ALASKA STATE LEGISLATURE  HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL  TRADE AND TOURISM  February 1, 2011 10:18 a.m. MEMBERS PRESENT Representative Bob Herron, Chair Representative Kurt Olson, Vice Chair Representative Neal Foster Representative Cathy Engstrom Munoz Representative Steve Thompson Representative Peggy Wilson Representative Berta Gardner Representative Chris Tuck MEMBERS ABSENT  Representative Wes Keller COMMITTEE CALENDAR  OVERVIEW(S): ALASKA SEAFOOD MARKETING INSTITUTE - ALASKA TRAVEL INDUSTRY ASSOCIATION - HEARD PREVIOUS COMMITTEE ACTION  No previous action to record WITNESS REGISTER RAY RIUTTA, Executive Director Alaska Seafood Marketing Institute (ASMI) Juneau, Alaska POSITION STATEMENT: Provided a PowerPoint presentation titled, "Alaska Seafood Wild, Natural & Sustainable," dated 2/1/11. RON PECK, President and Chief Operating Officer Alaska Travel Industry Association (ATIA) Anchorage, Alaska POSITION STATEMENT: Participated in a PowerPoint presentation titled, "Alaska Beyond Your Dreams. Within Your Reach." PATTI MACKEY, Chair Board of Directors Alaska Travel Industry Association (ATIA); Executive Director Ketchikan Visitors Bureau Ketchikan, Alaska POSITION STATEMENT: Participated in a PowerPoint presentation titled, "Alaska Beyond Your Dreams. Within Your Reach." ACTION NARRATIVE 10:18:21 AM CHAIR BOB HERRON called the House Special Committee on Economic Development, International Trade and Tourism meeting to order at 10:18 a.m. Representatives Herron, Tuck, Peggy Wilson, Munoz, and Thompson were present at the call to order. Representatives Olson and Foster arrived as the meeting was in progress. ^OVERVIEWS: ALASKA SEAFOOD MARKETING INSTITUTE - ALASKA TRAVEL INDUSTRY ASSOCIATION OVERVIEWS: ALASKA SEAFOOD MARKETING INSTITUTE - ALASKA TRAVEL  INDUSTRY ASSOCIATION  10:19:11 AM CHAIR HERRON announced that the only order of business would be overviews from the Alaska Seafood Marketing Institute (ASMI) and the Alaska Travel Industry Association (ATIA). However, he first invited Representative Tuck to speak on the subject of "a missed opportunity for Alaska." 10:20:26 AM REPRESENTATIVE TUCK agreed it is appropriate for the committee to address missed opportunities because they often happen due to a lack of vision and direction. He shared his vision to turn Alaska into a state with a smart economy, smart development, and a smart educational system that will create physical wealth for the state. Representative Tuck said he supports investments in agriculture, because it is important to have an independent food supply, and in infrastructure, because much of the reason America became a world superpower was due to the impact of the transcontinental railroads. Representative Tuck supported the idea of building a railroad to Russia, and pointed out that the building of Alaska began with a combination of the railroad, the Trans-Alaska Pipeline System (TAPS), and our constitution that ensures Alaska is an owner-state. He opined that the cheapest mode of international transportation is over water, followed by railroad. His vision also includes turning Port MacKenzie into an industrial park and continuing to support international shipping through the Ted Stevens Anchorage International Airport and/or the Fairbanks International Airport; in fact, this would provide Alaska with the cheapest modes of transportation - water and rail - and the fastest mode of transportation - air freight. Finally, Representative Tuck recommended following the example set by Texas and California, states that invested not only in science and technology through their university systems, but also invested in materials development and in prototype institutes, so that their recent graduates established innovative businesses, as happened in the Silicon Valley and in the petro-chemical industry in Texas. In fact, Texas received the highest value for its oil because of the value-added industry developed by the graduates from its educational system. Representative Tuck expressed his hope that the committee will provide a vision that will prevent future missed opportunities in the state, and leadership out of the country's current economic slump. 10:26:21 AM RAY RIUTTA, Executive Director, Alaska Seafood Marketing Institute (ASMI), informed the committee that ASMI has a very broad reach, internationally and domestically, marketing Alaska seafood around the world. He reminded the committee that it is a state corporation and a partnership of public and private sectors guided by a board of directors appointed by the governor. He pointed out that ASMI's charter prohibits it from marketing by individual brand or region; in fact, ASMI is the brand manager for all of Alaska seafood. Mr. Riutta said the most important part of ASMI's mission is its job to increase the economic value of the Alaska seafood resource. The ASMI board includes four large seafood processors, one small processor, two fisherman, and four ex-officio members: Senator Gary Stevens; Representative Bill Stoltze; Curtis Thayer, Deputy Director, Department of Commerce, Community & Economic Development (DCCED); a representative from the governor's office. In response to Chair Herron, he noted that the board of directors used to have 25 members and he opined "it was a very good move, reducing the size of the board." 