Legislature(1995 - 1996)

02/21/1995 02:35 PM House ITT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   HOUSE SPECIAL COMMITTEE ON                                  
                INTERNATIONAL TRADE AND TOURISM                                
                       February 21, 1995                                       
                           2:35 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Beverly Masek, Chairman                                        
 Representative Alan Austerman, Vice Chairman                                  
 Representative Jeannette James                                                
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
 Representative Brian Porter                                                   
 Representative Caren Robinson                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 * HB 180:   "An act relating to liquor licenses issued to a                   
             hotel, motel, resort, or similar establishment; and               
             providing for an effective date."                                 
                                                                               
             PASSED OUT OF COMMITTEE                                           
                                                                               
 Alaska Tourism Marketing Council Overview                                     
                                                                               
 (* First public hearing)                                                      
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE JEANNETTE JAMES                                                
 Alaska State Legislature                                                      
 State Capitol, Room 102                                                       
 Juneau, AK  99801                                                             
 Phone: 465-3743                                                               
 POSITION STATEMENT:  Prime Sponsor of HB 180                                  
                                                                               
 ROBERT DINDINGER, Vice Chair                                                  
 Alaska Tourism Marketing Council                                              
 Department of Commerce and Economic Development                               
 9085 Glacier Highway                                                          
 Juneau, AK   99801                                                            
 Phone: 789-0052                                                               
 POSITION STATEMENT:  Gave overview  of Alaska Tourism Marketing               
                      Council                                                  
                                                                               
 PREVIOUS ACTION                                                               
                                                                              
 BILL:  HB 180                                                               
 SHORT TITLE: LIQUOR LICENSES FOR RESORT/LODGES                               
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 02/15/95       369    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/15/95       369    (H)   ITT, CRA, L&C                                     
 02/21/95              (H)   ITT AT 02:30 PM CAPITOL 408                       
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE  95-3, SIDE A                                                            
 Number 004                                                                    
                                                                               
 The House Special Committee on International Trade & Tourism was              
 called to order by Chairman Beverly Masek at 2:35 p.m.  Members               
 present at the call to order were Representatives Masek,                      
 Austerman, James, Nicholia, Porter and Robinson.  Members absent              
 was Representative Kott.                                                      
                                                                               
 REPRESENTATIVE KOTT arrived directly after the call to order.                 
 HITT - 02/21/95                                                               
 HB 180 - LIQUOR LICENSES FOR HOTELS/RESORTS                                 
                                                                               
 Number 030                                                                    
                                                                               
 REPRESENTATIVE JEANNETTE JAMES, PRIME SPONSOR, stated that HB 180             
 was a direct result of Michael Tittle, owner of McClaren River                
 Lodge, and others being unable to obtain a liquor license within              
 the Mat-Su Borough as his lodge does not have at least 40 rooms.              
 This is a cooperative effort between remote lodge owners and the              
 Alcoholic Beverage Control (ABC) Board to correct an inequity.                
 Under current law, some small lodges which happen to be located               
 in a remote corner of a large unified population area cannot get              
 a liquor license.                                                             
                                                                               
 REPRESENTATIVE JAMES explained that the law now reads if a person             
 wants to develop a small lodge or tourist facility in a remote or             
 inaccessible area of the Mat-Su or Kenai Borough, the lodge would             
 be required to have 40 rental rooms to obtain a full-service                  
 liquor license.  This requirement is excessive and unfair.                    
 Without a liquor license, a lodge has very little chance of                   
 success.  This is not a liquor issue; this is an effort to remove             
 a roadblock created by an inequity in our laws.                               
                                                                               
 REPRESENTATIVE JAMES noted a letter from the ABC Board Director,              
 Patrick Sharrock (may be found in the House International Trade               
 and Tourism Committee Room, Capitol Building, Room 418, and after             
 adjournment of the second session of the 19th Alaska State                    
 Legislature, in the Legislative Reference Library).  She worked               
 with the ABC Board to draft this legislation and the ABC Board is             
 in support of it.  The ABC Board knew of this loophole, but there             
 wasn't anything the ABC Board could do about it.  The exact                   
 wording of this bill allows a liquor license to "a hotel, motel,              
 resort or similar business, that is inside a unified municipality             
 or organized borough, has at least ten rooms available to the                 
 public for rent, and from the nearest first or second-class city              
 or established village, cannot be reached by highway, or could be             
 reached by highway during no more than 10 of the 12 months in the             
 calendar year preceding the year in which the issuance or                     
 transfer is requested; in this paragraph, `highway' has the                   
 meaning given in AS 28.40.100."                                               
                                                                               
