Legislature(1995 - 1996)

05/05/1995 03:10 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 328 - DISCOUNT FOR STATE MUSEUM VISIT BY GROUPS                          
 Number 017                                                                    
 The first order of business was HB 328, "An Act relating to                   
 reduced fees and group discounts for visits to the state museum               
 and its branches; and providing for an effective date."  CHAIRMAN             
 KOTT noted the bill was sponsored by the committee.                           
 ALASKA STATE LEGISLATURE, testified that HB 328 was a very simple             
 bill.  It grants specific statutory ability to the Alaska State               
 Museum for the negotiation of group discounts and group rates for             
 visits to the museum.                                                         
 MR. DOZIER said until recently this had been a practice of the                
 museum.  However, the Department of Law has taken a position                  
 indicating this is not a permissible practice.  This bill would               
 restore the situation to the status quo.                                      
 Number 037                                                                    
 REPRESENTATIVE JERRY SANDERS inquired if there was reference to               
 the size of the group.                                                        
 Number 041                                                                    
 MR. DOZIER responded the bill didn't mention size.  It simply                 
 grants authority to the museum to negotiate and grant group                   
 rates.  He said he imagines it would be from two individuals on               
 REPRESENTATIVE SANDERS asked if this would give the opportunity               
 for someone in a small group to complain.                                     
 Number 056                                                                    
 MR. DOZIER said he didn't think this would provide legal grounds              
 for complaints.  The negotiation remains within the discretion of             
 the museum, and doesn't require the museum to grant group rates.              
 Number 062                                                                    
 CHAIRMAN KOTT added there could be some discretion applied by the             
 museum.  He said if you had two or three people, they probably                
 wouldn't receive a group rate.                                                
 Number 078                                                                    
 JOHN LITTEN, SITKA TOURS, testified from Sitka, via                           
 teleconference, in support of HB 328.  He noted his company is a              
 bus company.  Mr. Litten said museums, unique as they might be,               
 need the ability to remain affordable as well as competitive with             
 other attractions.  When his company packages their tours in                  
 Sitka, they pay admission into places such as the Rapture Center,             
 Bald Eagle Center, Russian Dancers, the Russian Cathedral and the             
 Sheldon Jackson State Museum.  The wholesalers that buy the tours             
 from him want to pick and choose those attractions by their cost              
 and affordability.  Therefore, it becomes very important that the             
 state museums have the ability to negotiate prices for volume                 
 operators to remain competitive.  In the past, you had to have a              
 volume approximately 10,000 people before you really had a break              
 on the cost of going through the door.                                        
 Number 119                                                                    
 CHAIRMAN KOTT said this answered a question which asked earlier.              
 He said they are negotiating a discount, based on volume, through             
 the season.                                                                   
 Number 126                                                                    
 REPRESENTATIVE SANDERS inquired if all of the tours currently go              
 through the museum as a matter of course.                                     
 Number 131                                                                    
 MR. LITTEN replied that certain cruise lines have the state                   
 museums on their tours, primarily Holland America in Juneau which             
 uses the state museum exclusively.  In the past often when state              
 starts looking at fees for admission into the museums, they are               
 operating on their calendar year.  The tour companies are in the              
 position where they must forecast and set their tariff as much as             
 a year to eighteen months ahead of time.  They've had problems                
 with the lack of flexibility on the state's behalf as they'll                 
 implement or increase fees right before the season starts.  The               
 tour companies don't have the chance to incorporate that in which             
 forces the operators to bypass the attraction for the entire                  
 year.  HB 328 would benefit organizations so they would have the              
 ability to negotiate and wouldn't be facing that situation.                   
 Number 153                                                                    
 CHAIRMAN KOTT asked if the fees were negotiated on an annual                  
 basis or if they were they based on a head count.                             
 Number 157                                                                    
 MR. LITTEN stated the fees were negotiated annually as well as on             
 a head count basis.  For example, if they bring in 10,000 people              
 the price might go down from $2.00 to $1.80.                                  
