Legislature(2011 - 2012)BARNES 124
03/24/2011 10:15 AM House ECON. DEV., TRADE & TOURISM
| Audio | Topic |
|---|---|
| Start | |
| HB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 160 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
March 24, 2011
10:23 a.m.
MEMBERS PRESENT
Representative Bob Herron, Chair
Representative Neal Foster
Representative Wes Keller
Representative Cathy Engstrom Munoz
Representative Steve Thompson
Representative Berta Gardner
Representative Chris Tuck
MEMBERS ABSENT
Representative Kurt Olson, Vice Chair
Representative Reggie Joule
COMMITTEE CALENDAR
HOUSE BILL NO. 160
"An Act establishing and relating to the Alaska visitor industry
investment fund; relating to matching funds for state tourism
marketing contracts with qualified trade associations; and
providing for an effective date."
- MOVED CSHB 160(EDT) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 160
SHORT TITLE: TOURISM MARKETING CONTRACTS/CAMPAIGNS
SPONSOR(s): ECON. DEV., TRADE & TOURISM
02/16/11 (H) READ THE FIRST TIME - REFERRALS
02/16/11 (H) EDT, FIN
03/01/11 (H) EDT AT 10:15 AM BARNES 124
03/01/11 (H) Heard & Held
03/01/11 (H) MINUTE(EDT)
03/08/11 (H) EDT AT 10:15 AM BARNES 124
03/08/11 (H) Heard & Held
03/08/11 (H) MINUTE(EDT)
03/24/11 (H) EDT AT 10:15 AM BARNES 124
WITNESS REGISTER
ROB EARL, Staff
Representative Bob Herron
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the proposed committee substitute
(CS) for HB 160 on behalf of the House Special Committee on
Economic Development, International Trade and Tourism.
SUSAN BELL, Commissioner
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
160.
TERRY BANNISTER, Attorney
Legislative Legal Counsel
Legislative Legal and Research Services
Legislative Affairs Agency
Juneau, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 160.
JOHANNA BALES, Deputy Director
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered a question during the hearing on
HB 160.
CAMILLE FERGUSON, Economic Development Director
Tribal Tours
Sitka Tribe of Alaska
Sitka, Alaska
POSITION STATEMENT: Testified in support of HB 160.
DEB HICKOK, Chair
Board of Directors
Alaska Travel Industry Association (ATIA); President and CEO
Fairbanks Convention & Visitors Bureau
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 160.
ACTION NARRATIVE
10:23:41 AM
CHAIR BOB HERRON called the House Special Committee on Economic
Development, International Trade and Tourism meeting to order at
10:23 a.m. Representatives Herron, Munoz, Thompson, Gardner,
Tuck, and Keller were present at the call to order.
Representative Foster arrived as the meeting was in progress.
HB 160-TOURISM MARKETING CONTRACTS/CAMPAIGNS
10:24:16 AM
CHAIR HERRON announced that the only order of business would be
HOUSE BILL NO. 160, "An Act establishing and relating to the
Alaska visitor industry investment fund; relating to matching
funds for state tourism marketing contracts with qualified trade
associations; and providing for an effective date."
10:24:30 AM
The committee took an at-ease from 10:24 a.m. to 10:26 a.m. due
to technical difficulties.
10:26:42 AM
REPRESENTATIVE MUNOZ moved to adopt the proposed committee (CS)
for HB 160, Version 27-LS0509\R, Bannister, 3/23/11, as the
working document.
CO-CHAIR HERRON objected for the purpose of discussion.
[Although there was an objection, the intent was to have Version
R before the committee.]
10:27:00 AM
ROB EARL, Staff, Representative Bob Herron, Alaska State
Legislature, presented the proposed committee substitute (CS)
for HB 160 on behalf of the House Special Committee on Economic
Development, International Trade and Tourism. Mr. Earl stated
that the proposed committee substitute (CS) for HB 160, labeled
27-LS0509\R, has four major changes in Section 1: 1. The date
the contract must be signed is June 1 instead of April 1 to
allow the Department of Commerce, Community & Economic
Development (DCCED) time to develop its budget; 2. The state is
responsible for two-thirds of the marketing contract and the
qualifying trade organization (QTA) is responsible for one-
third; 3. A maximum of $12 million of state money can be
allocated to the marketing contract; 4. The QTA can satisfy its
one-third contribution with in-kind contributions. He then
addressed Section 3, which is a new section creating the Alaska
Promotion and Marketing Task Force consisting of 11 members.
