Legislature(2013 - 2014)SENATE FINANCE 532

03/13/2014 09:00 AM Senate FINANCE


Download Mp3. <- Right click and save file as

Audio Topic
09:11:40 AM Start
09:14:10 AM Confirmation Hearings
09:32:22 AM SB194
05:15:31 PM SB64
05:46:51 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings TELECONFERENCED
State Assessment Review Board:
Benard Washington, Anchorage
Dennis Mandell, Salinas
*+ SB 194 TOURISM MARKETING BOARD TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 64 OMNIBUS CRIME/CORRECTIONS BILL TELECONFERENCED
Moved CSSB 64(FIN) Out of Committee
SENATE BILL NO. 194                                                                                                           
                                                                                                                                
     "An  Act creating  the Alaska  Tourism Marketing  Board                                                                    
     and relating to tourism marketing."                                                                                        
                                                                                                                                
9:32:22 AM                                                                                                                    
                                                                                                                                
SENATOR LESIL MCGUIRE, explained SB 194. She referred to                                                                        
the Sponsor Statement (copy on file).                                                                                           
                                                                                                                                
     SB 194 creates  a structure for marketing  by the State                                                                    
     of Alaska  and develops  a funding intent  formula that                                                                    
     can    be   supported    by   the    legislature,   the                                                                    
     administration,  and   the  private  sector,   so  that                                                                    
     tourism marketing is professionally led and managed.                                                                       
                                                                                                                                
     The Alaska  tourism board would  be created  in statute                                                                    
     and  comprised  of a  minimum  of  twenty one  members.                                                                    
     Eighteen  of those  would be  recommended by  ATIA, one                                                                    
     member of  the board  from the Department  of Commerce,                                                                    
     Community  and Economic  Development, one  member would                                                                    
     be appointed  from the House, and  one member appointed                                                                    
     from the Senate.                                                                                                           
                                                                                                                                
     Tourism continues  to be a growing,  renewable industry                                                                    
     that is the second largest  employer in the state. Over                                                                    
     1.9 million visitors came to  Alaska from October 2012-                                                                    
     September 2013 spending over  1.8 billion dollars. This                                                                    
     bill is an  important step in continuing  the growth of                                                                    
     one of our most important industries.                                                                                      
                                                                                                                                
Senator  McGuire   noted  that  tourism  in   Alaska  was  a                                                                    
statewide  issue. The  marketing  for a  tourist across  the                                                                    
state  varied  area  to  area,   and  there  were  different                                                                    
categories for each tourist.                                                                                                    
                                                                                                                                
                                                                                                                                
Senator McGuire  noted that  there was  a zero  fiscal note,                                                                    
because there was money that  was already allocated to cover                                                                    
the cost of tourism marketing in the state.                                                                                     
                                                                                                                                
Senator McGuire  outlined the sections of  the bill. Section                                                                    
1 addressed  the purposes  of the  board, which  stated that                                                                    
expansion and  growth of the  state's visitor  industry will                                                                    
benefit all of Alaska. She  stated that the TAPS revenue was                                                                    
declining, and  the benefits for increasing  new development                                                                    
were still  unknown. She stressed that  Alaska must continue                                                                    
to diversify  its economy. She  shared that the  board would                                                                    
help  to  increase  the  number  of  job  opportunities  and                                                                    
training   for   Alaskans.    Section   2   formalized   the                                                                    
relationship between  Department of Commerce,  Community and                                                                    
Economic Development (DCCED) and  the board. She stated that                                                                    
there were different governors  with different emphases over                                                                    
the  years. The  section's  intent was  to  ensure that  the                                                                    
board would  stay intact through  perpetuity. Section  3 set                                                                    
up  the  board.  There  would be  at  least  three  nominees                                                                    
submitted  by  Alaska  Travel Industry  Association  (ATIA),                                                                    
because there  was an  effort to  not politicize  the board.                                                                    
The  board's focus  would be  tourism marketing  for Alaska.                                                                    
The board  would meet at least  twice a year. She  looked at                                                                    
page 4,  which addressed  the rotation  of terms  to reflect                                                                    
some  institutional knowledge.  There would  be six  members                                                                    
who would serve three terms;  six members serving two terms;                                                                    
and six members serving for one term.                                                                                           
                                                                                                                                
