Legislature(1993 - 1994)
04/13/1994 08:30 AM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. HB 342 was HELD in Committee for further consideration. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." REPRESENTATIVE PETE KOTT noted that HB 342 would extend the life of the Alaska Tourism Marketing Council (ATMC) to December 30, 1998. He added that the legislation would conform to the recommendations of the 1993 Budget and Audit report. ATMC falls under the Department of Commerce and Economic Development (DEC), Division of Tourism. ATMC contributes a substantial amount to the State by providing over $52 million dollars each year. 4 Co-Chair MacLean provided the Committee with a work draft Revenues to the State of Alaska Generated by the Visitor Industry". [Copy on file]. She noted that the committee substitute for HB 342 proposed an increase to the industry contribution inline with what the Governor intended in the proposed operating budget. The committee substitute would also increase the minimum industry contribution in statute from 15% to 38% for FY95. Thereafter, there would be a graduation of the industry contribution structured in the bill. Co-Chair MacLean added that ATMC would need increased program receipt authority to accommodate the increases in industry contribution. The draft would not allow for the industry contribution to be in-kind. (Tape Change, HFC 94-123, Side 1). Co-Chair MacLean MOVED to adopt the committee substitute as the version before the Committee. Representative Parnell OBJECTED stressing the damage the harsh measures would inflict to small tour operators by increasing the contributing to 50%. Co-Chair MacLean replied that the small tour operators had agreed to pay a dedicated fund. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, pointed out that if the Alaska Visitor's Association (AVA) was not able to meet the match, the law states that the decision of action should be made by the Commissioner of Commerce, the Director of the Division of Tourism and another commissioner designated by the Governor. He added that a marketing program would continue to exist although it would not be provided by AMTC and if that should happen, an advisory committee would be established. Commissioner Fuhs stated his support for the extension of the Alaska Tourism Marketing Council. The Governor has requested a more substantial match. He noted that ASMI currently provides 85% of their funding source. ATMC contributes a 15% match which the Department thinks is too low. Representative Kott remarked that the in-kind contribution should be considered as an essential element provided by tourism pointing out that last year $5 million dollars has made available. BRAD PHILLIPS, ALASKA TOURISM MARKETING COUNCIL (ATMC), ANCHORAGE, discussed the in-kind contributions. He added 5 that he was discouraged by the impact which the work draft submitted by Representative MacLean would make on small Alaskan operators. He indicated that ATMC has two sources of revenue: 1. Sales of ads. 2. Sale of the mailing list. Mr. Phillips explained that people do not realize the economic contribution made to the State as a result of tourism. This enterprise covers multiple processes and hires over twenty thousand people in the State. He urged the Committee to create a mechanism which would guarantee that money raised by AMTC be used for tourism marketing rather than placed into the general fund. Mr. Phillips noted that the group has not been opposed to a broad base tax in order to provide revenues but asks that those funds be used for tourism marketing only. Discussion followed among Committee members and Mr. Phillips regarding the delegation of taxing power and the need to create a constitutional amendment for a dedicated fund. JOHN BINKLEY, REPRESENTING SELF, FAIRBANKS, explained that the Alaska Tourism Council would like to have the same status as ASMI by paying for half their share and providing for the same mechanism to generate funds. He added that ASMI has the power of taxation and has the authority to veto any tax which the legislature implements. ATMC is requesting that the same authorization of assessment be made available. He pointed out that the tourism industry relies on marketing and they are willing to participate in a joint marketing program. The tourism commodity would be difficult to tax. Consequently, ATMC requests that the constitutional amendment be considered for implementation of tourism marketing for Alaska. Co-Chair MacLean remarked that three taxes have been suggested to the tourism council although not well received: 1. Bed tax; 2. Crew ship head tax; and 3. Motor vehicle rental tax. Mr. Binkley reiterated that the tourism industry wants to guarantee that the funds generated from the taxes be returned to marketing. Representative Brown recommended enacting taxes on a two year basis in order to fund the programs for a short period of time while further work is done in consideration of the 6 constitutional amendment. She observed that the function of the State and the joint partnership in tourism is well exampled by the public-private partnership. HB 342 was HELD in Committee for further discussion. HB 342 An Act extending the termination