 Number 168                                                                    
 that Gray Line of Alaska is a subsidiary of Holland America                   
 Cruise Lines.  Testified in support of HB 328.  He explained it               
 is a budgetary situation for their company.  They pay fees to                 
 many different entities.  He gave an example of a situation that              
 has occurred when the fees were changed.  He said last year they              
 were paying $1.60 to the museum and the price then jumped to                  
 $3.00.  His company told him they would have to drop something                
 from the tour because the budget was already set in concrete.  In             
 1986, they dropped the museum from their tours when the price                 
 changed from $1.00 to $2.00.                                                  
 Number 189                                                                    
 CHAIRMAN KOTT asked what he thought the most substantial effect               
 would be if HB 328 were not adopted.                                          
 Number 192                                                                    
 MR. PIVAL responded they probably wouldn't include the museum                 
 this year.  This would hurt their tour because the museum is an               
 integral part of the city tour and the passengers would feel they             
 were missing something.  He added that for the tours that don't               
 include the museum, they refer passengers to it.                              
 Number 204                                                                    
 DEPARTMENT OF EDUCATION (DOE), testified in support of HB 328.                
 As Mr. Dozier indicated this problem arose when the department                
 changed their regulations and increased the fees to $3.00.  She               
 said they did not have the flexibility to negotiate group rates.              
 In the past they would negotiate group rates with the minimum                 
 amount of people being 1,500 per season.  This then increased to              
 15,000 people per season.  She said the way their regulations are             
 written, children under 19 are admitted free.  Anyone over 19 is              
 $3.00.  They would like the ability to negotiate group rates as               
 was done in the past.                                                         
 Number 222                                                                    
 CHAIRMAN KOTT asked if those prices were the same for both the                
 Sheldon Jackson State Museum and the Alaska State Museum.                     
 MS. PETERSON answered yes.                                                    
 There being no further witnesses, CHAIRMAN KOTT closed public                 
 testimony on HB 328.                                                          
 Number 233                                                                    
 REPRESENTATIVE BEVERLY MASEK noted there was a zero fiscal note.              
 She referred to line 5 of the bill which states, "The department              
 may establish by regulation..." and asked if this would put an                
 added cost to the state.                                                      
 Number 241                                                                    
 CHAIRMAN KOTT stated the operative word is "may."  They are                   
 taking the conservative approach, thus the reason for the zero                
 fiscal note.                                                                  
 Number 244                                                                    
 MS. PETERSON replied the department had promulgated new                       
 regulations which became effective in April of this year.  They               
 don't anticipate writing more regulations to negotiate group                  
 contracts if HB 328 is passed.                                                
 Number 251                                                                    
 REPRESENTATIVE MASEK asked if the state museum was for profit or              
 Number 257                                                                    
 MS. PETERSON explained these are state museums funded through the             
 state.  They do have program receipt authorization.  They                     
 received approximately $140,000 last year in museum fees.  Ms.                
 Peterson noted the legislature has given the department the                   
 program receipt authorization to receive those funds.                         
 Number 265                                                                    
 REPRESENTATIVE MASEK said if the price is going to be reduced for             
 group rates, would that affect the overall amount of money the                
 state would contribute.  She asked what the fees are used for.                
 Number 272                                                                    
 MS. PETERSON stated that the DOE feels if they do not have the                
 authority to negotiate with groups, these groups may not come in              
 large groups to the museum.  The DOE will possibly lose revenue.              
 She noted that Bruce Kato, Director of Museums, could answer what             
 the actual fees were used for.                                                
 Number 278                                                                    
 EDUCATION, stated the funds were used for contractual services,               
 as well as for supplies.  Through the years the museum has lost               
 funds from those two accounts.  In 1986, when they began to                   
 charge admission, those funds were used to compensate some of the             
 losses in their program.  The legislature has the authority of                
 $158,600 that it allows the museum to use.                                    
 REPRESENTATIVE GENE KUBINA joined the meeting at 3:25 p.m.                    
 Number 287                                                                    
 REPRESENTATIVE MASEK surmised this would effect all museums                   
 MR. KATO clarified that there are only two state museums within               
 DOE, the Alaska State Museum located in Juneau and the Sheldon                
 Jackson Museum located in Sitka.                                              
 Number 294                                                                    
 REPRESENTATIVE NORMAN ROKEBERG inquired if the museum in                      
 Fairbanks was run by the university.                                          
 MR. KATO replied this was correct.                                            
 Number 297                                                                    
 CHAIRMAN KOTT encouraged anyone who had not been through the                  
 state museum in Juneau to do so.                                              
 REPRESENTATIVE ELTON made a motion to move HB 328 out of the                  
 House Labor and Commerce Committee with individual                            
 recommendations and with the attached zero fiscal note.                       
 Number 306                                                                    
 CHAIRMAN KOTT asked if there were objections.  Hearing none, HB
 328 passed out of the House Labor and Commerce Committee.                     

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