 Number 089                                                                    
                                                                               
 REPRESENTATIVE BRIAN PORTER asked if she wanted to say on line 8,             
 page two "a hotel, motel, resort, or similar business `outside' a             
 unified municipality..."                                                      
                                                                               
 REPRESENTATIVE JAMES responded that's the problem.  The existing              
 law says if you are within a municipality, that [status] dictates             
 how many rooms you have to have.  There's not a problem currently             
 with the people outside of an organized borough.  Had Tittle's                
 lodge been a mile further north, he would've been in the Denali               
 borough.  That borough's population is so low that he would have              
 been able to get a license.  The law is established by the                    
 population within the municipality.                                           
                                                                               
 REPRESENTATIVE PORTER expressed concern for the effect on his                 
 district.                                                                     
                                                                               
 REPRESENTATIVE JAMES doubted that a small business in Anchorage               
 would meet the accessibility criteria that this bill covers.  She             
 reiterated the ABC Board's support.                                           
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN took exception to the sponsor's                 
 statement that lodges aren't likely to succeed without liquor                 
 licenses; that's not the case.  Secondly, he had a lodge within               
 his district that applied for a license.  The problem was that                
 the lodge was within a 20 minute-skiff ride from one of the                   
 villages.  The village didn't have a liquor license within it and             
 didn't want one that close.                                                   
                                                                               
 Number 147                                                                    
                                                                               
 REPRESENTATIVE JAMES said that since those villages have                      
 populations of less than 1500, this bill doesn't change anything              
 for them.  She recognized that the villages, as part of the                   
 Kodiak borough, would be held to the minimum number of rooms for              
 Kodiak's population and then conceded that this bill may                      
 adversely affect his district.                                                
                                                                               
 REPRESENTATIVE AUSTERMAN said this bill lets anyone with 10 rooms             
 available to the public obtain a liquor license.                              
                                                                               
 REPRESENTATIVE JAMES stressed that any issuance is an ABC Board               
 decision, it's not automatic.  In Tittle's case, the ABC Board                
 was willing to issue the license, but was unable to under the                 
 existing law.  Although someone might qualify, the ABC Board                  
 could still deny it.  She emphasized they're only reducing the                
 number of rooms that one has to provide to the traveling public.              
                                                                               
 REPRESENTATIVE CAREN ROBINSON affirmed that the ABC Board makes               
 thoroughly-researched decisions and feels that this is a minor                
 change.                                                                       
                                                                               
 REPRESENTATIVE PORTER would like to hear from the ABC Board.  He              
 agrees that while normal licensing has to meet many stringent                 
 requirements, this particular license is a convenience license as             
 it is an exception to nine-tenths of those requirements.  Once                
 someone qualifies under this provision, i.e., the licensee is a               
 felon, he'll get the license.                                                 
                                                                               
 Number 215                                                                    
                                                                               
 REPRESENTATIVE JAMES felt there's not a case wherein a license                
 would be granted by the ABC Board over area residents'                        
 objections/opposition.                                                        
                                                                               
 REPRESENTATIVE PORTER responded that the way this is crafted, the             
 ABC Board doesn't have a choice.  In his experience, the board                
 would only be beholden to meeting the requirement of the statute.             
 If the statute requirements are met, that's it.  A hundred people             
 living in close proximity not liking it are not included for                  
 consideration by the ABC Board in this bill.                                  
                                                                               
 CHAIRMAN BEVERLY MASEK noted that this bill will encourage                    
 economic development of small businesses in rural areas and offer             
 incentives to tourists.  She referenced the letter from Pat                   
 Sharrock and the support of the ABC Board.  She asked                         
 Representative Porter what additional information he wanted from              
 the Board.                                                                    
                                                                               
 Number 269                                                                    
                                                                               
 REPRESENTATIVE PORTER wanted to know if this bill would provide               
 someone in Anchorage with the opportunity to get a liquor license             
 they otherwise would not be able to get.  He doesn't want to pass             
 a law that accommodates one person that has an adverse impact on              
 ten others.                                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN concurred in wanting to clarify his                  
 concern with the ABC Board.                                                   
                                                                               
 REPRESENTATIVE PETE KOTT reflected that this is a fairly isolated             
 case.  He further stated that under AS 04.11.400(d) it says, "The             
 board `may' approve the issuance..."; it doesn't say shall.  If               
 those questions need to be answered by the ABC Board, they will               
 be resolved in Labor and Commerce.  They don't need to hold it up             
 in this special committee.                                                    
                                                                               
