Legislature(2011 - 2012)
04/08/2011 03:35 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| HB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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."
3:35:41 PM
Vice-chair Fairclough proposed committee substitute, work
draft #27-LS0509/S. Co-Chair Stoltze OBJECTED for the
purpose of discussion.
PETER ECKLUND, STAFF, REPRESENTATVIE THOMAS, discussed the
Committee Substitute (CS). He presented a sectional
analysis. Mr. Ecklund explained that Section 1 would be
addressed later in the presentation. Section 2 changes the
date required to enter an initial contract with a Qualified
Trade Association (QTA) from April 1st to June 1st. On
April 1st, the legislature is typically in session. By June
1st, the legislature is typically adjourned and the
appropriation for the QTA will be known. If the current law
remained the same, the QTA reverts back to a 50/50 match on
July 1, 2011. The legislation proposes a $2 state
contribution for every $1 industry match.
3:38:39 PM
Mr. Ecklund stated that Section 3 condenses the board from
32 to 9 members. Three members would be selected by the
governor from the cruise lines for service of three year
terms. Six members would be selected by the Alaska Travel
Industry Association (ATIA) membership. Two of the members
are required from tourism entities that employ fewer than
50 people. One member must come from an entity employing
between 51 and 250 people. One board member must come from
an entity employing greater than 250 people. Two members
are "at large," and all six members are selected by the
membership of the QTA.
3:39:54 PM
Mr. Ecklund continued that Section 4 adds a restriction
stating that an entity receiving state funds through the
contract cannot employ a person to lobby the legislature
regarding the funding of the contract.
Mr. Ecklund stated that Section 5 repeals 44.33.125(d)
which states that an appropriation of section (d) is left
up to the Commissioner of the Department of Commerce,
Community and Economic Development (DCCED) to determine
whether a match is required or not. Section 6 is a
transition section for the members appointed by the
governor. Section 7 states an effective date of July 1,
2011.
3:41:05 PM
REPRESENTATIVE BOB HERON stated that the version presented
by the Economic Development Trade and Tourism (EDT)
committee contained a task force provision. Since then the
house majority leader introduced HB 222, which will become
an interim project for the committee. He believed that the
formula had good merit.
Co-Chair Stoltze appreciated the work done on the
legislation. He applauded the solution and the process.
3:42:31 PM
Representative Doogan provided an example with the state
contributing $12 million and the industry contributing $6
million. Mr. Ecklund concurred that the example was valid.
Representative Doogan asked about a provision in the event
that the industry does not pay their share. Mr. Ecklund
replied that if the industry contributes $4 million, it
would receive $8 million of the $12 appropriated by the
legislature.
3:43:17 PM
Representative Gara asked about the history of state and
industry contributions. He recalled that the cruise ship
industry contributed $5 million last year. Mr. Ecklund
directed the question to the commissioner of DCCED.
3:44:21 PM
Representative Gara asked about a task force created to
devise a plan for more stable financing. Representative
Herron replied that Representative Austerman's promotion
and marketing commission discussed the potential of a task
force over the interim to devise a long term plan to
address tourism marketing appropriations. The proposed
legislation contained the perfect vehicle for the EDT
committee to employ during the interim. The plan is for the
committee to visit different regions of the state to invite
stakeholders to review Representative Austerman's
legislation, suggest changes, and revisit the issue in
January. The committee would act in lieu of a task force.
3:46:33 PM
Representative Gara pointed out that the bill had no sunset
date. Representative Herron replied that if the bill does
not pass, the match would revert back to 50/50 despite the
contribution on July 1, 2011.
Representative Gara asked if the reversion back to the
50/50 match is written in the bill. Mr. Ecklund stated that
the bill is intended to provide a long term solution.
Representative Costello thanked Representative Herron for
the recognition of the importance of tourism marketing. She
stated that the money spent on tourism market is an
investment and an important part of the state's economy.
She stated that her constituents appreciate the opportunity
to continue their tourism marketing.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
OBJECTION, it was so ordered.
3:49:03 PM
JULIE SAUPE, ATIA (via teleconference), stated that she was
available for questions.
ALAN LEMASTER, VTS (via teleconference), testified in
opposition to the CS. He spoke about his many times
testifying on this issue. He discussed the variety of
proposals made to build long term marketing programs and
grow sustained visitation to Alaska. Many efforts were
denied. He commented on the CS before the committee, in
particular the condensation of the 30 member marketing
council. He mentioned that the current council is made up
of dedicated volunteers from across the state. The
dedicated volunteers meet often to develop programs. He
requested approval of the original legislation as proposed
by Governor Parnell, which would allow the legislature and
the industry to develop a permanent perennial solution to
serve all of Alaskans.
