MINUTES SENATE FINANCE COMMITTEE March 25, 1993 9:17 a.m. TAPES SFC-93, #42, Side 2 (300-000) SFC-93, #44, Side 1 (000-100) CALL TO ORDER Senator Drue Pearce, Co-chair, convened the meeting at approximately 9:17 a.m. PRESENT In addition to Co-chairs Frank and Pearce, Senators Kelly, Kerttula, and Jacko were present. Senator Rieger arrived while the meeting was in progress. Senator Sharp was absent. ALSO ATTENDING: Wendy Wolf, Deputy Director, Division of Tourism, Department of Commerce & Economic Development; and aides to committee members. ALSO PARTICIPATING VIA TELECONFERENCE: Tina M. Lindgren, Executive Director, Alaska Tourism Marketing Council testified via teleconference from Anchorage. SUMMARY INFORMATION CSSB 85(L&C) - An Act deleting a requirement that certain members of the board of directors of the Alaska Tourism Marketing Council be substantially involved in a visitor or recreation industry business; relating to the selection of a presiding officer for the Alaska Tourism Marketing Council; extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date. Testimony was heard by Tina Lindgren, Executive Director, Alaska Tourism Marketing Council via teleconference from Anchorage. Discussion was had by Senators Kelly, Kerttula, and Co-chair Frank regarding the Vacation Planner and other ATMC issues. CSSB 85(L&C) was HELD in committee. CSSB 42(CRA) - An Act relating to municipal taxation of alcoholic beverages; and providing for an effective date. CS FOR SENATE BILL NO. 85(L&C): An Act deleting a requirement that certain members of the board of directors of the Alaska Tourism Marketing Council be substantially involved in a visitor or recreation industry business; relating to the selection of a presiding officer for the Alaska Tourism Marketing Council; extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date. CO-CHAIR DRUE PEARCE announced that CSSB 85(L&C) was before the committee and a teleconference would be held with Tina M. Lindgren, Executive Director, Alaska Tourism Marketing Council. Co-chair Pearce asked Senator Kelly to explain the bill to the committee. SENATOR TIM KELLY, Chairman of Labor & Commerce Committee, said the CSSB 85(L&C) version allows the chairman of the board of directors of the Alaska Tourism Marketing Council to be elected by the board of directors instead of the head of the Division of Tourism automatically becoming the chairman, and extends the term of the Council to four years (instead of ten recommended by the legislative auditor). He also noted that the word "substantially" was deleted from the title of the bill. Discussion was had by SENATORS JAY KERTTULA and Kelly whether the Council term should be four or ten years. Co-chair Pearce asked Ms. Lindgren to give the committee an overview of goals for the Alaska Tourism Marketing Council for the next year. TINA LINDGREN said that ATMC had taken a new look at its priorities for the coming year. Advertising has moved as its number one priority which would generate interest for visitors to Alaska. Its secondary priority is to generate inquiries for the state using the vacation planner and satisfy those inquiries. Thirdly, the Council will continue its public relations and national press to attract positive coverage of the state. It will continue newspaper travel sections and institute new programs for regions of the United States that have a low travel rate to Alaska. SENATOR STEVE FRANK voiced his concern over the circulation reduction of the Vacation Planner and reducing inquiries that reach the small businesses in Alaska who do not have or cannot afford other marketing programs. He asked what the Council's opinion was on this issue. Mr. Lindgren said that it was of concern to the Council especially in light of the small businesses. However, the Council felt strongly that it was the Council's responsibility to ensure that the whole state benefit from more visitors rather than generating interest toward the same visitors and the same number each year. She said the Council had not planned to change the program extensively but was hoping to find the proper mix and level best for all of Alaska. She agreed that the small businesses looked to the state to do advertising for them. In answer to Senator Frank, Ms. Lindgren said the target reduction for the Vacation Planner was being reduced from 450,000 to 350,000. She pointed out that the printing was not nearly as expensive as the national advertising. Senator Frank reiterated that the BRC card would not be there for the small businesses but the cards would be there for the large cruise lines because they could afford to continue it. Ms. Lindgren said that the Council shared these concerns, but that it was a matter of budget dollars. Senator Kerttula voiced his support of the Council. After his travels into the bush, he felt strongly that the Vacation Planner was the only vehicle for small businesses to advertise. He felt that it was going to effect his constituents. Co-chair Pearce informed the committee and in answer to Senator Kerttula, that the House subcommittee had increased the industry share to ATMC from 15 percent to 22- 1/2 percent. She said that had not been the intent to reduce ATMC's budget. The Senate had not yet come to an agreement on this issue. Senator Frank said that the decision to reduce the Travel Planner was done before the budget process, and was part of the FY94 plan. Co-chair Pearce said her intention, because of the controversy surrounding ATMC, was to HOLD CSSB 85(L&C) in committee. She wanted to form a committee representing the administration, legislature and industry to work together using the Alaska Visitors Association study as a base. This committee could come back to the legislature with plans on effective continued funding and a direction of marketing for the state. She announced that the teleconference part of the meeting was over. CS FOR SENATE BILL NO. 42(CRA): An Act relating to municipal taxation of alcoholic beverages; and providing for an effective date. Co-chair Pearce announced that CSSB 42(CRA) was before the committee. SENATOR GEORGE JACKO, sponsor of the bill, said that CSSB 42(CRA) would allow municipalities to tax alcoholic beverages at a higher rate than other items, and to hold a municipal election to decide that tax. He believed it was an additional revenue tool for smaller communities with a population of less than 2,500. In answer to Co-chair Frank, Senator Jacko said that limiting the size of the community was done by Senator Miller. Senator Jacko would have preferred that it was available to all communities. Senator Kerttula voiced his support on taxing alcohol. He pointed out that if the tax is too high, bootlegging could result. Senator Jacko also voiced his concern in that area, that this legislation would leave the amount of the tax up to the community, letting the community judge the limit of the tax for themselves. Senator Jacko MOVED for passage of CSSB 42(CRA) from committee with individual recommendations. No objections being raised, CSSB 42(CRA) was REPORTED OUT of committee with a zero fiscal note for the Department of Commerce and Economic Development. Co-chairs Frank, Pearce, Senators Kerttula, Rieger, and Jacko signed the committee report with a "do pass" recommendation. Senator Sharp and Kelly did not sign. ADJOURNMENT The meeting was adjourned at approximately 10:10 a.m.