10:28:41 AM
CHAIR HERRON suggested that the committee propose an amendment
adding alternates to the House membership of the task force.
MR. EARL explained that the task force shall develop and
recommend model legislation to market and promote activities to
support the state's economy. The model legislation will include
a board to evaluate proposals to promote and market the
industries and economies of the state, and to make
recommendations to the legislature for funding of proposals.
Finally, the task force will report to the legislature by
1/30/12.
CO-CHAIR HERRON advised that the House majority leader urged
this task force concept.
10:30:19 AM
MR. EARL continued to Section 5, which directs that Section 2
will only take effect if the legislature does not pass
legislation based on the model legislation recommended by the
task force; however, if Section 2 does take effect, the state
and QTA contributions return to a one-to-one match for the costs
of the marketing campaign.
REPRESENTATIVE GARDNER expressed her preference for the CS.
REPRESENTATIVE TUCK asked for an explanation of the change of
date from April 1 to June 1.
MR. EARL said, "Basically now [DCCED is] signing the contract
during session; we think this will make it a little easier on
them."
10:31:48 AM
REPRESENTATIVE GARDNER asked why there is a limit of $12 million
on the state contribution.
CO-CHAIR HERRON explained that this is part of a formula that
fits within the ability of the QTA to match the state
contribution. In further response to Representative Gardner, he
said the formula concept would be discussed during testimony by
DCCED.
REPRESENTATIVE THOMPSON agreed the CS is better than inaction,
but there is still a reduction in marketing funds that are
available to market Alaska for tourism. Furthermore, this
funding is a small amount compared to the competition from other
states. He also cautioned that the legislation is confusing.
CHAIR HERRON clarified that the funding is not a 50 percent
match, but for every dollar contributed by the QTA, the state
will contribute two dollars. In further response to
Representative Thompson, he pointed out that without a change,
"On July 1, we are under 50/50, under current law."
10:34:41 AM
MR. EARL restated that - as directed by Section 5 - Section 2
only goes into effect if the legislature does not pass
legislation based on the model legislation.
CHAIR HERRON pointed out that the model legislation expected
from the task force will be debated next session; however, there
are two caveats: the legislature may not pass the model
legislation, or the governor may veto the model legislation.
Either of those events would cause the funding to revert to a 50
percent state and 50 percent QTA match.
10:35:27 AM
REPRESENTATIVE TUCK asked for examples of "in-kind
contributions."
CO-CHAIR HERRON deferred to DCCED.
10:35:47 AM
SUSAN BELL, Commissioner, Department of Commerce, Community &
Economic Development (DCCED), informed the committee the
governor is consistent in his intent that tourism marketing
maintains last year's level of funding at $16 million; in fact,
rather than offering amendments to HB 160, he has stated his
interest in working with the legislature on legislation, or in
appropriations through the operating or capital budgets. She
pointed out that the state is furthering its support of the
tourism industry by increased marketing, competitive taxes and
regulatory procedures, and by reaching out to the industry in
order to help recover from recent losses of visitors and related
jobs. Current signs of recovery include an increase in visitors
and in the deployment of cruise ships. Commissioner Bell opined
marketing is a key piece of the recovery. She called attention
to Section 1 on page 2, beginning on line 4, and explained that
in-kind contributions include products such as air
transportation, tour products, meals, hotels, and hosting tour
operators and travel writers. Commissioner Bell suggested an
amendment which read [original punctuation provided]:
Page 2, line 6, following "contributions"
Insert "through its members"
Page 4, line 3 through line 12:
Delete all material.
Insert new bill sections to read:
"Section 5. Section 2 of this Act takes effect on
July 1, 2013.
