Legislature(1993 - 1994)
04/17/1993 08:00 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 testimony. Number 282 BOB JACOBSEN, PRESIDENT, ALASKA VISITORS ASSOCIATION (AVA), 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 hurt. 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 years. MR. JACOBSEN said he was surprised, and he would personally remind AVA members to file APOC statements in the future. Number 408 TINA LINDGREN, EXECUTIVE DIRECTOR, ALASKA TOURISM MARKETING 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 costs. 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 possible. 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 business. Number 153 ANN CAMPBELL, COMMERCIAL ENTERPRISE DEVELOPMENT CORPORATION, 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 LINDA MCLAUGHLIN, PRESIDENT, ANCHORAGE CONVENTION AND 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 RALPH SEEKINS, PRESIDENT, ALASKA WILDLIFE CONSERVATION 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. ADJOURNMENT 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.