Legislature(1999 - 2000)

04/11/2000 01:55 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                HB 420-TOURISM MARKETING CONTRACTS                                                                          
                                                                                                                                
CHAIRMAN MACKIE announced HB 420 to be up for consideration.                                                                    
                                                                                                                                
MR.  JOE BALASH,  aide to  Representative  Therriault,  said HB  420                                                            
makes some  adjustments to a piece  of legislation that passed  last                                                            
year  (SB 107).    HB 420  will  require  DCED  to contract  with  a                                                            
qualified trade  association on or  before May of each fiscal  year.                                                            
Under the current  law, most negotiating  would be occurring  during                                                            
June and July, the peak  months of the tourism season.  To make that                                                            
change, new transition language had to be included in HB 420.                                                                   
                                                                                                                                
CHAIRMAN MACKIE  announced that a  Senate Labor and Commerce  CS was                                                            
drafted.                                                                                                                        
                                                                                                                                
SENATOR  LEMAN moved  to adopt  Version H  as the  Senate Labor  and                                                            
Commerce committee  substitute to HB 420.  There were  no objections                                                            
and it was so ordered.                                                                                                          
                                                                                                                                
MR. BALASH highlighted  the changes in the Senate Labor and Commerce                                                            
CS.  He said the contract  date is changed from August to April 1 in                                                            
Sections  1 and 2.  In  Section 3, the  transition language  directs                                                            
DCED to identify  and issue its central components  for the contract                                                            
by May  1 for the  FY01 contract.  The qualified  trade association                                                             
(QTA) would then  put together a marketing campaign  plan and submit                                                            
that to  DCED by June 15.   The format and  detail of the  marketing                                                            
campaign plan  should be similar to  DCED's FY00 action plan,  which                                                            
was the  best they  could come  up with.   The  contracts should  be                                                            
signed by July  1.  This addresses the concerns DCED  had with other                                                            
versions of this legislation.   In future years the transition steps                                                            
are not part of the legislation.                                                                                                
                                                                                                                                
SENATOR MACKIE  asked when  the central components  will have  to be                                                            
issued by.                                                                                                                      
                                                                                                                                
MR. BALASH replied by May 1.                                                                                                    
                                                                                                                                
CHAIRMAN MACKIE asked if the contract must be signed by July 1.                                                                 
                                                                                                                                
MR. BALASH said that is correct.                                                                                                
                                                                                                                                
CHAIRMAN MACKIE asked about future years.                                                                                       
                                                                                                                                
MR. BALASH  replied that in future  years the transition  steps will                                                            
not apply.                                                                                                                      
                                                                                                                                
CHAIRMAN  MACKIE asked what  will happen next  year in terms  of the                                                            
deadline.                                                                                                                       
                                                                                                                                
MR.  BALASH answered  that  the  deadline  is April  1,  2001 for  a                                                            
contract to be entered into for FY02.                                                                                           
                                                                                                                                
Number 1712                                                                                                                     
                                                                                                                                
SENATOR LEMAN noted that  the effective date failed in the House. He                                                            
asked if the new  transition language covers the challenges  so that                                                            
if this version passes the Senate, it will pass the House.                                                                      
                                                                                                                                
MR. BALASH said  his understanding of why the effective  date failed                                                            
is that  DCED and members  of the minority  felt that May 1  for the                                                            
current  negotiations is  too soon.   That date  was then pushed  to                                                            
July 1, which DCED staff said would be acceptable.                                                                              
                                                                                                                                
MS. GINNY FAY,  Deputy Director of the Division of  Tourism, had not                                                            
seen the committee  substitute but,  after a quick review,  said she                                                            
did not see a  problem with the deadlines.  This year  DCED actually                                                            
gave the  QTAs the essential  components during  the second  week of                                                            
February.   She thought that DCED  would give the components  to the                                                            
qualifying  associations earlier next  year.  She noted DCED  always                                                            
hoped to have  a contract signed by July 1 and that  the Legislature                                                            
chose the August 1 date.                                                                                                        
                                                                                                                                