9:39:34 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  stated that  the committee  was apprehensive                                                                    
about  creating new  boards and  commissions.  He felt  that                                                                    
this  board seemed  to be  different, and  that the  tourism                                                                    
industry  should be  exploited. He  wondered if  the sponsor                                                                    
would be amenable  for a sunset date and allow  the board to                                                                    
be audited. Senator McGuire replied in the affirmative.                                                                         
                                                                                                                                
Co-Chair Meyer  looked at  page 4, and  noted there  were 21                                                                    
members, and wondered what would  happen to the other three.                                                                    
Senator  McGuire explained  that those  three members  would                                                                    
follow their appointment.                                                                                                       
                                                                                                                                
Co-Chair  Meyer   noted  that   he  was  unsure   about  the                                                                    
commissioner appointments.  Senator McGuire stated  that the                                                                    
DCCED commissioner  or their designee  should be  a constant                                                                    
presence on the board.                                                                                                          
                                                                                                                                
Co-Chair Meyer  queried the effective date.  Senator McGuire                                                                    
responded that the effective date  would be based on whether                                                                    
the industry would want an immediate effective date.                                                                            
                                                                                                                                
Co-Chair  Kelly looked  at Section  3,  and appreciated  the                                                                    
value   of  elected   individuals   in  choosing   appointed                                                                    
individuals.                                                                                                                    
                                                                                                                                
9:44:28 AM                                                                                                                    
                                                                                                                                
Senator  Olson felt  that a  large board  would result  in a                                                                    
cumbersome work, and  work may be slowed down  because of so                                                                    
many personalities.  Senator McGuire replied that  there was                                                                    
often  an exclusion  of  one  region or  a  type of  tourism                                                                    
operator.  She  felt  that  including  all  aspects  of  the                                                                    
industry was essential to the functioning of the board.                                                                         
                                                                                                                                
Senator Hoffman  looked at page  2, line 31, and  noted that                                                                    
18 members  would represent different regions  of the state.                                                                    
He wondered  if there could  be an additional  language that                                                                    
specifies, "including,  but not limited to,  the Arctic, the                                                                    
Interior,  the  Southcentral,   Southeast,  and  Southwest."                                                                    
Senator McGuire replied that she  would love to include that                                                                    
specification.                                                                                                                  
                                                                                                                                
Senator  Bishop  would  like  some  assurance  that  the  18                                                                    
members  held  some  smaller   operators  as  well.  Senator                                                                    
McGuire replied that the intent  was to include some smaller                                                                    
businesses, and  many letters  of support  indicated similar                                                                    
requests for inclusion on the board.                                                                                            
                                                                                                                                
9:49:10 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough looked  at page 3, line  16, and noted                                                                    
the requirement  for a  quorum. She  wondered if  that would                                                                    
create a  challenge depending on  travel. She felt  that the                                                                    
quorum may be hard to reach,  because of the large number of                                                                    
members  and  possible  conflicts  or  constraints.  Senator                                                                    
McGuire replied that she was  open to the change in language                                                                    
related to quorum requirements.                                                                                                 
                                                                                                                                
Senator  McGuire explained  that  travel and  per diem  were                                                                    
only  paid   for  the  two   legislative  members   and  the                                                                    
commissioner.                                                                                                                   
                                                                                                                                
BILL PEDLAR,  CHAIR, GOVERNMENT RELATIONS  COMMITTEE, ALASKA                                                                    
TRAVEL   INDUSTRY   ASSOCIATION,  introduced   himself.   He                                                                    
testified in support of SB  194, and remarked that diversity                                                                    
in the  travel industry  made the  industry very  strong. He                                                                    
felt  that   the  marketing  board  should   represent  that                                                                    
diversity. He stressed that the  industry was careful to not                                                                    
get too  specific. He remarked  that achieving a  quorum had                                                                    
never been  a problem. He  felt that  the size of  the board                                                                    
allowed for  a wide  range of inputs  and values  related to                                                                    
Alaska tourism.                                                                                                                 
                                                                                                                                
