Legislature(1995 - 1996)
05/05/1995 03:10 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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. GEORGE DOZIER, LEGISLATIVE ASSISTANT TO REPRESENTATIVE PETE KOTT, 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 up. 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 FRANK PIVAL, DIVISION MANAGER, GRAY LINE OF ALASKA, explained 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 SHEILA PETERSON, SPECIAL ASSISTANT TO THE COMMISSIONER, 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 non-profit. 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 BRUCE KATO, CHIEF CURATOR, ALASKA STATE MUSEUM, DEPARTMENT OF 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 statewide. 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.