3:52:44 PM
PATTY MACKEY, ATIA BOARD wished to work with the
legislature and the administration to earn support for
sustained funding to market Alaska. The tangible benefits
of the tourism industry include jobs for Alaskans and
opportunities for independent business ownership. She
highlighted the increased understanding of Alaska provided
by tourism efforts. She spoke about the value of magazine
and internet advertising.
3:56:20 PM
Representative Gara asked about declining state revenue
from tourism taxes. He understood that most ATIA members do
not pay state taxes. Ms. Mackey clarified that some tourism
entities pay corporate tax, but not local municipality
taxes.
Representative Gara asked about the history of the state
and industry match. Ms. Mackey stated that the spending
history was erratic. She stated that the most recent match
is 70/30. She mentioned a 50/50 and a 60/40 match in the
past. Representative Gara asked about the 70/30 match. Ms.
Mackey responded that the 30 percent was the industry
contribution.
3:57:56 PM
RICHARD COLE, WINGS OF ALASKA, testified in support of any
sustained investment in marketing for tourism in Alaska. He
spoke about his business. He believed that an investment in
Alaskan tourism is an investment in all Alaskan businesses
as well as infrastructure. He added that his business
offers flight service to many small communities.
4:00:25 PM
SUSAN BELL, THE DEPARTMENT OF COMMERCE, COMMISSIONER,
COMMUNITY AND ECONOMIC DEVELOPMENT, commented that the
department and governor are committed to the tourism
industry. She provided a brief history of the marketing
efforts and state support. The governor would like
maintenance of the $16 million investment in an effort for
further economic recovery.
4:02:40 PM
Commissioner Bell responded to Representative Gara's
questions. She pointed out that the industry previously
contributed via voluntary contributions from the cruise
lines, destination marketing organizations, and the
businesses that participate in the state's programs. She
noted significant changes on the visitor industry such as
the vehicle rental tax and the ballot initiative passed in
2006. Over the last decade, the former $5 million in
industry contributions was reduced to $2.7 million.
4:04:19 PM
Representative Gara asked if last year's state contribution
was 50 percent. Commissioner Bell responded that the
legislature made a change after the ballot initiative in
2006 to reinstate a 70/30 match with the 30 being the
industry contributions. That provision would expire July 1,
2011.
Representative Gara asked when the last time the match was
50/50. Commissioner Bell responded that the last time was
in 2004. He added that the industry paid increased fees and
taxes during that time.
4:05:48 PM
Representative Gara asked for a historical state share of
the contribution. He understood that the state share is
estimated to be approximately $12 million this year. He
asked about the state share in dollar contribution for the
past two years. Commissioner Bell responded that the
state's contribution for the current fiscal year was $16
million. The prior fiscal year's contribution was $9
million. She offered to follow up with the committee to
confirm the numbers.
Co-Chair Thomas asked if HB 160 was the governor's bill.
Commissioner Bell responded that the bill was a committee
bill. The appreciation is more appropriately directed to
Representative Heron and the EDT committee.
Co-Chair Thomas pointed out that if the bill does not pass,
the marketing plan for the industry would be $5.4 million
versus the requested $2.7 million.
4:07:42 PM
Co-Chair Thomas commented on the creation of a plan that
eliminates the 50/50 match. Co-Chair Stoltze added that the
alternative approach was agreed upon. He believed that the
compromise allowed for improvement of cooperation between
the state and the industry in this legislative body.
Representative Costello noted that the tourism industry
contributed $138 million to the state budget and $69.8
million in municipal revenues. She viewed the state
contribution as an investment.
Representative Doogan understood that the bill would
contribute $12 million to the industry if the industry
comes up with $6 million. If the industry contributes less
money, then the state will pay the two to one ratio of the
contributed amount. Commissioner Bell agreed that
Representative Doogan understood the mechanism.
Representative Doogan asked if the amount that the industry
agrees to contribute is $2.7 million, then the state
contributes twice the amount. Commissioner Bell concurred
and cited a total contribution of $8.1 million in the event
of an industry contribution of $2.7 million.
4:11:15 PM
Mr. Ecklund discussed the fiscal note. He mentioned one
minor technical improvement needed for the fiscal note. He
commented that the department affected was DCCED but the
appropriation should state "qualified trade association" as
opposed to "economic development."
Vice-chair Fairclough MOVED to report CSHB 160 out of
committee with individual recommendations and the
accompanying fiscal note(s). There being NO OBJECTION, it
was so ordered.
CSHB 160 was REPORTED out of Committee with a "do pass"
recommendation and with one new fiscal note from the
Department of Commerce, Community and Economic Development
and one new zero impact note from the Department of Revenue.
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