 REPRESENTATIVE IRENE NICHOLIA felt the committee should resolve               
 the questions before the ABC Board before passing it out of                   
 committee.                                                                    
                                                                               
 REPRESENTATIVE ROBINSON suggested that since they are not                     
 comfortable with passing this out of committee, they should get               
 Mr. Sharrock on-line in the next meeting to settle these concerns             
 to enable moving this next week.                                              
                                                                               
 REPRESENTATIVE KOTT reiterated that this is a small issue.  If                
 this issue is in fact as serious as could be portrayed, then he               
 would not be willing to push it out of Labor and Commerce.                    
                                                                               
 REPRESENTATIVE JAMES felt that if they passed this on to the next             
 committee with their concerns put forth, that would move it                   
 along.                                                                        
                                                                               
 CHAIRMAN MASEK moved to adopt the zero fiscal note.                           
                                                                               
 REPRESENTATIVE AUSTERMAN moved that they forward this bill on to              
 Community and Regional Affairs with individual recommendations                
 and the zero fiscal note.                                                     
                                                                               
 Number 364                                                                    
                                                                               
 Hearing no objection, CHAIRMAN MASEK stated they will move this               
 bill out of committee to Community and Regional Affairs.                      
 HITT - 02/21/95                                                               
 ALASKA TOURISM MARKETING COUNCIL OVERVIEW                                   
                                                                               
 Number 393                                                                    
                                                                               
 ROBERT DINDINGER, VICE CHAIR, ALASKA TOURISM MARKETING COUNCIL,               
 began his overview by announcing the Alaska Tourism Marketing                 
 Council (ATMC) just hired a new executive director, Dave Carp.                
 Cooperative marketing for tourism promotion has been around for               
 20 years.  The formal state structure in the ATMC has been                    
 around for about seven years.  The budget a year ago was $7.5                 
 million; last year it was $4 million.  That has cost the ATMC the             
 television advertising.  The supplemental budget going through                
 now includes $2.5 million for television.                                     
                                                                               
 MR. DINDINGER presented the ATMC program as divided into two                  
 parts:  Print advertising and television.  The print portion is               
 direct mail and collecting names/addresses of people who are                  
 interested in traveling to Alaska.  The ATMC makes those names                
 available to businesses throughout the state.  The businesses can             
 then, with target-precision, send their few brochures to people               
 likely to visit and buy their services.  That part of the program             
 costs $4 million.  The television portion is generating awareness             
 of Alaska to people who know nothing about Alaska; creating an                
 initial stimulus for traveling to Alaska.  The television effort              
 this year gave about 81 million exposures, most of it on cable.               
 It ran for three weeks and was over in December.                              
                                                                               
 MR. DINDINGER explained that 64 percent of the people who will                
 book a summer vacation to Alaska do it between March and May.                 
 The ATMC will have no television exposure during that time.  It's             
 particularly unfortunate that the ATMC won't have any follow-up               
 effort on television to the Good Morning America segment on                   
 Alaska.  One exposure usually doesn't accomplish much; it takes               
 multiple exposures.  The ATMC feels it will take at least 1/4                 
 million to launch a successful campaign.  When Jay Hammond was                
 Governor, the ATMC was spending a total of $10.5 million on                   
 promotion of Alaska and $5 million on television alone.  There is             
 still a lot of Alaska on television due to the cruise lines                   
 advertising their Alaska experience.  However, they're selling                
 cruises and motor coach tours, not the entire expanse of Alaska.              
                                                                               
 Number 447                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN asked since the ATMC cut the television,             
 is that indicative that the ATMC feels the print matter is more               
 important than television?                                                    
                                                                               
 MR. DINDINGER responded that the print advertising is the base                
 program.  The operators in the state are dependent year to year               
 on getting that list.  If the ATMC went a year without providing              
 it, people would go bankrupt.  The television campaign is a                   
 long-term project and a multi-year effort.  The ATMC realizes                 
 they should be doing television at all cost, but they don't have              
 the will.  The only way to build a bigger pool of consumers is                
 through television.  However, the ATMC doesn't want to see the                
 smaller businesses go bankrupt without the print advertising.                 
                                                                               
 CHAIRMAN MASEK queried if the ATMC is looking at what other                   
 states are doing to gain a larger share of the marketplace.                   
                                                                               