10:30:40 AM MR. RIUTTA, in further response to Chair Herron, explained that board members' terms are for three years, and there is some turnover of the board members almost every year. He returned to his presentation and said ASMI is advised by the following committees: four specie committees, representing the broad spectrum of the fishing industry; operational committees, which oversee marketing department budgets; customer advisory panel, which is comprised of distributors from all over the world who are brought in to advise ASMI on how to improve its work. The panel includes retailers, food service distributors, broadline distributors, and frozen food producers, four of whom are from the U.S., and four from overseas. The panel meets once a year to review ASMI's program and provide advice. One panel member noted ASMI is unique in that it has the entire supply chain at the advisory meetings, from the fishermen to the end-seller. 10:32:45 AM CHAIR HERRON asked whether advisory meetings present any surprises. 10:32:55 AM MR. RIUTTA said no, although he was surprised by the unanimous support for ASMI's independent, third-party certification of Alaska's fisheries. At the March 2010, meeting the board and the advisory panel reviewed new certifications by Global Trust Certification Ltd., and past certifications by the Marine Stewardship Council (MSC), and urged ASMI to pursue an alternative. He then furnished an organization chart for ASMI and noted that international programs are managed from the Juneau office and domestic programs are managed from the office in Seattle. A slide titled, "ASMI FY 2012 Governor's Budget," indicated there are three components to the budget; a voluntary industry assessment of $7,200,000, a state general fund match of $6,500,000, and an U.S. Department of Agriculture (USDA) Market Access Program (MAP) contribution of $5,000,000. He explained that the federal funds are competitive between industries and require a match from the state along with industry in-kind contributions. The MAP funds are used for overseas marketing and ASMI is required to report to the USDA Foreign Agriculture Service (FAS), which controls the program. 10:36:55 AM MR. RIUTTA, in response to Chair Herron, confirmed there has been an official invitation for the governor to attend the European Seafood Exposition in Brussels, Belgium. He then displayed a chart which indicated that in 2009, the fishing industry paid a total of $103 million in taxes, fees, and self- assessments. Turning to the subject of economic development, he advised that developing new markets, and increasing the value of existing markets, leads directly to economic development; for example, increased salmon prices give opportunities to fisheries that have not been economical before - such as pink and chum salmon - because of low demand. The institute also provides education to all who handle fish, from the fisherman to the waiter or fish monger. With proper handling the value of fish is increased, and ASMI even extends education on how to care for the product to air cargo operators. Another facet of economic development is further investment in the international food aid program that began with marketing canned salmon, and now may extend to herring. 10:41:09 AM REPRESENTATIVE FOSTER asked what kind economic development effort is being made in Western Alaska. 10:41:34 AM MR. RIUTTA reiterated that ASMI is restricted to marketing the state in general; however, it does put an emphasis on regions as much as possible to help with marketing opportunities. In further response, he confirmed that one board member is from the lower Yukon area. 10:42:41 AM MR. RIUTTA continued with his presentation and stressed that seafood is a renewable resource that keeps on giving, as long as the fisheries are properly managed. Alaska is a global player in seafood; in fact, if Alaska were a country, it would be in the top 10 of seafood producing nations. Alaska produces 50-60 percent of national seafood production, and 2 percent of worldwide seafood production. Additionally, the industry employs over 50,000 people in the commercial fishing and seafood processing sector. Indirectly, the seafood industry also benefits the shipping industry and keeps shipping prices lower to Alaskans. In many coastal communities, seafood is the only industry, reduces the cost of utilities, and provides critical infrastructure and jobs. 10:45:48 AM REPRESENTATIVE GARDNER asked what percentage of the 50,000 seafood industry employees are Alaskans. 