Legislature(1993 - 1994)

04/17/1993 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 115:  EXTEND TOURISM MARKETING COUNCIL                                    
  Number 278                                                                   
  CHAIRMAN VEZEY called the committee back to order at 9:15                    
  a.m. and read the title to HB 115, then called for                           
  Number 282                                                                   
  joined the committee to testify in favor of HB 115.  He                      
  stated it is critical for HB 115 to receive a prompt                         
  approval in order for 1994 marketing and advertising plans                   
  to be made in time.  He stated the Alaska Tourism Marketing                  
  Council's (ATMC) Vacation Planning Guide is the primary                      
  marketing tool for many small Alaska tourism businesses, and                 
  any delay could jeopardize their 1994 plans.  He also stated                 
  if HB 115 is not passed, larger tourist businesses will go                   
  on with their marketing plans because they have the                          
  necessary money, but small businesses will be irreparably                    
  Number 323                                                                   
  CHAIRMAN VEZEY stated he had serious concerns with ATMC's                    
  evolution since its incorporation as a state funded agency                   
  in 1988.  He stated he had great concerns about ATMC's                       
  apparent position on Fish and Game issues.                                   
  Number 340                                                                   
  MR. JACOBSEN stated he felt ATMC did not voluntarily jump                    
  into the controversy over the aerial wolf hunt, but did                      
  react to comments attributed to state Fish and Game                          
  officials in the New York Times, stating they had designed                   
  the hunt as an aid to building a tourist attraction.  He                     
  said the ATMC had no position on Fish and Game issues; they                  
  were interested in building tourism.                                         
  Number 369                                                                   
  CHAIRMAN VEZEY stated he had concerns about the fact that                    
  ATMC officials had apparently not filed Alaska Public                        
  Offices Commission (APOC) Conflict of Interest statements                    
  until 1991, and asked why that was.                                          
  Number 385                                                                   
  MR. JACOBSEN stated he could not speak for others, but he                    
  personally had filled out a statement previous to that.                      
  Number 391                                                                   
  CHAIRMAN VEZEY stated he was told by APOC that only two or                   
  three ATMC members had filed statements in the last three                    
  MR. JACOBSEN said he was surprised, and he would personally                  
  remind AVA members to file APOC statements in the future.                    
  Number 408                                                                   
  COUNCIL, joined the committee to testify in favor of HB 115.                 
  She reiterated the need for HB 115 to be passed in order for                 
  small Alaska tourist businesses to be successfully promoted                  
  in the next year, and stated the prompt passage of HB 115                    
  was needed because of the long lead time necessary for a                     
  successful marketing program.  On the topic of public                        
  disclosure, she stated she knew ATMC board members'                          
  statements were being monitored, because she knew of at                      
  least one member who had been fined for not filing in time.                  
  Number 450                                                                   
  CHAIRMAN VEZEY asked about the financial relationship                        
  between the three agencies participating in the ATMC                         
  marketing program.                                                           
  Number 457                                                                   
  MS. LINDGREN stated the ATMC was joined by the State                         
  Department of Commerce and Economic Development and the                      
  Alaska Visitors Association to handle the in-kind cash                       
  contributions made by ATMC members.  She noted since a 1991                  
  auditor's report, that relationship has been modified in                     
  accordance with the auditor's report.                                        
  Number 468                                                                   
  CHAIRMAN VEZEY asked why the profits generated under ATMC's                  
  marketing plan became an issue for auditors.                                 
  Number 472                                                                   
  MS. LINDGREN explained that the profits themselves were not                  
  a problem, but rather the timeliness of their reporting.                     
  She stated that the auditors wanted funds transferred and                    
  accounted for at the end of each fiscal year, while Commerce                 
  and Economic Development wanted it done at the end of the                    
  calendar year.  She stated this point is still in dispute.                   
  Number 479                                                                   
  CHAIRMAN VEZEY asked what happened to the interest gained                    
  from funds placed in the bank for use in ATMC's matching                     
  grant program.  He asked if that interest was turned over to                 
  the state or used for the matching grant program.                            
  Number 488                                                                   
  MS. LINDGREN stated the interest would go to the matching                    
  grant fund, which legislators knew when they created the                     
  program.  She said the auditors felt the interest should be                  
  turned over to the state, and that it wasn't a question of                   
  misappropriation of funds, but the timeliness of the deposit                 
  and then subsequent use.                                                     
  Number 503                                                                   
  CHAIRMAN VEZEY stated after reading the auditor's report it                  
  seemed to him the dispute centered around the handling of                    
  profits and the handling of the interest from them.                          
