Legislature(1997 - 1998)
04/28/1998 09:15 AM Senate FIN
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* first hearing in first committee of referral
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= 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."
CS FOR SENATE BILL NO. 350
"An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council; and
providing for an effective date."
Senator Donley advised the committee there was a proposed CS
in their files relating to this bill. He explained that
there had been a work party relating to the bill and the new
CS was due to a few technical changes that had to be made.
He said a change in the title was noted in the new CS.
Further, on page four, line eleven, the word "may" was
deleted and "shall" was inserted. Senator Donley MOVED CSSB
350(FIN) "H" version as working document before the
committee.
Senator Pearce OBJECTED saying she would like to hear more
about the change on page four.
SUSAN BURKE, Esq., Law Firm of Gross and Burke was invited
to join the committee. She briefly explained the title
problems with the "F" version resulting in version "H" now
before the committee. In working with the department on
this legislation the Alaska Visitor's Association has really
tried to accommodate as much as they could, some of the
department's concerns. They would prefer "contracts" rather
than "grants". However, AVA would rather the "grant"
program. She said they wanted to provide the Legislature
with flexibility to ultimately determine whether it would be
a "grant" program or a "contract" program. Rather than
having to deal with a title change problem in the event the
Legislature ultimately concludes that "grant" is preferable
to "contract" this technical title change would provide that
flexibility. Regarding the issue of "shall" versus "may"
she explained that under version "F" it referred to a grant
program containing the "shall" language. In reading the
amendments the committee adopted that day there was nothing
in them that changed the original "shall" to "may". She
also noted that an amendment adopted at the committee's last
meeting to exempt contracts from the procurement code
requirement so they did not have to go through sole source
waivers did not get into either version "F" or "H". Since
it had been adopted on record, it was just a matter of
bringing it to the attention of the legislative Legal
Services. The inclusion of this particular amendment was
the reason the AVA was willing to change from "grant" to
"contract".
Section five, page four was new, 43.33.125 which describes
the contract program and it has at least a thirty percent
matching funds provision in it. Further on in the bill
there is an amendment to the bill to raise that percentage
to forty- percent minimum. She further noted that page
five, line twenty-six the word "may" should conform to
"shall".
BOB ENGLEBRECHT, Past President, Alaska Visitors Association
was invited to join the committee. He said the Legislature
had made it clear that they wanted the industry to
participate more in the funding of the marketing program and
therefore, they had been working on a program to do just
that. A "pay to play" program and many of the aspects of
the bill are integral to being able to raise the industry
match or contribution into marketing from the $1.5 million
level up to $6 million. Initially they were in favor of a
grants program, however, in working with the Department of
Commerce they are now comfortable with the contract concept
as it will work better for them and they will be able to
negotiate with the Trade Association. He felt they needed
some sort of assurance that they would have a contract with
the State and it would be on a year to year basis. He
explained the whole philosophy of moving the different
facets of tourism marketing within the State into a single
entity that can be more effective and coordinated in
promoting the State of Alaska and also would provide a
mechanism for raising the funding for the industry match.
There were concerns regarding the amendment language that
would allow for multiple smaller contracts that would
disperse this effort. By consolidating everything into one
place there would then be the best chance of being the most
effective and making the best use of funds available to
promote tourism.
Senator Donley asked if the concerns were with the proposed
CS or the amendment. Mr. Englebrecht indicated they were
with the amendment.
Senator Donley MOVED the proposed CS be amended on page
five, line twenty-six changing "may" to "shall". WITHOUT
OBJECTION it was ADOPTED.
Senator Donley MOVED amended CSSB 350(FIN) "H" be adopted as
working draft. Senator Pearce OBJECTED.
(Tape #145, Side A switched to Side B.)
Co-chair Sharp asked for roll call vote. By a roll call
vote of 5 yeas (Sharp, Donley, Torgerson, Parnell, Phillips)
and 1 nay (Pearce) it was ADOPTED. The absence of Senator
Adams was noted.
Susan Burke explained amendment 1(a) to the "F" version and
that it had not been incorporated into the "H" version.
Senator Donley noted that his staff said the amendment was
not before them at the time. Senator Donley briefly
reviewed the proposed CS and noted that it was in it.
Senator Donley recalled that the amendment had been
separated into two parts and his notes show that both parts
1(a) and 1(b) had passed and should have been incorporated
into the "F" version and "H" version of the draft. Ms.
Burke advised Senator Donley that amendment 1(b) was
included in the "H" version on page four at line five.
Senator Donley MOVED amendment 1(a) into the "H" version and
WITHOUT OBJECTION it was ADOPTED.