10:46:15 AM MR. RIUTTA estimated about 50 percent; as a matter of fact, the latest figures show that 6,877 permit holders, 10,000 crewmembers, and 6,956 workers in the processing sector are Alaska residents. He then displayed a slide titled, "Value and Volume of Alaska Salmon." For background information, he recalled that in 2002 the Joint Legislative Salmon Industry Task Force was formed to explore ways to support the weakening salmon industry. From the task force came new incentives for the industry to change "product-form" and reinvest in processing plants, and a complete change to the structure of ASMI. As a result, although harvest levels fluctuate, ex-vessel numbers remain level, and are expected to increase, because the salmon industry was changed to a modern industry that provides new, value-added products. As an example, he pointed out that the pink salmon industry began a shift from about 70 percent canned and 20 percent frozen fillets in 1998, to about 60 percent canned and 40 percent frozen fillets in 2010. After the product-form shift to frozen, values went up; in fact, around 2008, the value of canned and frozen salmon began to climb from about 10 cents to 35 cents, and the value of Alaska's largest fishery remains high. He said, "There are other examples like this, but I thought I would give you this one just [to] ... show you the impact of what economic incentive and developing new product forms for the industry brings to the table." 10:50:29 AM MR. RIUTTA, in response to Chair Herron, indicated that the pink salmon market varies, but at this time a lot of canned pink salmon is going to the southeastern U.S., and fillets and salmon burgers are marketed by Costco Wholesale Corporation and Denney's Restaurants. He attributed this increasing market to the "COOK IT FROZEN" campaign begun in 2004 that educated chefs and restaurants to the fact that frozen fish is sometimes better than fresh fish that has been around awhile. This has been effective to counter marketing by the suppliers of farmed salmon, and has changed the perception of frozen seafood. In response to Representative Tuck, he affirmed that Target Brands, Inc. is selling wild Alaska seafood exclusively at all of its stores. 10:53:22 AM REPRESENTATIVE GARDNER asked for seafood's "number one" competitor. 10:53:32 AM MR. RIUTTA said the highest sales are for Angus beef, and seafood is second. Health publications encouraging the public to eat more seafood may allow seafood to overtake beef in "the number one spot." He noted that seafood is a success story: 76 percent of diners prefer to eat wild, naturally-caught seafood over farmed products; 82 percent of consumers say that seeing the Alaska Seafood logo would increase their likelihood to purchase. Major challenges to the Alaska seafood industry are: the global recession has hurt prices for cod and other species; Russian productions of salmon and pollock have increased; Norway is aggressively pursuing the U.S. market; confusion over eco- labels; pressure to reduce USDA Market Access Program. 10:55:34 AM CHAIR HERRON asked how Alaska should address the tariff that Norway is urging Congress to eliminate. 10:55:46 AM MR. RIUTTA expressed his belief that the tariff was levied to protect American farmed salmon producers. He will research the issue. 10:56:21 AM CHAIR HERRON then asked about ASMI's concerns about eco-labels. 10:56:49 AM MR. RIUTTA acknowledged that eco-labels have drawn attention to overfishing that occurs in parts of the world; however, those who assign the labels can become too powerful and gain control of the marketplace. This concern was broached by ASMI's advisory panel because a certain eco-label is not needed, but what is needed is proof that the fish are from a sustainable and managed fishery. 10:57:49 AM CHAIR HERRON expressed his understanding that the danger "is if you don't pay this fee to this eco-label organization, then they'll work against you." 10:58:21 AM MR. RIUTTA, in response to Representative Gardner, said Norwegian salmon for market is all farmed salmon. He turned to the subject of "Seafood Trends" and said people are beginning to eat more seafood, domestically and internationally, and consumers want to know its source. "Wild" and "natural" are great descriptors when they describe Alaska seafood, and he anticipated "a good opportunity to see our, the value of our seafood continue to rise ... particularly as the economies begin to recover." Mr. Riutta described ASMI's participation in the Boston Food and Wine Show, which is the largest in the country. In response to Chair Herron, he said the competition for Alaska seafood at the food show was "just about every other protein product on the market." In fact, the seafood industry competes, not just with farmed salmon, but with beef, pork, and chicken. International marketing by ASMI includes activities in Japan, Western Europe, Eastern Europe, China, and Brazil. 11:01:06 AM CHAIR HERRON asked for the visual image of Alaska that has the most impact. 