Legislature(1995 - 1996)
02/21/1995 02:35 PM House ITT
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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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