Section 6. Except as provided in sec. 5 of this
Act, this Act takes effect on July 1, 2011."
10:41:04 AM
REPRESENTATIVE TUCK asked for an example of an "event
participation" that would apply to the in-kind contribution.
COMMISSIONER BELL deferred to the Alaska Travel Industry
Association (ATIA).
CO-CHAIR HERRON restated part of the amendment and requested an
opinion from Legislative Legal and Research Services,
Legislative Affairs Agency.
TERRY BANNISTER, Attorney, Legislative Legal Counsel,
Legislative Legal and Research Services, Legislative Affairs
Agency, advised that she was unable to judge the amendment
immediately.
CHAIR HERRON labeled the amendment Conceptual Amendment 1.
10:43:45 AM
REPRESENTATIVE MUNOZ moved to adopt Conceptual Amendment 1.
There being no objection, it was so ordered.
COMMISSIONER BELL called attention to the fiscal note that
reflects $12 million from the general fund in anticipation of a
combination of cash and in-kind contributions from the industry.
She said the tourism industry is highly motivated to achieve the
maximum benefit from the state.
10:45:14 AM
REPRESENTATIVE TUCK returned to the issue of in-kind
contributions and noted the value of the aforementioned is
unknown, and may approach the amount of $4 million, which would
take the state to its limit of $12 million.
10:46:16 AM
CHAIR HERRON provided an example of a QTA contribution of $3
million - that would equal $6 million. Thus, adding in-kind
contributions to that amount could generate two additional
dollars for each one dollar.
REPRESENTATIVE TUCK surmised that the unknown value of in-kind
contributions also makes the relationship to the state's
obligation unknown. He cautioned about adding a variable figure
with the $12 million and said, "I just want to make sure that
everything is going to covered that needs to be covered, and how
much we are going to be ... how much of a change from $3 million
is this going to create."
CHAIR HERRON acknowledged the legislation would allow the QTA to
get more state match based upon legitimate contributions.
REPRESENTATIVE GARDNER asked who would determine the values of
event participation, research, or services.
10:48:20 AM
COMMISSIONER BELL responded that there are industry standards on
the values of television airtime and print advertising presently
used by DCCED. She advised that the department would look for
guidance from other states, in addition to negotiating those
items with the QTA.
CHAIR HERRON assumed this would involve a regulatory process.
COMMISSIONER BELL, upon advice from the Department of Law,
indicated regulations would be needed.
REPRESENTATIVE MUNOZ clarified that the maximum amount of the
contract could be $18 million, with the state's share of $12
million and the "local" share a combination of cash and in-kind
contributions of up to $6 million.
10:50:17 AM
COMMISSIONER BELL concurred, and pointed out the intention to
have tourism marketing funding come through the operating
budget.
REPRESENTATIVE MUNOZ referred to page 2 of the CS, and noted
that the language only mentions in-kind contributions. She
asked whether "cash" should be added.
COMMISSIONER BELL observed the language on page 1, Subsection
(a), describes cash payment.
CHAIR HERRON asked the Department of Revenue to comment on
whether a new fiscal note is needed.
JOHANNA BALES, Deputy Director, Tax Division, Department of
Revenue (DOR), said no, the CS has no effect on DOR.
10:52:04 AM
REPRESENTATIVE GARDNER asked - based on the experiences of other
states - whether DCCED has an idea of what the proportion of in-
kind contributions to cash contributions is anticipated.
COMMISSIONER BELL said she did not, but will share what she
finds out.
REPRESENTATIVE TUCK asked who will be developing the regulations
on in-kind contributions.
COMMISSIONER BELL answered DCCED.
10:53:40 AM
CAMILLE FERGUSON, Economic Development Director, Tribal Tours,
Sitka Tribe of Alaska, expressed her support for ATIA marketing
ventures, and said she was testifying on behalf of the Sitka
Tribe and its efforts to market cultural tourism throughout
Alaska. She said it is essential that ATIA marketing funding is
as high as possible to help her company compete with tribes in
other states that are entering the tourism market. Her company
is a member of ATIA, and she cautioned that if ATIA marketing is
not funded, its fees to those members in small communities will
be increased. Ms. Ferguson agreed with the recommendations of
the commissioner and stated that in-kind contributions will be a
demonstration of each community's investment in the tourism
industry.