MS. ANN  CAMPBELL,  Chair of the  Alaska Travel  Association  (ATA),                                                            
stated support for the  committee substitute.  She said that April 1                                                            
is an important  date for them and she thought they  could work with                                                            
the June  15 deadline to  get the campaign  to DCED in time  to sign                                                            
the contracts by July 1.                                                                                                        
                                                                                                                                
CHAIRMAN MACKIE  asked if she could comment on the  whole process of                                                            
meeting with DCED. He said  his understanding is that the industry's                                                            
membership drive is going very well.                                                                                            
                                                                                                                                
MS. CAMPBELL  responded that it is  a little early, but that  things                                                            
seem to  be working well  regarding new members.   The ATA  has some                                                            
fundamental  differences  with the  DCED in  terms of  the level  of                                                            
detail  that  has to  go  into marketing  plans  and  contracts  and                                                            
fundamental  differences in terms  of decision making.  She  did not                                                            
know how long  the process will really take.  The  ATA has agreed to                                                            
some of  the "big picture"  goals  for the program  but how  long it                                                            
will take  to grind out the  details of the  contract remains  to be                                                            
seen.  ATA is  committed to having its marketing plan  ready by June                                                            
15.                                                                                                                             
                                                                                                                                
SENATOR MACKIE  asked Ms.  Fay if she saw  any major obstacles  that                                                            
might cause a problem regarding the contract.                                                                                   
                                                                                                                                
MS. FAY answered  that the ATA has had the components  and goals for                                                            
two  months.   They have  been  meeting to  discuss  how to  measure                                                            
success.  She did not think  DCED could move forward to put together                                                            
a contract  until she sees a marketing  plan, which will  take time.                                                            
That is what she is waiting for.                                                                                                
                                                                                                                                
SENATOR  MACKIE asked  if  she thought  that could  be accomplished                                                             
under the time line in the bill.                                                                                                
                                                                                                                                
MS. FAY  said it is  a pretty tight  time line.   She commented  the                                                            
June  15 deadline  to submit  a marketing  plan will  give DCED  two                                                            
weeks for  review which is  very tight.  She  stated she would  like                                                            
the deadline  for the  marketing plans  to be  earlier to give  DCED                                                            
more  time,  especially  since  the  components   were  provided  in                                                            
February.                                                                                                                       
                                                                                                                                
CHAIRMAN  MACKIE said he  was the prime sponsor  of the legislation                                                             
last year and  it was clearly the intent of the legislature  to turn                                                            
over the marketing to this  group.  He hoped that DCED is not trying                                                            
to exercise  all the controls it had  before and that it  will allow                                                            
the group to do the marketing.                                                                                                  
                                                                                                                                
MS. FAY stated it is the  Legislature's prerogative.  She reiterated                                                            
that it is a short  amount of time given the level  of importance of                                                            
the issue.                                                                                                                      
                                                                                                                                
CHAIRMAN MACKIE  asked, in terms of the makeup of  the organization,                                                            
how  she felt  about the  concerns  DCED had  about  the small  tour                                                            
operators.                                                                                                                      
                                                                                                                                
MS. FAY said that  the sectors had been represented,  although there                                                            
were comments that rural Alaska hadn't been represented.                                                                        
                                                                                                                                
SENATOR LEMAN  asked what a more reasonable  time frame would  be to                                                            
review the plan and prepare the contract.                                                                                       
                                                                                                                                
MS. FAY replied  that she hoped to see a marketing  plan before June                                                            
15.  She suggested June 1.                                                                                                      
                                                                                                                                
SENATOR LEMAN  thought more time would  be reasonable and  suggested                                                            
rolling the other dates back.                                                                                                   
                                                                                                                                
CHAIRMAN  MACKIE commented  that the transition  dates were  changed                                                            
because of  the concerns DCED had  about not being able to  meet the                                                            
original  deadlines.   He said the  industry and  trade groups  will                                                            
write the marketing contract  and do the marketing.  If one believes                                                            
DCED will be  doing that, the bill  should not have been  introduced                                                            
in the first  place.  He asked Ms.  Campbell to comment on  the fact                                                            
that she  requested  the CS to  accommodate concerns  DCED had  with                                                            
meeting the original deadlines.                                                                                                 
                                                                                                                                
