HB 222-AK PROMOTION & MARKETING FUND/BOARD  8:42:56 AM CO-CHAIR HERRON announced that the next order of business would be HOUSE BILL NO. 222," An Act establishing and relating to the Alaska Promotion and Marketing Board and the Alaska promotion and marketing fund; relating to marketing tourism contracts and campaigns; and providing for an effective date." 8:43:08 AM REPRESENTATIVE ALAN AUSTERMAN, Alaska State Legislature, stated that his experience on the House Finance Committee led him to understand that Alaska is not marketed as a business destination; in fact, new businesses are not encouraged to come to the state and bring jobs and income. He opined a board or fund within the Department of Commerce, Community & Economic Development (DCCED) tasked to work on promoting Alaska would accomplish this by including all industries such as seafood, tourism, mining, and agriculture. However, because the legislature cannot "tell the department what to do," the initial concept of the bill will be addressed next year, thus HB 222 is a starting point for: A methodology to bring all of the industries to the table and determine how to fund a marketing effort for each individual industry. Representative Austerman anticipated that changes will be made to the proposed legislation, and he expressed his hope that testimony from the affected industries will be heard. 8:46:27 AM ASTRID LIEVANO, Staff, Representative Alan Austerman, Alaska State Legislature, said HB 222, Section 1, adds the Alaska Promotion and Marketing Board to the list of boards and commissions that are subject to the public official financial disclosure chapter. Section 2 adds new sections to create the Alaska Promotion and Marketing Fund and the Alaska Promotion and Marketing Board. Section 44.33.950 creates the fund, and directs DCCED to administer the fund in consultation with the board. Section 44.33.955 identifies the money that is to be in the fund and states that the fund is not a dedicated fund. Section 44.33.960 states the purpose of the fund, which is to promote and market industries that broaden the economic base of the state and provide jobs and business opportunities for Alaska residents. Section 44.33.965 states that the fund money shall be used, subject to appropriation, to make grants to private entities for projects that promote the fund purpose, and to pay administration costs for the new sections. Section 44.33.970 establishes certain requirements for grants from the fund, addresses the type of entity that may be a grant recipient, addresses the matching requirements of 50 percent of the grant amount, and sets a maximum amount of 75 percent per fiscal year for grants to entities in established industries. Section 44.33.975 establishes the board, including the number of members, and the appointment of members by the governor. Section 44.33.980 lists the board's duties including developing a methodology for prioritizing projects; identifying criteria for evaluation achievement of the fund purpose by proposed projects; determining grant applicant eligibility criteria. Section 44.33.985 authorizes the board and DCCED to adopt regulations for the new sections. Section 44.33.990 defines the terms for the new sections. Section 3 repeals certain sections relating to marketing tourism contracts and campaigns. Section 4 establishes a sunset date of 7/1/19. Section 5 provides for the appointment of the first members of the board within one month of the effective date and with staggered terms. Section 6 makes the Act effective 1/1/12, unless changed. 8:52:32 AM REPRESENTATIVE GARDNER asked whether Section 3 repeals the funding structure for the Alaska Travel Industry Association (ATIA). REPRESENTATIVE AUSTERMAN clarified that it does repeal the current funding methodology through ATIA and DCCED, and moves the qualified trade association concept over to a new board that is created by the bill. In further response to Representative Gardner, he explained that the change would apply to any trade association or group that wants to market Alaska, such as the Alaska Seafood Marketing Institute (ASMI). Details will be worked out during the interim by the committee, after hearing from industry. 8:55:09 AM REPRESENTATIVE GARDNER recalled a meeting in Sitka of a group of rural communities interested in promoting tourism with a focus different from that of ATIA. She asked whether this group could apply to the new board for a grant. REPRESENTATIVE AUSTERMAN said yes, and added that there will be a lot of discussion about the scope of tourism that would be included. He opined all groups can come to the board after its criteria is established. 8:56:21 AM REPRESENTATIVE MUNOZ asked for confirmation that ASMI would be eligible to compete for funds. REPRESENTATIVE AUSTERMAN indicated yes; ASMI currently qualifies for marketing funding, although it is funded differently and at a lower percentage than ATIA. Marketing funds are an annual argument for the legislature, and this board would work with the industry to identify funding. The legislature would still fund the marketing fund each year, which could mean more money for marketing in the long-term, with the addition of new businesses. 8:58:23 AM REPRESENTATIVE FOSTER pointed out the board will determine what constitutes an "emerging market," and inquired about that process. REPRESENTATIVE AUSTERMAN said he did not know. He recalled how - during past troubled times for the seafood industry - matching funds and federal money was used to bring the fishing industry back from a period of low prices with incentives on new and developing products. CO-CHAIR HERRON opened public testimony. 9:00:21 AM DEB HICKOK, Chair, Board of Directors, Alaska Travel Industry Association (ATIA), said the ATIA board shares Representative Austerman's passion for growing and diversifying Alaska's economy. She relayed that the ATIA board of directors works with its 11,000 member businesses to develop and market Alaska as a travel destination; in fact, the board supports a marketing committee structure because it gives large and small businesses a direct voice in the marketing program. However, the ATIA board also seeks to scrutinize the proposed marketing process for possible improvements. Ms. Hickok offered that the board will collaborate with the legislature and the administration, and suggested an independent audit of the marketing committee structure and programs during the interim discussions regarding the proposed legislation. Referring to the bill, she opined Section 3 - that repeals the qualified trade association (QTA) - is premature, and has negative consequences to the travel industry. Ms. Hickok urged for more collaboration with the travel industry during interim. 9:04:43 AM REPRESENTATIVE AUSTERMAN recently heard that an audit of ATIA was under consideration; however, this bill does not have anything to do with ATIA and its ability to perform its task. He stressed that HB 222 does not relate to the operations of ATIA; in fact, this legislation creates a new structure for how marketing is funded by the state. [HB 222 was heard and held.] 9:06:11 AM Chair Herron turned the gavel over to Vice Chair Olson. 9:06:21 AM