Legislature(2001 - 2002)
02/22/2001 08:04 AM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 24-BOROUGH REVENUES FOR TOURISM MARKETING CO-CHAIR MORGAN announced that the first order of business would be HOUSE BILL NO. 24, "An Act relating to use of certain borough revenues for a tourism marketing campaign." [Before the committee is CSHB 24(EDT).] Number 0092 REPRESENTATIVE JIM WHITAKER, Alaska State Legislature, testified as sponsor of HB 24. Simply, HB 24 allows for a local option regarding the usage of bed taxes. He offered to answer any questions from the committee. Number 0240 CO-CHAIR MEYER inquired as to what communities would be impacted by this bill. He related his understanding that Anchorage would not be impacted by this bill. REPRESENTATIVE WHITAKER affirmed that he shared Co-Chair Meyer's understanding. He recalled that there are about eight communities that would be impacted by this legislation. Number 0385 BRETT CARLSON, Northern Alaska Tour Company, testified via teleconference. Although HB 24 is a simple bill, it does address an important issue for the visitor industry. He explained that since the 1970s small visitor industry businesses in communities throughout Alaska have relied on their local destination marketing organizations in order to help them compete in the increasingly competitive market place. These local destination marketing organizations are typically funded through a local tax, which is often a bed tax. Such taxes are often collected with the specific intent to help small businesses compete in the travel industry. However, Title 29 has the potential to create a situation, in 11 organized boroughs, in which a visitor tax that was enacted to fund the industry cannot be used for that purpose. He explained that Title 29 grants second class boroughs, where the problem would be the greatest, a nonareawide economic development power. However, most of the bed taxes in the second class boroughs have been enacted on an areawide basis. He returned to Title 29 and pointed out that it says a nonareawide power cannot be used to spend an areawide tax and therein lies the challenge. This issue has come up in Fairbanks. This legislation would solve the problem. He echoed earlier comments that HB 24 would merely provide an option to the local communities. Mr. Carlson urged support of HB 24, which has support throughout the state. He informed the committee that Alaska Travel Industry Association (ATIA) has passed a resolution in support of HB 24 and the Anchorage Convention and Visitors Bureau is supportive of HB 24. In regard to Co-Chair Meyer's earlier comments, Mr. Carlson pointed out that HB 24 would indirectly benefit unified municipalities in that marketing done by any community in the state would benefit gateway communities, such as Anchorage. He indicated that allowing other communities to contribute to statewide marketing programs is also beneficial to the [unified municipalities]. Number 0802 DEBBIE TILSWORTH, Riverboat Discovery; Chair, Local Chapter of the Fairbanks Travel Industry, testified via teleconference. She remarked on the timeliness of HB 24. As [Fairbanks] looks to increasing funding in the travel industry, Fairbanks has a number of challenges. One of the challenges is to become involved in the borough's budgeting process this year. However, that is not allowed under the current [statute]. Therefore, she indicated the need to move HB 24 along in a timely fashion in order to allow the Fairbanks North Star Borough mayor and assembly to approve funding for destination marketing in the fiscal year 2002. CO-CHAIR MORGAN asked if anyone on the teleconference in Fairbanks was opposed to this legislation. There was an indication that everyone in the Fairbanks Legislative Information Office was supportive of the bill. REPRESENTATIVE HALCRO referred to line 5 of CSHB 24(EDT) and the language "sales tax levied upon room rentals". He assumed that language referred to hotel, motel, and bed and breakfast room rentals not a rental apartment. He asked if there should be any concern with the broad title. REPRESENTATIVE WHITAKER explained that the title was changed due to a concern that the original title was too broad and thus was tightened to the current language. Representative Whitaker said that he wasn't opposed to tightening the title further to specify "bed tax revenues." Representative Whitaker indicated his ambivalence toward the title. REPRESENTATIVE HALCRO asked if Fairbanks has a tax on the monthly apartment rental. REPRESENTATIVE WHITAKER replied no. REPRESENTATIVE HALCRO specified that his concern is in regard to someone renting apartments and whether a portion of that [tax] revenue should be used for tourism marketing. REPRESENTATIVE WHITAKER acknowledged that [issue] could be raised if [an apartment rental] tax was in place. He said, "Knowing my own borough, ... I would be very surprised if that ever happened." Number 1075 REPRESENTATIVE KERTTULA asked if Representative Whitaker had reviewed the March 17, 2000, memorandum from Tamara Cook, Director, Legal and Research Services, Legislative Affairs Agency, which addresses the issue as to whether the Fairbanks North Star Borough has the power to conduct a campaign under Title 29. REPRESENTATIVE WHITAKER said that he had reviewed the aforementioned memorandum. He explained that the memorandum responds to whether the Fairbanks North Star Borough may use proceeds from a bed tax for a tourism marketing campaign, to which Ms. Cook replied no. That is the situation under existing law and thus this legislation would attempt to correct that situation. REPRESENTATIVE KERTTULA asked, "Do you think that, then, covers the issue of whether it [the Fairbanks North Star Borough] has the power under [AS] 29.35.210, ... the broader scope issue." REPRESENTATIVE WHITAKER replied yes. REPRESENTATIVE MURKOWSKI asked if the common vernacular used is "bed tax." REPRESENTATIVE WHITAKER replied yes. REPRESENTATIVE MURKOWSKI remarked that it would be more straightforward if it were referred to as a "bed tax," although she believes the point is understood. Number 1255 CO-CHAIR MEYER moved to report CSHB 24(EDT) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 24(EDT) was reported from the House Community and Regional Affairs Standing Committee.
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