Senator Olson queried the Mr.  Pedlar's opinion on inserting                                                                    
a  sunset into  the legislation.  Mr. Pedlar  responded that                                                                    
that it was good business  to include a sunset date, because                                                                    
everything deserves to be reviewed.                                                                                             
                                                                                                                                
9:55:43 AM                                                                                                                    
                                                                                                                                
Senator Olson  queried a fair  number of years  to determine                                                                    
the effectiveness  of the board.  Mr. Pedlar replied  that a                                                                    
five or  six year  window would be  prudent. He  stated that                                                                    
marketing had a cumulative effect.                                                                                              
                                                                                                                                
Vice-Chair  Fairclough  remarked  that there  was  sometimes                                                                    
hesitation  in  setting  the  sunset   date  too  far  ahead                                                                    
initially, in  order to  prevent bad  habits. She  wanted to                                                                    
ensure  public  participation,   meeting  notification,  and                                                                    
handling  the investment  properly. She  supported a  sooner                                                                    
sunset  date of  the board.  She furthered  that there  were                                                                    
different  ways  of  establishing  quorums  on  boards,  and                                                                    
remarked that legislative members  may need to address state                                                                    
business of greater  priority. She wondered if  a quorum may                                                                    
be  met by  requiring at  least  one member  of each  region                                                                    
attending  the meeting,  rather than  basing a  quorum on  a                                                                    
majority  of  participants.  Mr. Pedlar  replied  that  nine                                                                    
voting  members attending  would be  fine for  a quorum.  He                                                                    
furthered  that   he  had   been  involved   in  cooperative                                                                    
marketing  in his  career, and  had  never had  an issue  in                                                                    
establishing  a  quorum.  He   stressed  that  the  industry                                                                    
members  would pay  their own  way to  attend the  meetings,                                                                    
which indicated a high level of commitment.                                                                                     
                                                                                                                                
10:00:32 AM                                                                                                                   
                                                                                                                                
ROBBIE   GRAHAM,  ASSISTANT   COMMISSIONER,  DEPARTMENT   OF                                                                    
COMMERCE,   COMMUNITY   AND   ECONOMIC   DEVELOPMENT,(DCCED)                                                                    
stressed   that   it   was  important   to   recognize   the                                                                    
collaboration with  the state and  the travel  industry. She                                                                    
shared  that  there  was   a  recent,  formal  collaboration                                                                    
through a Memorandum of Understanding  (MOU) that was signed                                                                    
in FY 12 and reiterated in FY  13. She felt that she and the                                                                    
DCCED commissioner were uniquely  qualified to implement the                                                                    
program based on their experiences  in the tourism industry.                                                                    
She stated  that the  tourism marketing  program was  in the                                                                    
Division of  Economic Development,  and she pointed  out the                                                                    
expertise of the leaders of those programs.                                                                                     
                                                                                                                                
Ms. Graham  highlighted some of  the accomplishments  of the                                                                    
tourism industry  marketing program. She stated  that summer                                                                    
visitation had reached  similar numbers to 2007  and 2008 at                                                                    
1.96  million visitors.  The annual  conversion rate  was 12                                                                    
percent, and pointed out that  over a four year period there                                                                    
was 30 percent  conversion rate. The state  had generated 16                                                                    
million  through the  public  relations  program and  Alaska                                                                    
tourism promotions  were recently published in  the New York                                                                    
Times and other broadcast and  social media. She stated that                                                                    
there  was  a  cultural  tourism  program,  and  focused  on                                                                    
Northwest Alaska. There  was a movement to  take the program                                                                    
statewide  in  the  next  years.  There  were  international                                                                    
efforts that were enacted to enhance the 2014 season.                                                                           
                                                                                                                                
