Legislature(1997 - 1998)
05/02/1998 09:31 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 350
"An Act relating to tourism and tourism marketing;
eliminating the Alaska Tourism Marketing Council; and
providing for an effective date."
Co-chair Sharp noted that the committee had a new CS for
the bill and asked for an explanation of differences from
the previous version.
JEFF BUSH, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE AND
ECONOMIC DEVELOPMENT (DCED), informed the committee that
DCED had spent a significant amount of time working with
the Alaska Visitor's Association (AVA); the new proposed CS
was a compromise acceptable to both the state and AVA.
Mr. Bush provided an overview of the legislation. The
department would be appropriated money annually (as part of
a contractual line-item) that would be used for the
marketing program. The state, through the Division of
Tourism and DCED, would put forth the items they wanted
done in a tourism marketing program; a large percentage of
that would be done as a large marketing program, but there
would be other smaller programs, such as the Tourism North
program. The state had to make an offer to the qualified
trade association under the contract, if the match were
met. All of the program could be done and matched, but the
trade association would have the right of first refusal on
all tourism-related contracts and could reject parts of the
program it did not want to do (for example, not wanting to
market tourism in Korea). The association could do the
piece internally or find another contractor to do the work.
Mr. Bush noted that on the Senate side, there had a been a
request to raise the match in the bill to equal the amount
put forth in the new millennium plan; the bill would raise
the match requirement in the private sector to 60 percent
after three years.
Co-chair Sharp noted that the draft being discussed was the
"L" version.
Senator Pearce MOVED to ADOPT the "L" version of CSSB 350
(FIN) (\L, 5/2/98, Cook) as a working document before the
committee. There being no objection, it was so ordered.
BOB ENGELBRECHT, PAST PRESIDENT AND BOARD MEMBER, ALASKA
VISITOR'S ASSOCIATION, testified that he did not dispute
anything said so far. He concurred that meetings with the
state had resulted in large areas of agreement and that the
CS was a compromise bill that AVA was comfortable with. He
referred to a letter from Tina Lindgren (the Executive
Director of AVA) that accurately characterized the position
of the association. He reported that the process of working
with AVA members and others in the visitor industry had
been thorough; the bill would make some changes to some
basic tenants, but the compromises were reasonable.
Senator Parnell queried language on page 3, line 21
regarding the right of first refusal. He questioned the
time-line of the right and wondered whether an entity could
essentially have it forever. Mr. Bush referred to the
section before that required a contract with a qualified
trade association willing to make the match, and would
require the state to enter into the contract. He offered a
possible scenario of when the right of first refusal might
come up: Mid-contract, the Division of Tourism could decide
it wanted a television ad on the Marine Highway System. The
department would have to go to the qualified trade
association and offer them the opportunity to produce the
commercial, provided they came up with the 50 percent
match.
Senator Parnell clarified that the provision would not
extend to the initial contract with the qualified trade
association, but to the other contract. Mr. Bush responded
that it would essentially extend to all contracts; the
original contract could be a right of first refusal in a
sense, because the department would have to go to them up-
front and offer them the contract for a year.
Senator Parnell asked whether the trade association would
have the right of first refusal to extend the specific
contract or any other tourism-related contract. Mr. Bush
responded that they would not have a right of first refusal
to extend the contract; if there were two qualified trade
associations in a particular year, the bill would exempt
the particular contract from procurement, but would not
prevent the department from going through some limited
solicitation process if there were two qualified trade
associations at the beginning of the year.
Senator Parnell asked whether the right of first refusal
language was anywhere else in the bill besides page 3,
lines 21 through 25. Mr. Bush responded no.
Senator Parnell commented that he read the right of first
refusal to extend to any other tourism-related contract.
Mr. Bush agreed; given the match and money-raising
requirements, he opined that it would be very difficult for
another qualified trade association to come forward.
Senator Torgerson pointed to page 4, line 7 and the word
"if." He noted that there had been a previous concern about
the association not making the [mailing] list available
after the state made a substantial investment into the
marketing council. In all previous drafts, there had been
agreed-upon and adopted language; now it seemed there was a
stipulation that if the department decided, it could let
others into the market. He had a problem with the word "if"
as it could leave the power to say yes or no on selling any
list in control of the board of the qualified trade
association. Mr. Bush answered that the language was put in
by drafters trying to re-work original language adopted by
the committee. The current version of the bill stipulated
that the list had to be made available to every person at
the same price (higher for non-participants) if the right
to use a mailing list was sold.
Senator Torgerson maintained that a non-member could also
be told that the list was not being sold, but the list
could be provided to members. He objected to the way it was
written. Mr. Bush answered that the language could be
corrected through an amendment.
Senator Torgerson wanted more time to study the document.
He noted that he had other concerns. He referred to
Amendment 6 (offered by himself) that had stipulated that
materials produced would be turned back to the state after
the contract was over. He asked why the language was not in
the version being discussed. Mr. Bush responded that the
issue had been dealt with through a change made on page 4,
lines 3, 4 and 5; all the materials were made joint
property of the qualified trade association and the
division.
Co-chair Sharp pointed out that the measure had started and
remained at 30 percent until three years had passed. He
thought it would be difficult to create steps in the CS
because of Sections 6 and 7.
In response to a question regarding the intent to report
the bill out of committee, Co-chair Sharp thought the bill
would die if it did not move out right away. There was
discussion about the need for an amendment.
Mr. Bush detailed that the problem (related to the mailing
lists) was with the word "sells" and that changing the
language to "provides" would fix it. The language would
then be "if the qualified trade association provides the
right to use a mailing list generated under the contract,
the list must be made available to every person at the same
price." He noted that there could be a charge based upon a
pro-rata percentage of the participation fee for non-
members.
Senator Torgerson MOVED to ADOPT conceptual Amendment 1:
On page 4, line 7
Delete "sells" and insert "provides"
There being no OBJECTION, Amendment 1 was adopted.
Mr. Bush spoke to the fiscal note by the department, which
had not been drafted or distributed. The fiscal impact was
related to the fact that the state would not longer get
program receipts but would contract the work out.
Senator Parnell MOVED to REPORT CSSB 350(FIN) from
committee with individual recommendations and the
accompanying fiscal note. There being no OBJECTION, it was
so ordered.
CSSB 350(FIN) was REPORTED out of committee with no
recommendation and attached fiscal note by the Department
of Commerce and Economic Development.
[There was a recess for floor session]
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