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]