 MR. DINDINGER said the ATMC is, although Alaska's real                        
 competition is Europe (the number one competitor), along with                 
 Mexico, the Caribbean and Hawaii.  The kind of money it takes to              
 vacation in Alaska is comparable with a trip to Europe.  Alaska               
 is being overwhelmingly out spent when it comes to promoting                  
 tourism.  With their consistently declining budget, the ATMC                  
 hasn't been able to be too reactive to outside marketing                      
 programs.  Mr. Dindinger expressed that the ATMC would be willing             
 to consider new approaches to television advertising that are                 
 successful in other states.                                                   
                                                                               
 Number 491                                                                    
                                                                               
 REPRESENTATIVE JAMES expressed her concern for services (i.e.,                
 roads, emergency, etc.) that are not funded by the tourism                    
 industry but have to exist to provide a nice place for tourists.              
                                                                               
 MR. DINDINGER replied that the ATMC is in the marketing business,             
 not the infrastructure or long-term strategic planning business.              
 He felt that Alaska was going to have to succumb to a tax (income             
 or property) in the future.                                                   
                                                                               
 REPRESENTATIVE AUSTERMAN offered that if it comes to a state tax              
 to help fund an industry, that industry should have to pay to                 
 help support the infrastructure of the state.                                 
                                                                               
 MR. DINDINGER observed the ATMC has no position on taxes, whereas             
 the Alaska Visitors Association (AVA) is supportive of a                      
 broad-based dedicated tax.  The travel industry is not                        
 volunteering to be taxed.                                                     
                                                                               
 REPRESENTATIVE JAMES expressed a concern for too many tourists                
 adversely affecting the state's residents' ability to live                    
 comfortably.  She feels that money spent on marketing needs to be             
 matched with money towards infrastructure, to be able to handle               
 larger numbers of visitors.                                                   
                                                                               
 TAPE 95-3, SIDE B                                                             
 Number 002                                                                    
                                                                               
 MR. DINDINGER agreed.  He commented that we should promote                    
 alternative destinations within Alaska with the national parks                
 and other areas that aren't visited much.  Although more visitors             
 go to Disneyland in a day than come to Alaska in a year, he                   
 contended that the state could handle those numbers with money                
 and a long-term plan.                                                         
                                                                               
 CHAIRMAN MASEK inquired how closely the ATMC is following the                 
 blueprint for Destination Alaska study.                                       
                                                                               
 MR. DINDINGER reflected that the Destination Alaska study was                 
 predominately about infrastructure development.  It was almost a              
 planning and zoning document where tourism ought to happen.  It               
 didn't deal with marketing, so it's had little effect on the                  
 ATMC.  For Destination Alaska to be successful, it will require               
 participation by the Department of Transportation and Public                  
 Facilities, state parks and other state agencies.                             
                                                                               
 Number 044                                                                    
                                                                               
 MR. DINDINGER believed the input from 35 communities was the                  
 basis for the recommendations for that study.  It was an AVA                  
 project.  The general thrust of that input was that most                      
 communities want to participate in the economic benefits of                   
 tourism while trying to protect their own values/community life.              
 He felt that it got a lot of communities much more proactive in               
 infrastructure development and tourism planning.                              
                                                                               
 Number 094                                                                    
                                                                               
 MR. DINDINGER mentioned the cost of the study was about $300,000.             
 It was commissioned by the AVA.  The AVA raised the money from                
 the major operators within the industry.                                      
                                                                               
 REPRESENTATIVE AUSTERMAN commented that many small communities                
 were unhappy with the Destination Alaska recommendations.  The                
 highlighted areas to be immediately taken care of were through                
 the main-flow areas, whereas deficiencies were noted in the                   
 smaller areas.  He felt learning the source of the sponsors of                
 the study reflects how the results were determined.                           
                                                                               
 MR. DINDINGER proposed that a responsibility of the state should              
 be to help the communities that want a bigger role in tourism                 
 with technical advice on how to create their own Destination                  
 Alaska projects.  He considered that the consultants who did this             
 study, did a good job in pointing the state in the right                      
 direction in terms of what needs to be done to provide the                    
 services that will be required as a world-class travel                        
 destination.                                                                  
                                                                               
 Number 173                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN supported that the study was a good plan             
 for long-term planning.  However, he reiterated that as the                   
 report was made available to the general public, a popular                    
 interpretation was that the communities with minimal                          
 infrastructure were construed as places to avoid versus the                   
 others which were recommended.                                                
                                                                               
 MR. DINDINGER illuminated that they would welcome new and                     
 successful techniques in marketing, as opposed to the print                   
 advertising and television the ATMC is now doing, from the                    
 Division of Tourism.                                                          
                                                                               
