04/15/2011 09:00 AM Senate FINANCE

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."                                                                                                           
                                                                                                                                
9:57:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BOB  HERRON explained HB 160.  He stated that                                                                    
the  General  Fund  amount  would  not  exceed  $12  million                                                                    
regardless of the amount put  forward by trade associations.                                                                    
The  legislation would  require a  group within  a qualified                                                                    
trade association  to consist of three  persons appointed by                                                                    
the  governor,  and  six selected  by  the  qualified  trade                                                                    
association.  The bill  contained a  limit for  lobbying and                                                                    
repealed AS 44.33.125(d).                                                                                                       
                                                                                                                                
9:59:24 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  referred  to  page   3,  line  9  of  the                                                                    
legislation. He  clarified that public  access would  not be                                                                    
excluded.                                                                                                                       
                                                                                                                                
Co-Chair Stedman  referred to two  fiscal notes  attached to                                                                    
the bill.                                                                                                                       
                                                                                                                                
10:00:50 AM                                                                                                                   
                                                                                                                                
SUSAN  K.   BELL,  COMMISSIONER,  DEPARTMENT   OF  COMMERCE,                                                                    
COMMUNITY AND  ECONOMIC DEVELOPMENT explained  that recently                                                                    
there had  been a wane  in visitors  to the state.  She said                                                                    
that over the last two years  5,000 jobs in the industry had                                                                    
been  lost. She  stated that  the issue  was statewide,  and                                                                    
stressed that  there were  signs of  recovery and  that this                                                                    
was an important  time not to back off  the states marketing                                                                    
efforts.  She  felt  that  the  bill  was  a  piece  of  the                                                                    
strategy. She hoped the state  would continue the investment                                                                    
at  $16   million,  which  would   take  a   combination  of                                                                    
legislation and budget work.                                                                                                    
                                                                                                                                
Co-Chair  Stedman commented  that the  economy had  recently                                                                    
emerged  from a  worldwide  recession. He  pointed out  that                                                                    
there had  been a  retreat in the  economy partially  due to                                                                    
the issue of the cruise ship  head tax. He felt that the two                                                                    
combined had had a significant impact in visitor decline.                                                                       
                                                                                                                                
Ms. Bell  responded that the  2009 independent  markets were                                                                    
affected by the  recession. She thought that  changes in the                                                                    
tax regime and interactions  with various markets had played                                                                    
a  role.  She  stated  industry  research  showed  a  cruise                                                                    
recovery, and  there were slight  increases on  the horizon.                                                                    
She  stressed  increased marketing  and  the  change in  the                                                                    
dynamics with the industry would aid in recovery.                                                                               
                                                                                                                                
10:04:12 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  wondered  if   there  were  any  concerns                                                                    
regarding   differences  in   the   strategies  related   to                                                                    
marketing the seafood and the tourism industry.                                                                                 
                                                                                                                                
Ms. Bell replied  that the seafood industry  marketing was a                                                                    
model  for the  tourist industry.  She said  and appropriate                                                                    
tax structure, healthy state  funding and communication with                                                                    
the market were all factors that had been incorporated.                                                                         
                                                                                                                                
10:05:26 AM                                                                                                                   
                                                                                                                                
PATTI   MACKEY,   PRESIDENT,  KETCHIKAN   VISITORS   BUREAU,                                                                    
testified in support of HB  160. She stressed the importance                                                                    
of  funding  for tourism  marketing.  She  pointed out  that                                                                    
revenues  had  dropped  and   small  business  closures  had                                                                    
occurred across the  state. She felt that there  should be a                                                                    
comprehensive marketing  strategy in place. She  stated that                                                                    
due  to  the  FY  11 appropriation,  the  state  achieved  a                                                                    
substantial  increase in  visibility. Television  spots were                                                                    
airing on  7 different  networks, and magazine  and internet                                                                    
advertising  was  significantly  expanded.  Maintaining  the                                                                    
level of  state funding  was necessary to  open the  door to                                                                    
future growth and development.                                                                                                  
                                                                                                                                
Co-Chair Stedman looked  at the language of page  3, line 8,                                                                    
specifically referring  to exclusions of  funding lobbyists.                                                                    
He felt that the language was odd.                                                                                              
                                                                                                                                
Ms. Mackay remarked the language  referring to lobbyists was                                                                    
not a n issue with the organization.                                                                                            
                                                                                                                                
Co-Chair  Stedman   clarified  that  the   organization  was                                                                    
comfortable  not  having  paid   lobbyists  in  the  Capitol                                                                    
Building working for additional funding.                                                                                        
                                                                                                                                
Ms.  Mackay  replied that  she  was  willing work  with  the                                                                    
legislation if  it would result  in a  sustainable marketing                                                                    
program.                                                                                                                        
                                                                                                                                
10:10:18 AM                                                                                                                   
                                                                                                                                
Senator  Thomas  understood  that   as  long  as  the  trade                                                                    
association  was  putting in  50  percent,  the state  could                                                                    
contribute up to $12 million.                                                                                                   
                                                                                                                                
Representative  Herron   explained  that  the   formula  and                                                                    
assured the  committee that the total  contribution from the                                                                    
state would be $12 million  regardless of the trigger or the                                                                    
formula combination.                                                                                                            
                                                                                                                                
Co-Chair  Stedman reiterated  the  question concerning  paid                                                                    
lobbyists. He  felt it was  strange that a  marketing entity                                                                    
would be barred by statue from hiring a paid lobbyist.                                                                          
                                                                                                                                
Representative  Herron  responded  that  the  provision  had                                                                    
surfaced  in  the  House  Finance   Committee  CS,  and  had                                                                    
remained without debate.                                                                                                        
                                                                                                                                
10:12:32 AM                                                                                                                   
Senator McGuire referred  to discussions concerning changing                                                                    
the match once it exceeded $3 million.                                                                                          
                                                                                                                                
Representative Herron replied that  the funding level in the                                                                    
department was  $16 million of  General Funds.  Changing the                                                                    
transitional  trigger  might  get  closer  to  current  year                                                                    
preferred funding levels.                                                                                                       
                                                                                                                                
Senator McGuire  wondered if he  would be supportive  of the                                                                    
concept.                                                                                                                        
                                                                                                                                
Representative Herron  responded that  he was  supportive of                                                                    
the concept of the amendment and helping the industry.                                                                          
                                                                                                                                
10:14:35 AM                                                                                                                   
                                                                                                                                
Senator  Ellis understood  that the  governor would  appoint                                                                    
three cruise ship industry  representatives to the marketing                                                                    
board of  9, whereas the  current 32 member  marketing board                                                                    
offered only  three seats  to the  industry. He  queried the                                                                    
dramatic  increase   of  industry   influence  on   the  new                                                                    
marketing board.                                                                                                                
                                                                                                                                
Representative Herron  replied that  there had  been concern                                                                    
about such  a dramatic  change. He added  that there  was no                                                                    
requirement of  significant financial input from  the cruise                                                                    
interests.  The  hope was  that  there  would be  additional                                                                    
attention and possible  additional financial contribution to                                                                    
a marketing campaign because of the new board structure.                                                                        
                                                                                                                                
10:16:52 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  pointed out that  the industry  would have                                                                    
one-third  control   of  the  board,  regardless   of  their                                                                    
contribution.                                                                                                                   
                                                                                                                                
Representative  Herron  said  that  the  scenario  had  been                                                                    
recognized.                                                                                                                     
                                                                                                                                
10:17:28 AM                                                                                                                   
                                                                                                                                
HB  160  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:17:40 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:17:59 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
10:18:01 AM                                                                                                                   
RECESS