11:01:13 AM MR. RIUTTA opined consumers are drawn to Alaska, because Alaska is seen as a beautiful and clean place producing wild and natural products. He said, "We tag that with our seafood, [and] it makes our seafood extra special." Mr. Riutta restated the importance of the European Seafood Exposition in Brussels and noted that $48 million in sales were garnered at the 2010 show and $500 million in sales will follow for the year after. In conclusion, he related that ASMI recognizes the value in marketing more than seafood, but all Alaska products, and it searches for ways to work with the Alaska Travel Industry Association (ATIA), Alaska Grown, and other Alaska producers, looking for opportunities to share marketing experiences and activities. For example, ASMI requires chefs participating in the Great American Seafood Cook-off to feature other Alaska- grown products, such as the Alaskan Brewing Company. He also mentioned co-hosting with ATIA an event in England, showing off Alaska travel, seafood, and other products. 11:04:44 AM REPRESENTATIVE GARDNER asked for a synopsis on how success is measured for each of ASMI's programs such as domestic retail, domestic foodservice, international, and technical. 11:05:26 AM MR. RIUTTA offered to provide written measures as required by regulation; however, he opined that the most important measure is the satisfaction of its members. He said, "Our industry has the ability to actually vote out their assessment any time they want ... we pass a market test every year. If they don't ... retain us, or decide to vote us out, then we fail miserably." 11:06:16 AM CHAIR HERRON asked ASMI to showcase value-added manufacturers in communities represented by committee members. 11:06:56 AM The committee took an at-ease from 11:06 a.m. to ll:08 a.m. 11:08:24 AM RON PECK, President and Chief Operating Officer, Alaska Travel Industry Association (ATIA), informed the committee he has been involved in the tourism industry for thirty-three years and has been the president of ATIA for eight and one-half years. He introduced the chair of the ATIA board of directors, Patti Mackey. 11:09:54 AM PATTI MACKEY, chair, board of directors, Alaska Travel Industry Association (ATIA) and Executive Director, Ketchikan Visitors Bureau, stated she would discuss the programs that are in place to market Alaska as a world-class visitor destination, as well as ATIA's concerns for the future of the industry. Over the last 15 years there have been cyclical changes in the industry as a result of economic factors caused by a variety of reasons. Additionally, the size of the tourism industry in Alaska has contracted. As the trade association administering the marketing program for Alaska tourism, ATIA wants to put tourism on a path that fosters recovery and growth. To do this ATIA urges the funding of a sustained marketing budget of a minimum of $20 million per year. Ms. Mackey provided a brief history of the organization from 1988 to 2004. Today ATIA operates under arrangements set forth by the Millennium Plan of 1999. The association is a non-profit trade association governed by a board of directors, funded by the legislature, and with oversight provided through the Department of Commerce, Community & Economic Development (DCCED). The Millennium Plan also directs that the tourism industry contribute to the support of ATIA and voluntary contributions are made by tourism businesses, destination marketing organizations, and major cruise lines in order to match the state's annual appropriations. 11:13:07 AM MS. MACKEY, in response to Chair Herron, explained that ATIA's change from a state-run tourism office to a qualified trade organization began with the intent to direct more funds to marketing. In further response, she opined the industry also wanted a private entity, non-profit organization directing the funds. Until 2004, local governments were collecting fees and occupancy taxes; in 2004, the vehicle rental tax (VRT) was imposed, followed by a variety of statewide fees, taxes, and regulations assessed to the cruise industry with the passage of Ballot Measure 2 in 2006. Ms. Mackey said voluntary dollars to match state tourism dollars were affected by increased statewide taxation of the industry. In 2008, the dollar-to-dollar match was reduced to a 30 percent match program with a FY 11 sunset provision that intended to give the travel industry time to develop a program to sustain marketing funds. Presently, the recession and other factors have led to an end of growth in the tourism economy. The cruise industry faltered in 2010, which led to the amendment of the Commercial Passenger Services Act and a reinvestment of $7 million to tourism-related revenue. Today, the visitor industry is forecast to contribute $116.8 million to state revenue in FY 12. Ms. Mackey said ATIA believes that tourism revenue can increase in the future with reinvestment in a tourism market program. 