 REPRESENTATIVE PORTER questioned why the two agencies aren't                  
 considered together as a whole.                                               
                                                                               
 MR. DINDINGER replied that the ATMC and the Division of Tourism               
 used to be one entity, the Alaska Visitors Association Marketing              
 Council.  It was a business group that consulted with the state               
 on how marketing should be done.  It was a voluntary program with             
 no required matching program.  Then the state decided it was                  
 going to stay with the international business, but the industry               
 could participate in the domestic marketing if they paid, at that             
 time, 15 percent.  Legislation drew those lines; that's not                   
 particularly what the industry wanted.                                        
                                                                               
 REPRESENTATIVE PORTER asked if the marketing techniques are that              
 different for international versus domestic to preclude a                     
 unification between the two agencies.                                         
                                                                               
 Number 233                                                                    
                                                                               
 MR. DINDINGER said that's a much debated issue with no clear                  
 consensus.  He felt that some techniques are different, yet the               
 principles are the same.  There are some operators that wouldn't              
 be interested in participating in a foreign marketing program,                
 waiting years for any noticeable results.  He thought it could be             
 done either way, but it was the call of the Commissioner of                   
 Commerce.  He did state that the industry would like to                       
 participate in the decisions; the industry views the state more               
 as a support service.                                                         
                                                                               
 REPRESENTATIVE AUSTERMAN commented that the percentage of foreign             
 visitors is 6-8 percent, which the Division of Tourism markets.               
 That leaves 92 to 94 percent of the visitors that the ATMC                    
 handles.  It is his contention that issue needs to be looked                  
 into.  He changed the subject to the House bill that would create             
 a sport fish marketing council and asked for Mr. Dindinger's                  
 thoughts.                                                                     
                                                                               
 Number 279                                                                    
                                                                               
 MR. DINDINGER said the ATMC used to do special-interest                       
 marketing.  The best way to bring more fisherman is to run a                  
 fishing-oriented ad.  They have done that in the past, but not to             
 the extent that meets all the needs of the entire fishing                     
 community.  The fishing industry has identified a mechanism to                
 fund their marketing effort with.  He has mixed feelings.  When               
 there are so few dollars for tourism marketing, he hates to see               
 it splintered out to a lot of small efforts.  Specialized                     
 advertising went away with the budget cuts.  He feels this effort             
 is a reaction to the fact that less marketing is being done.                  
                                                                               
 CHAIRMAN MASEK asked how the ATMC decides policy.  Does it                    
 involve a broad spectrum statewide?                                           
                                                                               
 MR. DINDINGER allowed that it does.  Seven of the ten AVA seats               
 are sold to the largest contributors and three are usually given              
 regionally; one each to Southeast, Southcentral and the Interior.             
 Then there are ten Governor appointees.  They have been receptive             
 to advice and criticism.  He contended that the biggest safeguard             
 for preventing one special interest having control was that under             
 statute, they must have 11 affirmative votes to take any concrete             
 action or in determining policy.  He confirmed that all segments              
 of the industry are involved in ATMC's decision making and there              
 is no conscious effort to preclude any group.                                 
                                                                               
 Number 368                                                                    
                                                                               
 REPRESENTATIVES AUSTERMAN and KOTT both confirmed from their                  
 personal experience, the diversity and objectivity of the council             
 and decisions made within that council.                                       
                                                                               
 REPRESENTATIVE KOTT observed that although it is difficult to                 
 pinpoint, he feels the tourism industry does contribute to the                
 infrastructure of the state.  Maybe the state should redirect                 
 attention to areas in rural Alaska that are not at capacity                   
 during the summer months.  The state should place more emphasis               
 on moving tourists through the entire state than concentrating on             
 the dense areas.  On a side note, he offered that the state of                
 Ohio spent three times the money on tourism that Alaska did last              
 year.                                                                         
                                                                               
 Number 430                                                                    
                                                                               
 MR. DINDINGER concluded that while the last few years have been               
 beneficial, that is a direct correlation to the television the                
 ATMC ran four and five years ago.  He expressed concern for the               
 future of small businesses in the industry.                                   
                                                                               
 REPRESENTATIVE KOTT related the example of California cutting                 
 their steadily increasing marketing budget by about 40 percent.               
 It wasn't the first year, but the next year they not only lost                
 tourism, they also lost residents.                                            
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business before the committee, CHAIRMAN                
 MASEK adjourned the meeting at 3:58 p.m.                                      
                                                                               

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