Senator Torgerson MOVED amendment #2. Senator Donley
OJBECTED. Senator Torgerson explained that it incorporated
into version "H" a series of repealers regarding existing
statute. His concern was that if individuals were not a
member of the Trade Organization information could be
withheld not sold or not be given to them.
Senator Donley asked Senator Torgerson to explain the effect
of the brackets around [without discrimination]. Senator
Torgerson said he assumed that it meant one did not have to
be part of the Trade Organization. All one would have to do
was be promoting Alaska tourism product or service and then
would be eligible to purchase or lease the mail lists. He
further noted a technical amendment on line nine, "list"
should be "lists".
Senator Donley further inquired if the brackets meant that
clause was being deleted? Senator Torgerson said no and
that the brackets should be ignored.
Senator Donley spoke to his objection stating that the
material should be available to the public, but he also felt
people should not be able to get a free ride without paying
membership dues. He felt that even though the materials
should be available to everyone, they should have to pay as
much as if they had participated as a member of the
association, which paid for the development of the
materials. Otherwise, no one will join and everyone will
get the membership lists and free load off the dues paying
members.
Senator Torgerson said he did not disagree with this but due
to the fact that public money was involved the materials
should be available to Alaska residents. He felt it was not
proper to have to belong to the association in order to have
access to the membership lists.
Senator Phillips suggested having members and non-members
fee structures? That way the material would still be
available to everyone, but to non-members at a slightly
higher price. That would protect both parties' interests.
Senator Torgerson did not disagree with that, however noted
there was no fee structure within the bill. The Trade
Organization would have to figure this out.
Senator Parnell said he concurred with both Senator
Torgerson and Senator Donley. He felt the lists needed to
be provided because public money was involved and yet also
understood that individuals were paying to be part of the
membership organization. Senator Torgerson responded that
was the reason he went back to existing statute.
Senator Pearce asked if the language was presently in
statute? Senator Torgerson noted it was AS 44.35.735. She
noted with sympathy Senator Torgerson's outlook regarding
the bill and the amendment (due to excess noise in committee
room remainder of conversation is unintelligible.)
Co-chair Sharp said that since the State was still going to
continue putting sixty percent of the money into this
organization he wanted to make sure the ones who choose not
to join would still have access to the membership list. He
also noted that he would not have objection to a surcharge
but would object to a prohibitive surcharge.
In response to Senator Pearce, Ms. Burke explained that the
details of the bill would be graduated. It would start out
in the next fiscal year at status quo, as it would take time
to develop the kind of funding mechanisms that are
contemplated in the plan. She said the legislation would
provide in just three years time it would go up from the
present match another ten percent. That was chosen because
in three years time getting all the way to the reversed
sixty/forty probably is not going to be possible. She did
not think there had been any failure to disclose that,
rather the graduated percentage of funding was set out in
the plan provided the Legislature.
Senator Pearce said she thought there was a commitment from
the industry to go to sixty percent and agreed a time for
transition should be allowed. She said it was human nature
to not pay any more than one has to for any service.
In response to Senator Pearce, Senator Torgerson said he did
not believe ARDORS and other non-profits that receive monies
from the Legislature have special legislation that would
provide all the information and materials they generate are
the sole property of that organization and are not subject
to the "Freedom of Information Act" or the "Public Records
Act". This goes beyond just giving money to a normal non-
profit.
Bob Englebrecht further responded to the amendment and the
comments of Senator Pearce. He said the "pay to play"
aspect of the program is integral to its success and the
industry is committed to getting to the $6 million level.
They hope to surpass that amount. He said there was no
intention to exclude others from being able to utilize the
lists. He felt language could be added that would clarify
the specified fees. He said they wanted to set this plan up
outside the normal procurement procedures because it would
then give the industry a better ability to respond and do
creative things with marketing. It would not diminish the
industries' commitment, but would provide some greater
flexibility for them to go beyond what the specific contract
may be with the State.
Senator Phillips suggested the words "to members and non-
members" be inserted. Then a price structure could be
figured out. Senator Parnell did not feel that would get to
the issue. He agreed with Senator Torgerson that the list
should be sold to all individuals upon request, but also
would support language that would require a different fee
structure so there would not be a disincentive to joining
the qualified organization.
Co-chair Sharp said they were being asked to contribute
sixty percent, exempt them from the State procurement code,
give them an exclusive contract and then not make the list
available to anyone else. He has no problem with a higher
cost as long as it was not a blackmail cost.
Mr. Englebrecht said he had one more request not related to
the amendment presently before the committee, however, felt
it should be included. Perhaps another line be put in that
the mailing lists would be provided to the State free of
charge. He said the departments did not want to have to pay
in addition to the contribution being made.