11:16:02 AM MR. PECK presented Alaska's FY 11 Tourism Marketing Plan. He informed the committee that the state marketing budget was $11.7 million for the past several years. The bulk of the additional $7 million for FY 11 is being spent on marketing to consumers in the U.S., although some will reach overseas and to the travel trade. In fact, $13 million will be directed to consumer marketing such as television, direct mail, magazine, and on-line advertising, and to public relations. Another $3.5 million will be spent on the travel trade, international marketing, in-state awareness, and fulfillment. Lastly, about $700,000 will be spent on marketing research to ensure advertising is effective. Mr. Peck advised the additional funding has allowed ATIA to strengthen its television presence. The television advertising budget has remained at about $1 million since FY 02, and the additional funds have allowed for the creation of five new television "spots" and expansion to additional cable channels. Constructing the new commercials began with research and testing, and he pointed out that Alaska companies filmed and developed the television spots. Research has proven that the new commercials and the frequency of their airing have had a positive impact on the marketplace. Mr. Peck noted that members have been provided with copies of three of the four commercials. 11:19:54 AM MR. PECK assured the committee that the new advertisements raise consumers' awareness of Alaska; in fact, consumers were asked what travel ads they remembered and prior to the release of the new ads, ranked Alaska number 10 amongst different destinations. In January, after the release of the ads, Alaska was rated number 6, before California, Orlando, Jamaica, and the Bahamas. Regarding the perception of Alaska, 79 percent of respondents had a positive opinion of Alaska's advertising. Mr. Peck concluded that ATIA is "communicating a message that is on target." He furnished a graph that indicated the new high- definition, quality commercials are raising the awareness and image of Alaska, and are inspiring future visits by travelers. Other consumer marketing by ATIA includes: vacation planners distributed to 550,000 potential visitors; TravelAlaska.com website; magazine advertising in over 34 publications; direct mail to 3,000,000 households; participation in consumer shows; public relations and media campaigns. Two more key projects made possible by the additional funding were coverage by The Early Show on CBS, and comprehensive exposure in a national magazine, Cooking with Paula Deen. He turned to the subject of overseas and travel trade marketing, and noted Alaska is represented by sales agents in the top three international destinations of the United Kingdom, Australia, and German- speaking Europe, in addition to the secondary markets of Taiwan and Korea. International tour operators are also a source of relationships, resources, and product offerings. Finally, ATIA conducts familiarization tours for international and domestic tour operators. Mr. Peck also spoke of the importance of the ASMI and ATIA partnership and listed their most recent collaborations: vacation planner advertising; Alaska Media Road Show; National Tour Association event; London event. 11:26:14 AM REPRESENTATIVE TUCK asked for the parameters of the advertising effectiveness study. 11:26:36 AM MR. PECK recalled the time parameters were October and January, and he offered to provide the number of participants in the on- line study. In further response to Representative Tuck, Mr. Peck said requests for proposal (RFP's) were issued to select the firm of Jerry Henry & Associates to conduct the studies. 11:27:32 AM REPRESENTATIVE FOSTER asked Mr. Peck to provide statistics on increases in visitations due to the reduction of the cruise ship tax. 11:28:35 AM MR. PECK advised that 1.7 million visitors made 2008 a record year. In 2009, there was a loss of independent travelers. The cruise industry announced its intention to reposition ships, but this did not affect the local tourism industry until the 2010 season. Thus, the reduction of about 100,000 visitors in 2009 was in independent, highway, and air travelers, and in the average amount of visitor expenditures. This past year, there was a reduction of cruise visitors by 140,000 - due to the redeployed ships - and a slight increase in independent travelers. 11:30:28 AM REPRESENTATIVE FOSTER surmised the numbers include cruise ship, air, and highway travelers. He recalled his support of the cruise ship tax reduction. 11:31:25 AM MR. PECK reported that at least one additional ship is returning in 2012, and ATIA projects an increase of 7,500 deployments for 2011. 11:31:58 AM REPRESENTATIVE THOMPSON asked whether the percentage of cruise visitors who also book land tours is down because of the economy. 11:32:38 AM MR. PECK said yes. A secondary reason for the decrease is that the number of gulf-crossing customers dropped dramatically which affected Southcentral and the Railbelt corridor. 