Legislature(1999 - 2000)
04/13/1999 09:06 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 107
"An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council; and
providing for an effective date."
CS FOR SENATE BILL NO. 107(L&C)
"An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council; and
providing for an effective date."
SENATOR JERRY MACKIE was invited to join the committee. He
explained the bill per his sponsor statement, which he read
into the record. He said a new CS had been discussed but a
draft had not been prepared nor been presented to the
committee. According to the Senator, all marketing would
be done under contract. They have worked closely with
Representative Gene Therriault regarding this bill. It was
his feeling that not only would ATMC go away but that there
would be a reduction in personnel. A draft of House fiscal
notes had been prepared with the assistance of Rep.
Therriault and he asked permission for Representative
Therriault's staff to address them.
JOE BALASH, staff to Representative Therriault was invited
to join the committee. He explained the House fiscal
notes.
Co-chair Torgerson asked if there had been a fiscal note
from the department before the House made their own. Mr.
Balash indicated they did, but after some changes at the
first committee of referral. Co-chair Torgerson felt they
were getting ahead of themselves in discussing the fiscal
notes.
(Drafted house fiscal notes were distributed to the
committee.)
Senator Mackie noted that he had just received the fiscal
note from the department. Co-chair Torgerson advised that
he had also only just received it.
Senator Leman asked for further explanation from Senator
Mackie regarding the department fiscal note as compared to
the draft from the House.
Senator Mackie explained the reduction after FY 01 and that
it would be reduced down to $4.7 million by the year FY 03.
Senator Wilken asked where the $7 million came from.
Senator Mackie said it was in this year's budget. Senator
Mackie said he had worked on these fiscal notes electively
with Representative Therriault. He asked the committee to
consider these drafted House fiscal notes along with those
from the department.
Co-chair Torgerson said he would rather finish discussion
on the bill at this time and not deal with the fiscal
notes.
Senator Mackie asked for a Tourism Development FY 01
spreadsheet to be distributed to the committee.
Co-chair Torgerson asked about section two of the bill.
(There followed a brief pause on record.) Senator Mackie
then directed the committee to section ten of the bill.
Co-chair Torgerson said that was the section dealing with
the effective date of the bill.
Unidentified individual in the audience directed the
committee to section nine of the bill, page seven.
Senator Leman asked why was not a gradual transition
proposed instead of such a big step? This would have
helped in the budget. Senator Mackie said this was a
matter for the department and ATMC. He did not really get
into this matter.
Co-chair Torgerson asked about the reduction for this year.
Senator Mackie said it was about $300,000.
Senator Wilken asked about the spreadsheet and APLIC?
Senator Mackie indicated the department could explain this
matter. The office is in Tok and a key component for RV's
and others entering the State. With reference to the
spreadsheet, Senator Mackie said this had been prepared by
himself.
Co-chair Torgerson asked about page three of the bill.
Senator Mackie again indicated he would rather the
department comment on this. It is just another matter of
check and balance to monitor the best use of the industry
both private and public.
GINNY FAY, Legislative Liaison, Department of Commerce and
Economic Development was invited to join the committee.
She spoke to the Labor and Commerce version of the bill.
However, she advised the committee that Tam Cook, Legal
Services had prepared a new CS draft containing clean-up
measures in it. There is still a lot of work to be done
during the next transition year and they will have to work
diligently on this bill. She explained the department's
two fiscal notes for ATMC and Tourism Development. The
premise they worked on for FY 01 and beyond is that they
have transferred their personal services to the new trade
association under their contractual line. Personal
services were reduced. From there, they took the
activities of ATMC and delegated them to contracts. The
division will have the contractual oversight that ATMC now
has. This transition should occur in FY 01. She explained
that some duties will be shuffled and some may be
diminished. The difference in their two fiscal notes is
approximately $200,000, which was cut out. However, the
department feels this funding is necessary.
Co-chair Torgerson told Ms. Fay that he felt her testimony
was contradictory to the testimony of the sponsor. He
asked if some of this money was to fund the Tok Visitor
Center. Ms. Fay said she did not have all the figures in
front of her. She said there would be eleven positions
total, with four of them at the Tok Visitor Center. Co-
chair Torgerson asked her to review carefully the Tourism
Development spreadsheet handed out by Senator Mackie. He
asked her to explain "fixed costs". He then said he was
not going to get into this matter any further. There is a
contradiction between costs and positions. Further
discussion will have to take place with the sponsor.
Ms. Fay said the discussion has been primarily focused on
tourism. However, there have been for instance, meetings
with ambassadors, work at the national park services, and
some other activities that have had nothing to do with
tourism marketing. In addition, money from the Federal
Department of Commerce has been received to help look at
developing small business and tourism opportunities in
rural Alaska. She further referred briefly to the draft
fiscal note from the House and felt that all duties and
functions have not been addressed. In response to Co-
chair Torgerson she said it was her understanding that
there would still be some positions left in ATMC. The
fiscal note she presented this morning was only for the
Division of Tourism.
Co-chair Torgerson again reiterated that there was work
that needed to be done on this bill.
Senator Wilken called attention to the spreadsheet. He
assumed these were loaded costs. Ms. Fay said she did not
prepare the spreadsheet. She will have to consult with the
sponsor who prepared the sheet. Senator Wilken asked about
the nine employees. He felt the spreadsheet was "top
loaded".