  MS. LINDGREN said ATMC is going on a ruling from the                         
  Department of Law stating that ATMC's handling of both was                   
  in accordance of the law.                                                    
  CHAIRMAN VEZEY stated it seemed one party was taking                         
  advantage of another.  He noted the auditors' concern with                   
  money spent by the state on a post Exxon Valdez spill                        
  project, and wondered if the state got the benefit of its                    
  prorated share.                                                              
  Number 524                                                                   
  MS. LINDGREN stated the auditors' concerns grew out of the                   
  $14 million marketing campaign Exxon mounted in the wake of                  
  the spill, which the state went along with for $400,000.                     
  She stated the auditors' concerns about how the money had                    
  been spent and accounted for and were legitimate, and that                   
  new ATMC rules will not allow such a transaction again; and                  
  in the future, a similar program would have to be mounted                    
  with a donation from a company.                                              
  TAPE 93-42, SIDE ONE                                                         
  Number 000                                                                   
  CHAIRMAN VEZEY asked about the $400,000 cited by auditors as                 
  not spent on tourism related marketing or administrative                     
  Number 012                                                                   
  MS. LINDGREN responded that the entry in the audit book                      
  refers back to the Exxon campaign she previously explained.                  
  Number 040                                                                   
  CHAIRMAN VEZEY noted the auditors' concerns that the ATMC                    
  sometimes did not follow the Alaska Bidders' Preference when                 
  it contracted for work.                                                      
  Number 046                                                                   
  MS. LINDGREN explained that the problem was a function of                    
  using subcontractors for subcontractors.  She stated some                    
  subcontractors opted to use Outside help instead of Alaskans                 
  in previous years.  She said ATMC has now directed its                       
  advertising agency and its subcontractors to use Alaskan                     
  talent and to follow the Alaska Bidders Preference when                      
  Number 070                                                                   
  CHAIRMAN VEZEY referred to the audit report about money that                 
  had been determined to be spent improperly, and asked if                     
  that issue had been resolved.                                                
  Number 080                                                                   
  MS. LINDGREN stated the money in question had gone to a                      
  research contract that had been in contention.  She stated                   
  the issue had been discussed and resolved with the auditors.                 
  Number 090                                                                   
  CHAIRMAN VEZEY referred to the auditor's complaint that                      
  ATMC's accounting system was not compatible with state                       
  procedures, and asked if that had been resolved.                             
  Number 103                                                                   
  MS. LINDGREN replied that the auditors' disagreement was not                 
  with ATMC, but rather with Commerce and Economic                             
  Development.  She said the auditors found no problem with                    
  the accounting itself, but rather how far into smaller                       
  components it had been broken into.                                          
  Number 119                                                                   
  CHAIRMAN VEZEY expressed concern about the makeup of the                     
  ATMC board, saying he hoped small business' concerns were                    
  being addressed, and he wasn't sure small business was being                 
  appropriately represented.                                                   
  Number 133                                                                   
  MS. LINDGREN stated she felt small business was being well                   
  represented on the board, the result of having 21 board                      
  members for a 900 member group.  She said of the 21 members,                 
  17 are Alaskans, and the ATMC had formed a Small Business                    
  Task Force specifically to address the concerns of smaller                   
  Number 153                                                                   
  joined the committee to testify in favor of HB 115.  She                     
  stated the corporation was actively involved in developing                   
  rural tourism and currently represents more than 200                         
  businesses in the rural sector.  She said HB 115 was vital                   
  for them to actively market the rural businesses, especially                 
  to take advantage of the eco-tourism boom.                                   
  Number 182                                                                   
  VISITORS BUREAU (ACVB), testified in favor of HB 115, saying                 
  the ACVB depends heavily on the ATMC's Vacation Planner to                   
  market their product.  She stated the planner is also the                    
  only way for smaller businesses to get their foot in the                     
  door to compete with the larger companies, and to take away                  
  the ability to market in the planner would hurt them the                     
  most.  She noted that 783 of 900 ACVB members were small                     
  businesses with five employees or less, and she urged the                    
  committee to pass HB 115 for their sake.                                     
  Number 251                                                                   
  CHARLES DERRICK testified by teleconference from Fairbanks                   
  in opposition to HB 115.  He stated the tourist industry was                 
  one of the major opponents of the wolf hunt, especially                      
  Westours.  He asked rhetorically if the tourism industry                     
  could impact the control of one Alaskan resource, and which                  
  one would be next.                                                           
  Number 281                                                                   
  ASSOCIATION, testified by teleconference from Fairbanks and                  
  stated the association did not oppose funding of the ATMC,                   
  but he was concerned about the impact the industry had on                    
  the wolf hunt.                                                               
  Number 293                                                                   
  CHAIRMAN VEZEY stated he intended to take HB 115 up in                       
  committee in the next session, at which time he expected it                  
  to pass easily.  He stated that before it left House State                   
  Affairs, he did have several questions that needed to be                     
  answered.  With that, he adjourned the meeting at 9:55 a.m.                  

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