CHRIS   PELOSO,  ATTORNEY,   DEPARTMENT   OF  LAW,   JUNEAU,                                                                    
explained some  technical problems with the  bill. He looked                                                                    
at page  2, line 30,  which read, "four members  from ATIA."                                                                    
He  stated  that traditionally  bills  did  not highlight  a                                                                    
specific  organization.   He  looked   at  language   in  AS                                                                    
43.98.040  which  involved   a  similar  organization.  That                                                                    
statute  stated  that "the  members  be  nominated from  the                                                                    
leading   nonprofit  trade   association."   He  felt   that                                                                    
specifying  a   specific  organization  runs  the   risk  of                                                                    
invalidating the  statute, if the organization  is dissolved                                                                    
at any  time. He also  looked at page  3, line 9,  Section 3                                                                    
which  gave power  to  appoint  members of  the  board to  a                                                                    
private organization  and only  gave the  governor a  form a                                                                    
veto  of  the  recommendations.  He  felt  that  it  was  an                                                                    
unconstitutional  limitation  of the  governor's  authority.                                                                    
Under  the Alaska  Constitution, the  governor was  the only                                                                    
appointing  authority,  unless  expressly addressed  in  the                                                                    
constitution itself.  The legislature could no  more provide                                                                    
to the governor to share power  with an agency created by it                                                                    
than it  can share the  power itself. He suggested  that the                                                                    
ability to appoint members solely rested with the governor.                                                                     
                                                                                                                                
10:08:21 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough   requested  amended   language.  Mr.                                                                    
Wilson suggested that the language  read, "have the governor                                                                    
appoint members."                                                                                                               
                                                                                                                                
Co-Chair  Meyer  wondered  if Ms.  Martin  agreed  with  the                                                                    
perspective of Mr. Peloso.                                                                                                      
                                                                                                                                
HILARY  MARTIN,  LEGISLATIVE  LEGAL  SERVICES,  JUNEAU  (via                                                                    
teleconference), replied that naming  the organization was a                                                                    
decision that  the legislature  should make.  She understood                                                                    
the  concern regarding  changing the  statute, if  ATIA were                                                                    
dissolved.  She   felt  that  there  was   no  clear  answer                                                                    
regarding  submitting a  list of  requested individuals  for                                                                    
the governor to choose from.                                                                                                    
                                                                                                                                
Senator Dunleavy  asked if boards  existed with  the similar                                                                    
processes outlined in the legislation.  Ms. Martin asked for                                                                    
clarity of the question.                                                                                                        
                                                                                                                                
Senator  Dunleavy   asked  if  the   governor  traditionally                                                                    
appointed individuals  based on  a list  of recommendations.                                                                    
Ms. Martin replied  that she believed that  there were other                                                                    
boards that  submitted lists, but  she could not  name those                                                                    
boards.                                                                                                                         
                                                                                                                                
Co-Chair  Meyer  encouraged the  sponsor  to  work with  the                                                                    
Department  of Law  to ensure  the constitutionality  of the                                                                    
legislation. Senator  McGuire replied  that she  was unaware                                                                    
of the opinion of the  Department of Law. She announced that                                                                    
Legislative Legal  had approved  the draft, and  was willing                                                                    
to  amend  the language  to  the  leading nonprofit  in  the                                                                    
industry. Regarding to the appointments,  she was willing to                                                                    
say  that the  list was  recommendations. She  stressed that                                                                    
the  recommendations  must be  submitted  by  the public  to                                                                    
ensure transparency.                                                                                                            
                                                                                                                                
SB  194  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:16:05 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:17:28 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:17:48 AM                                                                                                                   
RECESS                                                                                                                          
                                                                                                                                
5:14:52 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB194 sponsor statement.pdf SFIN 3/13/2014 9:00:00 AM
SB 194
Assessment Review - Mandell.pdf SFIN 3/13/2014 9:00:00 AM
Assessment Review - Washington.pdf SFIN 3/13/2014 9:00:00 AM
SB194-DCCED-DED-3-12-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 194
CS SB64 Explaination of Changes.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
CS SB64 Fiscal Note Comparison Version L&D.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
CS SB64 work draft version L.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
FN - SB 64 - AJC - 3-13-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-ACS-TRC-03-10-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-DHSS-ASAP-03-12-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-DHSS-ASAP-03-13-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-DHSS-ASS-03-11-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-DHSS-ASS-03-13-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(FIN)-DOC-OC-03-12-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
SB064CS(JUD)-ACS-TRC-02-17-14.pdf SFIN 3/13/2014 9:00:00 AM
SB 64
FN - SB 64 - AJC - 3-13-14 (2).pdf SFIN 3/13/2014 9:00:00 AM
SB 64