HOUSE SPECIAL COMMITTEE ON INTERNATIONAL TRADE & TOURISM January 26, 1995 3:05 p.m. MEMBERS PRESENT Representative Beverly Masek, Chairman Representative Alan Austerman, Vice Chairman Representative Jeannette James Representative Pete Kott Representative Irene Nicholia Representative Brian Porter MEMBERS ABSENT Representative Caren Robinson COMMITTEE CALENDAR Organizational Meeting WITNESS REGISTER None ACTION NARRATIVE NO TAPE DUE TO A TECHNICAL PROBLEM The House Special Committee on International Trade and Tourism (ITT) was called to order by CHAIRMAN BEVERLY MASEK at 3:05 p.m. Members present at the call to order were Representatives Masek, Austerman, Kott, and Nicholia. Members absent were Representatives James, Porter, and Robinson. CHAIRMAN MASEK called the meeting to order and began to discuss the agenda. Her priority was to invite outside agencies to come before the committee and present their accomplishments to date, and their goals for the future. She then asked for any comments from members. Representative Jeannette James arrived at approximately 3:08 p.m. REPRESENTATIVE ALAN AUSTERMAN noted that he had nothing to bring forward at this time. He offered that the committee should work with the Community and Regional Affairs Committee and the Department of Commerce and Economic Development so as to ensure that duplication doesn't occur, and to ask them to bring forward any relevant information pertaining to the committee. Representative Brian Porter arrived at approximately 3:12 p.m. CHAIRMAN MASEK stated she would take Representative Alan Austerman's remarks into consideration. REPRESENTATIVE JEANNETTE JAMES offered that the committee should look closely at the budget and make recommendations to the Finance Committee. From her own experiences, back-up documentation is necessary to argue a case for funds for projects, especially when international trade is concerned. REPRESENTATIVE AUSTERMAN agreed with her. He commented that the Division of Tourism handles the foreign market whereas the Alaska Tourism Marketing Council handles the domestic market. He felt that the percentage of money being spent on the domestic market and the funding ratio on foreign tourism versus the budget should be looked into. If there are no increases, then where is the money going? CHAIRMAN MASEK acknowledged that was a good point. She mentioned scheduling times for various agencies, that will accommodate the members' schedules, for them to present overviews. She said the committee would meet to discuss these overviews and the possibilities they offer. She said she would like each member to bring their own personal, individual goals to the next meeting. She referenced the committee guidelines placed before each member and offered answers to any questions concerning them. She introduced her committee aide, David Stancliff. She expressed her desire to make the ITT Committee important to Alaska. REPRESENTATIVE BRIAN PORTER stated that as far as overlap is concerned this is the only committee dealing with tourism. CHAIRMAN MASEK mentioned working, in particular, with the House Special Committee on World Trade and Diplomacy as much as possible. REPRESENTATIVE PORTER noted that there is plenty of tourism work. REPRESENTATIVE AUSTERMAN concurred that tourism is the fastest growing industry and that they should study group taxation issues on that industry. There are seven to ten issues/taxes that are valid on tourism and need to be looked at. REPRESENTATIVE JEANNETTE JAMES asked if we renewed the Alaska Tourism Marketing Council (ATMC); is it one year or longer? REPRESENTATIVE PETE KOTT answered that is for two years; we have one more year currently left. REPRESENTATIVE JAMES asked if the Governor will fund it? REPRESENTATIVE PETE KOTT responded that the Governor has attended many sessions and is very clear on where he's going. The increase was no surprise from $4.5 million to $10 million. However, when it's reduced it's not in kind; it's incremental. REPRESENTATIVE AUSTERMAN expressed that the ATMC is a small group and not legislative. We need to determine its effectiveness. He said $10 million is not a lot of money. REPRESENTATIVE PORTER wanted to offer a few comments. He and Representative Kott, at a campaign forum, were both candidates supportive of tourism. They both had an interest in it and know people involved in tourism that can greatly impact the tourism arena. Alaska is one of the best potentials without a Disneyland. With the appropriate tax structure, they can share in the risks as well as the benefits. REPRESENTATIVE JAMES announced that she is the best critic and supporter of ATMC. She didn't like their advertising. They paid a price for depicting Alaska as only a pristine wilderness. There are people here as well. She got her message across. Tourism needs to pay taxes. It doesn't pay its own way. Of course, it never will. It can't pay for the energy, highway right of way, and accessibility. Unfortunately, of most of the taxes proposed, Alaska residents will pay as well. Tour groups will pull away if overtaxed but, we are a low participant state. We have to be careful of a statewide sales tax. Possibly a port tax, i.e., at the Canadian border? CHAIRMAN MASEK acknowledged that in traveling in Europe, at every intersection she had to pay tolls. REPRESENTATIVE JEANNETTE JAMES offered a never before suggested idea of a car rental tax. CHAIRMAN MASEK advised investigating the press release in Seattle in reference to the 10 million. REPRESENTATIVE PETE KOTT indicated that we've already been through the process of finding a tax. A tax on a particular aspect of the industry, like the car rental agencies, is not equitable and fair. Tourism, as a whole, will not be opposed to a tax as long as it's equitable. CHAIRMAN MASEK noted a concern with the major operators. They bring in a lot of money but, how much of it stays in the state? REPRESENTATIVE JAMES countered that although they do take away money, they also spend here in spin-off arenas like building accommodations. CHAIRMAN MASEK asked if anyone has anything further. REPRESENTATIVE PORTER suggested that if we could determine how Hawaii rips off non-constituents, we'd solve the budget problems. CHAIRMAN MASEK related how the sports fishing in Kenai and the Mat-Su Valley is increasing every year. A German-owned outfit on the Deshka river that runs excursion/vacation trips prepays all expenses but their fishing licenses in Germany. They then come to Alaska, buy only licenses, and then leave with the fish! Ideas to think about. REPRESENTATIVE JAMES acknowledged that it is a statewide problem. REPRESENTATIVE AUSTERMAN discussed a boroughwide permit system and a study of how well resources are impacted, nothing for fish. He mentioned introducing a bill requiring sport fishing guides to report every type of fish caught and the numbers into a databank for recording purposes. REPRESENTATIVE JAMES noted there is the same problem in Southeast. CHAIRMAN MASEK began closing by announcing she would set the next meeting, and set notice. She asked the members to gather ideas and said she would appreciate input. She further stated that she would prefer informal meetings for making visitors comfortable. REPRESENTATIVE PORTER thought scheduling for committee meetings should be scheduled around standing committee meetings. REPRESENTATIVE AUSTERMAN wanted to clarify that as noted in the committee guidelines they would indeed be following Robert's Rules of Order. REPRESENTATIVE BRIAN PORTER said that, although confusing, it's quite refreshing. REPRESENTATIVE AUSTERMAN felt thrown by the use of Robert's Rules. REPRESENTATIVE JAMES said the transition is easy. REPRESENTATIVE PORTER stated the only real difference is with reconsiderations. ADJOURNMENT CHAIRMAN MASEK adjourned the meeting at 3:35 p.m.