Legislature(1997 - 1998)
05/06/1998 04:35 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 350
"An Act relating to tourism; relating to grants for
tourism marketing; eliminating the division of tourism
and the Alaska Tourism Marketing Council; and
providing for an effective date."
JEFFREY BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE
AND ECONOMIC DEVELOPMENT explained that CS SB 350 (FIN)
would provide an exemption from the procurement code for
the tourism marketing contracts. He noted that a prior
version of the legislation was HB 478. In the Senate
Finance Committee, a comfortable compromise with the Alaska
Visitors Association (AVA) and the Administration was
worked out.
Mr. Bush explained that the legislation would eliminate the
Alaska Tourism Marketing Council and would provide
marketing for Alaska tourism through private industry.
This industry would be called a "qualified trade
association" and would be responsible for broadly
representing the tourism industry and which would include
specific sectors listed within the bill.
Mr. Bush noted that the legislation would provide marketing
dollars, appropriated on an annual basis to the Division of
Tourism. The Division must then define what the tourism-
marketing program is. All funding would be placed on a
contractual line in order to decide what should be matched.
The bill requires a 30% match in the first year, that would
escalate to a 60% private section match by the third year.
Assuming that private industry contributes sixty cents on
the dollar, would give them the right to represent any
available program.
Co-Chair Therriault asked if the language was always the
"first right of refusal". Mr. Bush explained that language
had been added in the Senate Finance Committee on Page 3,
Lines 21-25.
Co-Chair Therriault MOVED that the work draft 0-LS1695\P,
Cook, 5/6/98, be the version before the Committee.
Representative Martin OBJECTED. He stated that he did not
"like" the title and questioned if the Alaska Tourism
Marketing Council was being eliminated. Co-Chair
Therriault commented that was the intent. Representative
Martin noted that he disagreed with private industry
receiving money from the State and then using it to benefit
the small businessperson.
A roll call vote was taken on the motion.
IN FAVOR: Moses, J. Davies, G. Davis, Grussendorf,
Kelly, Therriault
OPPOSED: Kohring, Martin
Representatives Foster, Mulder and Hanley were not present
for the vote.
The MOTION PASSED (6-2).
In response to Co-Chair Therriault's concern, Mr. Bush
explained, originally, the bill was structured so that it
would take State money and put give it to the private
sector for a match. There was concern within the
Administration that some important elements would be
removed from the program, in particular, that small
business representation would be lost in the marketplace.
Consequently, the bill was structured so that the State
would define what elements must go into a tourism program.
At this time, it has been established that entire amount is
not provided up front, but that instead, the State retains
enough control to define the elements necessary in a
tourism program.
Mr. Bush elaborated on the Alaska Visitors Association's
perspective of the bill. The legislation would create an
incentive for the trade association to make sure that all
elements are represented in the industry. The only way to
make money is to represent the entire piece of the
industry. The income of the association would be dependent
upon membership fees, dues and voluntary contributions.
Representative Martin asked how the legislation would
protect the small "mom and pop" type business enterprise.
TINA LINDGREN, EXECUTIVE DIRECTOR, ALASKA VISITORS
ASSOCIATION, ANCHORAGE, acknowledged that Representative
Martin's concerns were shared throughout the industry. She
cited that the proposed work draft was sent to 3,000
businesses around the State before it came before the
Legislature. Many of those businesses shared the same
concern, although, in the end, 85% requested that it be
brought before the Legislature.
Ms. Lindgren continued, pointing out that State funds for
promotion and advertising are declining. The point of the
legislation is addressed toward small business, because
without increased marketing, they can not survive on their
own. She added, the plan calls for Alaska Visitors
Association to be dismantled. At that time, each business
will be allowed one vote, so that everyone in the program
will have equal power.
Co-Chair Therriault asked who would control access to the
information. Mr. Bush responded that at this time, it is
written that the State and the trade association will
jointly own the information. Co-Chair Therriault advised
that there is a prohibition on using those funds for
lobbying municipality or State agencies. Mr. Bush noted
that there is a restriction included in the legislation
which would limit access to the mailing lists.
Ms. Lindgren pointed out that Section #8 repealed ATMC and
purposes related to ATMC. Mr. Bush explained the
difference between Sections #9 & #10; Section #9 adopts the
substantive bill with a 30% match requirement effective
July 1, 1999; Section #10 adopts an increase private
industry match requirement from 30% to 60% effective July
1, 2001.
Co-Chair Therriault asked if the FY99 budget would continue
to operate at status quo. Mr. Bush replied that the fiscal
note assumes the status quo budget, although,in fiscal year
2000, it would include adjustments to the match
requirements. The note would eliminate personnel services
from ATMC and the contractual difference would be the
elimination of the program receipts.
Representative J. Davies spoke to Amendment #1. [Copy on
File]. He explained that the amendment would clarify the
intent, implied in Section #(c). Mr. Bush stated that the
only problem the State would have with the amendment would
be inclusion of the 30% match requirement. He believed
that there could be contracts with the qualified trade
associations in which a match would not be feasible.
Representative J. Davies offered a technical change to
Amendment #1, placing a period after "contract" and
deleting the material: "Provided that each contract be
matched by 30% by the successful applicant". Mr. Bush
believed such action would solve the problem.
Representative J. Davies commented that the reason the
language had been included was to stipulate the right of
first refusal. Mr. Bush explained that there was a right
of first refusal provided that there was a match for all
contracts. If there is no match, then the contract is free
to go to anyone else. Essentially, whenever a contract is
entered into with the trade association, they will be
required to match.
Ms. Lindgren spoke to Amendment #1. The amendment would
not preclude another contract. She noted for the record
that AVA would not want to see this dilute the idea of
putting the majority of destination marketing to a single
contract with the State.
Representative Mulder believed that the amendment would put
the Director of Tourism in a strong position for marketing
and dealing with the agency. Co-Chair Therriault advised
that the proposed amendment would amend section (b),
clarifying that the contract would be with a single trade
association. He commented that the information specifies
that there could be multiple contracts and that each agency
has the first right of refusal. Mr. Bush interjected that
there is no way that the Director of Tourism would have the
power to "chop it up" and deny it to a trade association.
Representative J. Davies MOVED to adopt the amended
Amendment #1. There being NO OBJECTION, it was adopted.
In response to concerns by Representative Martin, Mr. Bush
remarked that the State has considered the possibility of
the association not meeting the match. That concern will
be addressed in the contract process to assure that the
match money is there. Ms. Lendgren advised that AVA has
had a contractual arrangement with the Department since
1989, and that meeting a match has never been an issue.
She emphasized that the Department has a lot of leeway in
writing the contract document and did not foresee that
being a problem.
DAVID LEE, (TESTIFIED VIA TELECONFERENCE), VALDEZ,
testified in support of the legislation. He noted that
there was tremendous interest for the bill in rural Alaska.
He added that the most important aspect of the legislation
for the rural area, would be the independent traveler and
the international marketing. Mr. Lee wanted assurence that
those efforts would continue to be supported.
ALAN LEMASTER, (TESTIFIED VIA TELECONFERENCE), GAKONA,
commented that he is a small business person who supports
the bill 100%.
Representative Mulder MOVED to report HCS CS SB 305 (FIN)
out of Committee with individual recommendations and with
the accompany fiscal note. There being NO OBJECTION, it
was so ordered.
HCS CS SB 350 (FIN) was reported out of Committee with a
"do pass" recommendation and with a fiscal note by the
Department of Commerce and Economic Development dated
5/2/98.
(Tape Change HFC 98- 159, Side 2).
| Document Name | Date/Time | Subjects |
|---|