                                                                                                                   
                                                                                                                                
Senator Elton reported that as  the former Executive Director                                                                   
of  the  Alaska  Seafood  Marketing   Institute  the  seafood                                                                   
industry  received  approximately   $4  million  a  year.  He                                                                   
stressed there must  be a market test and he  did not believe                                                                   
it had been met.                                                                                                                
                                                                                                                                
10:30:23 AM                                                                                                                   
                                                                                                                                
BRETT  CARLSON,  VOLUNTEER  CHAIR,   ALASKA  TRAVEL  INDUSTRY                                                                   
ASSOCIATION  testified   via  teleconference  and   spoke  in                                                                   
support  of the  bill. He  reminded the  Committee that  ATIA                                                                   
represents  over one thousand  businesses throughout  Alaska.                                                                   
ATIA  believed   that  the  state  can  help   Alaska  travel                                                                   
businesses  and   nurture  the  private  sector   economy  to                                                                   
contribute  revenues  to  local  and  state  government.  Mr.                                                                   
Carlson stressed  that Alaska's tourism marketing  funding is                                                                   
broken. ATIA  believes that this  bill represents a  fix. The                                                                   
$9  million fiscal  note is  less  than the  $9.5 million  in                                                                   
funding that passed out of the  Senate Finance Committee last                                                                   
session.   It  identifies  a   sustainable  travel   industry                                                                   
generated  funding  source  for  Alaska's  tourism  marketing                                                                   
program.                                                                                                                        
                                                                                                                                
10:33:22 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  revealed how proud  he was that  Alaska was                                                                   
leading the  way in getting  participation from  industry and                                                                   
business and hoped  other states would take  that initiative.                                                                   
He  judged  it would  be  better  to  get more  industry  and                                                                   
business participation.                                                                                                         
                                                                                                                                
10:34:09 AM                                                                                                                   
                                                                                                                                
HB  147  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                

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