Ms. Burke said the language of the present draft that said
the qualified trade association shall provide to the
department or division on request any materials that are
produced or information that is gathered under the contract
should cover that. It was never contemplated to charge the
State.
Senator Donley said the words "without discrimination" could
be deleted because they prevent a different schedule of fees
for non-paying non-members. Senator Donley MOVED to amend
amendment #2 by deleting the words "without discrimination".
Senator Torgerson OBJECTED.
Senator Torgerson requested the department respond as to how
this would work because it was existing language. He asked
if there was a different pay structure for members and non-
members of AVA or Alaska Tourism and Marketing? Mr.
Englebrecht indicated there was no differential. He said it
was central to what they were trying to accomplish in that
people need to come in and participate in order to raise the
extra funds that the Legislature has told them they were
looking for. Perhaps language could be provided that would
essentially deal with the request of Senator Donley. He
further proposed language basically saying a non-paid
participant in the trade association could access materials
by including an amount equal to the qualified trade
association participation fee. They were trying to
participate in the "pay to play" program.
Senator Torgerson indicated by the letters he was receiving
that this bill did not have one hundred percent support. He
thought it would be better to put into statute the functions
that were available without membership and the ones that
were the property of the organization only. However, he was
trying not to get into all this.
Mr. Englebrecht said currently the concept was to have
people participate in this program. He felt they could come
up with a way to accommodate those that do not want to buy
into the whole agenda, however, they do need to pay at a
level that is commensurate with what people who are
participating in the program are paying. Otherwise the
program would be completely undermined.
Senator Torgerson said that without seeing this in writing
he was going to continue his opposition to Senator Donley's
amendment.
Co-chair Sharp said he assumed that since the State was
paying sixty percent of whatever the program was, he would
not have a problem with others having to pay forty percent.
Senator Torgerson said he concurred.
Senator Parnell said that whether one was a paid member or
not if there was access to the list then one was getting the
benefit of the State's share. He said that one paying as a
member was getting other services in addition to access to
the list. He suggested they allow the organization to
charge an additional surcharge to non-members that was
equivalent to that portion paid by members for that benefit
of having a list. In that manner both would be paying the
same amount for the list, taking into account the membership
fees. He noted the language was rather awkward at this
point and said perhaps they could adopt Senator Donley's
amendment, which deletes the words "without discrimination".
He would then move an amendment to the amendment adding
"that the purchase or lease price to an individual or
business that is not a paid participant in the qualified
trade association's marketing program may include an amount
that takes into account the amount of participation fee
attributable to members right of access to the list". He
said they were working on specific language with Ms. Burke
to accomplish this.
Senator Torgerson said he liked the Co-chair's
recommendation and would like to see that integrated into
the bill that the cost may not exceed the cost of the
private trade organization's share of the total production.
In other words, that would come back to the sixty-forty
split. He did not intend that an individual have to pay the
membership fee in order to receive a five-dollar list.
Senator Parnell concurred and did not feel that one should
have to pay the membership fee because members received
other benefits and services.
Co-chair Sharp indicated at this time he was unwilling to
have a vote on the amendment to the amendment until they
could see it in writing. He felt the amendment at this time
was complicated.
Mr. Englebrecht briefly responded also noting complications
with the structure.
Co-chair Sharp asked a roll call vote be taken on Senator
Donley's amendment to amendment #2, deleting the words
"without discrimination". By a roll call vote of 4 yeas
(Pearce, Donley, Parnell, Phillips) and 3 nays (Sharp,
Torgerson, Adams) Senator Donley's amendment to amendment #2
was ADOPTED.
Senator Parnell MOVED amendment to amendment #2 and asked
the committee stand at ease while it was being copied.
(The committee took a brief at ease and then reconvened.)
Senator Parnell asked Ms. Burke to read the amendment 2(c)
into the record.
Ms. Burke noted that the amendment had been quickly written
and may seem awkward but would be touched up by Legislative
Legal.
"The purchase or lease price to an individual or business
that is not a paid participant in the qualified trade
association's marketing program may include an amount that
takes into account the amount of the qualified trade
association's participation fee attributable to a member's
right of access to the list."
Senator Torgerson OBJECTED.
(There followed a brief pause on record.)
Senator Parnell indicated that this amendment would just be
added where Senator Donley's amendment deleted "without
discrimination".
Senator Torgerson WITHDREW his objection. WITHOUT OBJECTION
amendment #2(c) was ADOPTED.
Senator Torgerson MOVED amendment #2. Senator Pearce
WITHDREW her objection. Therefore, WITHOUT OBJECTION
amendment #2 was ADOPTED.
Co-chair Sharp SET ASIDE SB 350 at this time. He then
called HB 261.
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