MR. BALASH said  that is correct and explained the  June 15 date was                                                            
given as a yardstick and  the May 1 deadline was offered to give the                                                            
QTA  six weeks  to finalize  a  marketing  plan together  after  the                                                            
components  are  determined.    The  ATA's  hope was  that  the  QTA                                                            
membership  at large could comment  on this which is why  the longer                                                            
period of time  was thought to be  beneficial to the small  business                                                            
owners.                                                                                                                         
                                                                                                                                
CHAIRMAN  MACKIE said his  understanding was  that there has  been a                                                            
huge response  in terms of the membership  wanting to be  part of it                                                            
but  there  is  still   a  significant  portion  of  the   potential                                                            
membership that first wants  to see what the marketing contract will                                                            
look like.  He  pointed out they are having to build  support within                                                            
the potential membership  and craft a contract that is acceptable to                                                            
the State based on the essential components.                                                                                    
                                                                                                                                
TAPE 00-14, SIDE B                                                                                                            
Number 2400                                                                                                                     
                                                                                                                                
MS. FAY said she is confused  because although DCED already produced                                                            
the essential  components in early February, it appears  to say they                                                            
might have to be redone.                                                                                                        
                                                                                                                                
MR. BALASH replied  that he was under the impression  there had been                                                            
some negotiations  between  industry and the  Department about  what                                                            
the components  would be.  The intent of the sponsor  is to have the                                                            
components  finalized  by May 1  and then  to give  the industry  an                                                            
opportunity   to  develop  the  marketing   plan  and  allow   their                                                            
membership to see it and comment.                                                                                               
                                                                                                                                
CHAIRMAN  MACKIE  said  if  there  are any  other  issues  with  the                                                            
Department,  the date certain  of May 1 gives  the QTA six  weeks to                                                            
put together a  marketing plan and present it to its  membership for                                                            
approval.   After that, there  will be a couple  of weeks to  do the                                                            
negotiating and sign the contract.                                                                                              
                                                                                                                                
MR. BALASH agreed with that.                                                                                                    
                                                                                                                                
MS. FAY noted  the ATA Board adopted  the components given  to it by                                                            
DCED  on February  17.   She  questioned  whether  this legislation                                                             
undoes that process.                                                                                                            
                                                                                                                                
CHAIRMAN MACKIE  said it does not,  it just provides two  more weeks                                                            
to address  anything  else that remains  unresolved.   He noted  the                                                            
marketing plan  could be submitted much earlier than  June 15 unless                                                            
DCED comes up with more issues.                                                                                                 
                                                                                                                                
MS. FAY said she just wanted  to be clear about whether she is being                                                            
asked to redo  something she is already done because  someone is not                                                            
happy with what she has done.                                                                                                   
                                                                                                                                
CHAIRMAN MACKIE said he  is not aware of what she has given them and                                                            
he has not  asked.  He pointed out  if she feels she has  given them                                                            
all of the  components then  the May 1 deadline  means nothing.   He                                                            
said everyone  is interested  in the  same end result  so it  is not                                                            
necessary to read things into the dates.                                                                                        
                                                                                                                                
SENATOR HOFFMAN  asked how the time lines affect the  signing of the                                                            
contract as they  relate to fundraising the matching  funds required                                                            
for the contract.                                                                                                               
                                                                                                                                
Number 2216                                                                                                                     
                                                                                                                                
MS.  CAMPBELL  replied  that  they  are on  track  for  raising  the                                                            
required 30% matching funds  (around $2 million).  The issue is when                                                            
they will contribute  the match to the program.  Some  of it will be                                                            
raised in the  spring and summer and  some of it would be  raised in                                                            
the fall and winter.                                                                                                            
                                                                                                                                
CHAIRMAN MACKIE  said they will not get the dollars  until they have                                                            
the match, whether  it is in installments or whatever  they work out                                                            
with the  Department.  He  pointed out there  are no set time  lines                                                            
because it takes time to raise that kind of money.                                                                              
                                                                                                                                
SENATOR  LEMAN moved  to pass  SCSHB  420(L&C) from  committee  with                                                            
individual recommendations.   There were no objections and it was so                                                            
ordered.                                                                                                                        

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