JOE BALASH, staff to Representative Therriault was invited
to rejoin the committee. He was asked to explain the
"research" and "fixed costs" on the spreadsheet. He
explained that it included rent at the Tok Visitor Center,
telephone and communication costs costs to the
commissioner's office among others. He also included a
conversion study being conducted by ATMC. Co-chair
Torgerson asked him to explain "grants". Ms. Fay
interrupted saying this concerned the World Tourism Center.
Mr. Balash asked that a Division of Tourism spreadsheet
also be passed out to the committee.
Senator Green asked what was the field of the positions.
Ms. Fay said they dealt strictly with tourism.
Co-chair Torgerson asked for a clarification of the "clean-
up" language. Senator Mackie responded that Tam Cook was
doing the clean up of the Labor and Commerce version of the
bill. He said they were trying to deal with the House on
this matter. Senator Mackie also referred to the nine
positions; Ms. Fay said they were trying to keep the
positions at eleven, of which three would be part-time.
Ms. Fay further explained the Tourism Development spread
sheet and said it should also have included "Marketing".
Senator Wilken asked her to identify the positions listed.
Due to poor copies of the Division of Tourism spread sheet
she was unable to identify where these fell on the sheet.
Senator Phillips asked what range the Development
Specialist I was? Ms. Fay said it was either range 13 or
18 as it was difficult to read.
Senator Green inquired about what standards the State was
held to regarding monies held for the Division of Tourism
bids. Ms. Fay said section three was the applicable
section.
(Tape number 88 switched to Side B at log number 595.)
Senator Mackie continued his comments to the committee
regarding marketing contracts. There were plenty of
reasons for everyone to come to an agreement so money was
not lost.
Senator Green wondered if the department needed a fall back
if something happened or if everything fell apart? Senator
Mackie responded. There was plenty of incentive to get
this going because they would be cut from the budget
otherwise.
Senator Green asked if there was a provision to prevent the
ATMC to say they were not going to do anything during a
particular year. Ms. Fay explained and said they would be
forced to take care of marketing matters in house, which
they do not do at this time. She referred the committee to
section seven in response to a question from Co-chair
Torgerson. He also pointed out section six, and she said
there was an exception provided for under AS 44.33.125(h).
Co-chair Torgerson asked if ATMC was in agreement with the
right of refusal. Ms. Fay explained that they would always
put time lines on proposals. In order to set up contracts
there would be time requirements for all parties involved.
He further referred to subsection (b) of section seven,
right of refusal. They would have to wait a long time for
legislative approval and that might not be acceptable, Ms.
Fay explained. She said there were things they could not
do even if asked by the Governor or Legislature. Co-chair
Torgerson felt that "unless authorized by the Legislature"
should be included language.
Co-chair Torgerson continued on to page five, lines ten and
eleven. He asked clarification of this language. Ms. Fay
responded that the intent of this section was that they
wanted to address situations that would cause them concern.
She used as an example the M/V Malaspina. They received an
emergency appropriation from the Department of
Transportation to do marketing, covering this matter. Co-
chair Torgerson said he did not disagree with her comments
but felt that was not what the language he cited above
referred to. Senator Mackie said he thought the language
was correct and covered what they wanted. Co-chair
Torgerson said he would work out more complete clarifying
language. Ms. Fay referred the committee to lines nine
through eleven. This language provided the flexibility for
matching funds. Co-chair Torgerson said it was too
flexible. He continued on to page six, line six. He said
it was his understanding that materials also included logo.
If a new logo were to be designed for the State and then
the organization ceased to exist would the State still be
able to use the logo? Ms. Fay explained that she did not
envision using contractual services for such a matter. Co-
chair Torgerson felt it needed to be further clarified
anyway.
Ms. Fay said the language reflected SB 350 of last year.
Senator Mackie concurred that it was the same language of
SB 350 last year.
Co-chair Torgerson thanked Senator Mackie, Ms. Fay and Mr.
Balash for assisting the committee. Senator Mackie said he
hoped all remaining work on the bill could be finished in
this committee.
KEN DOLE, Alaska Visitors Association was invited to join
the committee. He said he was available to answer any
questions the committee may have. He said they reached
agreement with the Administration regarding matching funds.
STEVE BEHNKE, Alaska Wilderness, Recreation and Tourism
Association was invited to join the committee. He
explained his representation of small tourism
organizations. They would be concerned with any cuts to
the Division of Tourism. They were also concerned about
over all levels of funding for tourism as this affects
directly the smaller organizations in relationship to world
tourism. They are losing out around the world. The
current levels of funding are too low and they do not feel
that they can survive with any more cuts.
LISA VONBARGAN testified via teleconference from Valdez.
She said there was a need to impress on everyone the fact
of funding being diminished gradually. There was a great
concern about where funding would come from to support the
outlined activities. The role of the Division of Tourism
was important in helping to advocate the smaller
organizations. She emphasized that it was necessary to
have the continued support and advocacy of ATMC.
KATHY TARR testified via teleconference from Kenai. She
noted her appreciation of the work by the Senate Finance
Committee on this bill. She felt that the questions raised
by the committee would eventually be answered. She also
supported consolidation and the new millenium plan. SB 107
put the mechanism in place for development of the marketing
plans.
Co-chair Torgerson SET ASIDE SB 107 and said he would work
with the sponsor for a new CS. He requested amendments be
submitted to his office to be included in the new CS.
Co-chair Torgerson took a brief at ease at 10:21 a.m. and
reconvened the committee at 10:30 a.m. He called SB 52.
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