11:33:09 AM REPRESENTATIVE GARDNER pointed out her constituents in the tourism industry are involved mostly with independent travelers. She asked how advertising efforts are focused on independent travelers, and said, "Do we have any way of knowing, for example with your TV ad campaign ... what percentage of them are impacted to travel independently or with a cruise ship, or we have a mix." 11:34:52 AM MR. PECK assured the committee that ATIA does everything it can with its commercials to "spread the word about all the variety of types of activities and experiences that you can have in Alaska." In further response to Representative Gardner, he said a 2005-2006 study indicated the average independent traveler spends slightly more money in Alaska than does a cruise ship passenger. A new study on those figures is expected this year as the ATIA believes the previous study is not accurate. 11:36:35 AM REPRESENTATIVE GARDNER observed a cruise ship passenger's expenses for room and board are paid to a corporation outside of Alaska, whereas an independent traveler will pay those expenses to an Alaskan business owner. 11:37:14 AM MR. PECK advised the new study will research "what you'll spend in the state of Alaska." He clarified that the overall average expenditure is "somewhere in the vicinity of $935 as of that original study in 2005." 11:38:06 AM REPRESENTATIVE TUCK asked for further clarification. 11:38:28 AM MR. PECK said, "The research that we do specifically calls out 'exclusive of you traveling on a cruise or taking an airplane to get here, how much money did you spend when you were here?'" He added that for a cruise visitor, that would be how much was spent on a shore excursion, or if their stay was extended into Western Alaska. 11:39:16 AM REPRESENTATIVE TUCK asked for further information on what cruise lines reduced ships and visits. 11:39:31 AM MR. PECK offered to provide that information. In further response to Representative Tuck, he explained that independent and business visitors are identified by studying annual intercept surveys conducted by Department of Commerce, Community & Economic Development (DCCED). In response to Representative Munoz, Mr. Peck said that one in four of returning tourists, not on a cruise, first visited Alaska on a cruise ship. 11:40:53 AM REPRESENTATIVE THOMPSON asked Mr. Peck to compare the use of Alaska's advertising dollars with that of other states. 11:41:11 AM MR. PECK opined Alaska cannot promote travel to regional or "short-haul" traffic, as do Washington and Oregon, but the two states with "long-haul" destinations are Hawaii and Alaska. Hawaii gets seven million visitors per year and its annual marketing budget is over $80 million. For Alaska, ATIA believes $20 million is the right number. 11:42:29 AM MS. MACKEY added that ATIA believes that the $7 million increase in funds for marketing will result in 77,000 additional visitors in 2011, and will support the reinstatement of jobs in the tourism industry. The industry is encouraged by an expected 5 percent increase in Alaska tourism, which is greater than the prediction of 2.6 percent growth across the U.S. She reviewed the losses of past years and cautioned that if the industry is again required to abide by the original Millennium Plan match - essentially a dollar-to-dollar match - the gains made this year will be lost. She expressed her hope that the legislature will take into consideration the amount of state revenue, such as VRT and cruise ship fees that can be attributed to the travel industry, and will work with the industry to develop a way to sustain funding at an effective level. 11:46:56 AM CHAIR HERRON observed that committee members are interested in the marketing of Alaska. He asked for ATIA's plan to maintain the funding match with the state. 11:47:45 AM MS. MACKEY said: I believe very strongly ... that it's time to really think through the Millennium Plan today, based on the changes that we've seen that are affecting our industry, and the way that revenues are now being diverted that we were using for that match into actual state taxes and fees. MS. MACKEY then requested new or revised legislation to determine what the marketing program dollars will be each year. Failing that, she supported continuing the match at the 30 percent level. 11:49:12 AM CHAIR HERRON suggested this committee is a good place to "build" legislation regarding the funding of tourism marketing, and he challenged the industry to so. 11:50:20 AM MS. MACKEY agreed to work with the committee on legislation. 11:50:48 AM REPRESENTATIVE TUCK observed that tax credit incentives support businesses such as the film industry. He encouraged the committee to find ways to market tourism and the hospitality industry year around. 11:52:23 AM CHAIR HERRON thanked the presenters. 11:52:49 AM ADJOURNMENT  There being no further business before the committee, the House Special Committee on Economic Development, International Trade and Tourism meeting was adjourned at 11:52 a.m.