10:56:57 AM
DEB HICKOK, Chair, Board of Directors, Alaska Travel Industry
Association (ATIA); President and CEO, Fairbanks Convention &
Visitors Bureau, explained that she could not speak for the ATIA
board on the CS for HB 160, as the board had not discussed this
issue. Regarding in-kind contributions, she noted that the
Fairbanks Convention & Visitors Bureau (FCVB) currently pays
$32,000 to ATIA in cash and approximately $170,000 in
cooperative marketing programs; for example, FCVB may pay staff
to attend an international travel event in addition to their
airfare, hotel, other travel expenses, and sales calls.
11:00:23 AM
REPRESENTATIVE TUCK asked whether staff time is "loaned employee
value."
MS. HICKOK indicated yes. In further response to Representative
Tuck, she said free services may include familiarization tours
for international tour operators - often with donated hotel
rooms. There are also giveaways and tokens provided by the
industry for distribution at trade shows.
REPRESENTATIVE TUCK reviewed the cash and in-kind contributions
made by FCVB of $170,000 and $32,000, and concluded that the
total value may be higher.
MS. HICKOK clarified that $200,000 is part of the current match,
and the other is in addition.
11:02:12 AM
CHAIR HERRON reminded the committee that a regulatory process
will define the value, using "a common sense approach."
CHAIR HERRON closed public testimony.
11:03:00 AM
CHAIR HERRON returned attention to Section 3 on page 2. He
endorsed the House majority leader's idea for the Alaska
Promotion and Marketing Task Force; however, he urged the
addition of alternate members to ensure full attendance at all
meetings. Chair Herron suggested the addition of three
alternates for the House and one for the Senate.
11:04:02 AM
REPRESENTATIVE KELLER moved to adopt Conceptual Amendment 2,
adding three alternate members representing the House, and one
alternate member representing the Senate. There being no
objection, it was so ordered.
REPRESENTATIVE GARDNER expressed her concern about the possible
unintended consequences of the in-kind contributions; for
example, a small tourism business can participate in trade shows
independently, or as a member of ATIA, but ATIA members earn
credit from the state. The state's efforts in a marketing
program should encourage others - and thereby increase
participation - not just benefit those who are already
participants. She said, "I'm just not certain that we're
getting there with this, we may be changing behaviors in ways
that don't necessarily create any more impact toward our real
goal."
CHAIR HERRON concurred. He recalled that DCCED has been
requested to "watch it during regulation closely," and suggested
the committee work with the commissioner to establish parameters
in the legislation. Returning attention to Conceptual Amendment
2, he clarified that the intent of the amendment is that the
three members appointed by the Speaker of the House to the task
force will represent both caucuses of the House.
11:07:14 AM
REPRESENTATIVE MUNOZ referred to page 3, line 13, which directs
that the recommendations of the task force are to be made
annually, and asked whether the task force is an ongoing effort,
or only continues to a date certain.
CHAIR HERRON pointed out that on page 3, line 28, the bill
directs that the task force will terminate with the end of the
27th Legislative Session. During the interim and next session,
the task force will help with model legislation, perhaps through
the second interim.
11:08:21 AM
REPRESENTATIVE GARDNER moved to report the proposed CS for HB
160, Version 27-LS0509\R, Bannister, 3/23/11, as amended, from
committee with individual recommendations and the accompanying
fiscal note. There being no objection, CSHB 160(EDT) was
reported from the House Special Committee on Economic
Development, International Trade and Tourism.
11:09:11 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Economic Development, International Trade
and Tourism meeting was adjourned at 11:09 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CS HB 160 (R)omeo.pdf |
HEDT 3/24/2011 10:15:00 AM |
|
| HB160-CCED-DED-03-23-11.pdf |
HEDT 3/24/2011 10:15:00 AM |
HB 160 |