date of the Alaska Tourism Marketing Council. HB 342 was HELD in Committee for further consideration. HOUSE BILL 342 "An Act extending the termination date of the Alaska Tourism Marketing Council." REPRESENTATIVE PETE KOTT noted that HB 342 would extend the life of the Alaska Tourism Marketing Council (ATMC) to December 30, 1998. He added that the legislation would conform to the recommendations of the 1993 Budget and Audit report. ATMC falls under the Department of Commerce and Economic Development (DEC), Division of Tourism. ATMC contributes a substantial amount to the State by providing over $52 million dollars each year. 4 Co-Chair MacLean provided the Committee with a work draft Revenues to the State of Alaska Generated by the Visitor Industry". [Copy on file]. She noted that the committee substitute for HB 342 proposed an increase to the industry contribution inline with what the Governor intended in the proposed operating budget. The committee substitute would also increase the minimum industry contribution in statute from 15% to 38% for FY95. Thereafter, there would be a graduation of the industry contribution structured in the bill. Co-Chair MacLean added that ATMC would need increased program receipt authority to accommodate the increases in industry contribution. The draft would not allow for the industry contribution to be in-kind. (Tape Change, HFC 94-123, Side 1). Co-Chair MacLean MOVED to adopt the committee substitute as the version before the Committee. Representative Parnell OBJECTED stressing the damage the harsh measures would inflict to small tour operators by increasing the contributing to 50%. Co-Chair MacLean replied that the small tour operators had agreed to pay a dedicated fund. PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, pointed out that if the Alaska Visitor's Association (AVA) was not able to meet the match, the law states that the decision of action should be made by the Commissioner of Commerce, the Director of the Division of Tourism and another commissioner designated by the Governor. He added that a marketing program would continue to exist although it would not be provided by AMTC and if that should happen, an advisory committee would be established. Commissioner Fuhs stated his support for the extension of the Alaska Tourism Marketing Council. The Governor has requested a more substantial match. He noted that ASMI currently provides 85% of their funding source. ATMC contributes a 15% match which the Department thinks is too low. Representative Kott remarked that the in-kind contribution should be considered as an essential element provided by tourism pointing out that last year $5 million dollars has made available. BRAD PHILLIPS, ALASKA TOURISM MARKETING COUNCIL (ATMC), ANCHORAGE, discussed the in-kind contributions. He added 5 that he was discouraged by the impact which the work draft submitted by Representative MacLean would make on small Alaskan operators. He indicated that ATMC has two sources of revenue: 1. Sales of ads. 2. Sale of the mailing list. Mr. Phillips explained that people do not realize the economic contribution made to the State as a result of tourism. This enterprise covers multiple processes and hires over twenty thousand people in the State. He urged the Committee to create a mechanism which would guarantee that money raised by AMTC be used for tourism marketing rather than placed into the general fund. Mr. Phillips noted that the group has not been opposed to a broad base tax in order to provide revenues but asks that those funds be used for tourism marketing only. Discussion followed among Committee members and Mr. Phillips regarding the delegation of taxing power and the need to create a constitutional amendment for a dedicated fund. JOHN BINKLEY, REPRESENTING SELF, FAIRBANKS, explained that the Alaska Tourism Council would like to have the same status as ASMI by paying for half their share and providing for the same mechanism to generate funds. He added that ASMI has the power of taxation and has the authority to veto any tax which the legislature implements. ATMC is requesting that the same authorization of assessment be made available. He pointed out that the tourism industry relies on marketing and they are willing to participate in a joint marketing program. The tourism commodity would be difficult to tax. Consequently, ATMC requests that the constitutional amendment be considered for implementation of tourism marketing for Alaska. Co-Chair MacLean remarked that three taxes have been suggested to the tourism council although not well received: 1. Bed tax; 2. Crew ship head tax; and 3. Motor vehicle rental tax. Mr. Binkley reiterated that the tourism industry wants to guarantee that the funds generated from the taxes be returned to marketing. Representative Brown recommended enacting taxes on a two year basis in order to fund the programs for a short period of time while further work is done in consideration of the 6 constitutional amendment. She observed that the function of the State and the joint partnership in tourism is well exampled by the public-private partnership. HB 342 was HELD in Committee for further discussion.
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