BILL ANALYSIS Ó
AB 398
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND
INTERNET MEDIA
Ian Charles Calderon, Chair
AB 398
(Campos) - As Amended April 20, 2015
SUBJECT: California Embassy.
SUMMARY: This bill would authorize the Governor's Office of
Business and Economic Development (GO-Biz) to accept submissions
of any tax exempt organization formed for the purpose of
establishing and maintaining a California Embassy in the
District of Columbia, as specified.
Specifically, this bill:
1)Permits the Governor's Office of Business and Economic
Development (GO-Biz) within the Governor's Office to accept
submissions of any plan of any organization that is exempt
from federal income tax as specified and formed for the
purpose of establishing and maintaining a California Embassy
in the District of Columbia.
2)Requires the planned Embassy to be within one mile of the
United States Capitol building.
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3)Further requires that the plan shall contain the following
information:
a) How the organization intends to establish the California
Embassy.
b) How the organization intends to raise the funding
necessary to establish the California Embassy.
c) How the organization intends to maintain and operate the
California Embassy once it is established.
d) Any other relevant information the commission deems
necessary.
4)States that the commission may approve the plan of any
organization that it determines will establish, operate, and
maintain a California Embassy that meets all of the following
criteria:
a) Showcases California's cultural diversity.
b) Showcases California's higher education opportunities.
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c) Showcases California's recreational and tourism
opportunities.
d) Provides resources to Californians in the District of
Columbia.
e) Provides a place of refuge for Californians in the
District of Columbia.
5)Requires the organization whose plan is approved to submit a
report to the commission every two years, as specified.
6)Makes various findings and declarations.
EXISTING LAW:
1) Establishes the Governor's Office of Business and Economic
Development (GO-Biz) within the Governor's Office for the
purpose of serving as the lead state entity for economic
strategy and marketing of California on issues relating to
business development, private sector investment and economic
growth.
2) Establishes the California Tourism Marketing Act (The Act).
3) Makes various findings and declarations regarding the
importance of California's tourism industry, need for
marketing of the industry and importance in funding the
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marketing of the industry, including an industry-approved
assessment to provide private-sector financing of marketing
necessary to increase tourism, as provided.
4) Requires the Office of Tourism within GO-Biz to establish a
non-profit Commission consisting of 37 members, including
representatives of the tourism industry and travel agencies
or tour operators, whose mission is to increase the number of
persons traveling to and within California. Provides that the
Commission be administered by an executive director who shall
be a tourism industry marketing professional, recommended by
a vote of the commissioners and approved by the Governor.
5) Requires the Commission to annually provide to all assessed
businesses a report on the activities and budget of the
Commission. Provides that the Commission's annual budget is
subject to the review and approval of the Director of GO-Biz,
but specifies that any decision of the Director related to
the budget may be overridden by a vote of three-fifths or
more of the commissioners then in office. Requires the
Commission to maintain a report, updated when assessments are
amended and to be made available to any assessed business, on
the percentage assessment allocation between industry
categories and industry segments including the reasons and
methodology used for the allocations.
6) Requires the Commission to annually prepare a written
marketing plan and specifies that any expenditure by the
commission shall be consistent with the marketing plan.
Requires the marketing plan to promote travel to and within
California and to include, but not be limited to, an
evaluation of the previous year's budget and activities; a
review of California tourism trends, conditions, and
opportunities; target audiences for tourism marketing
expenditures; marketing strategies, objectives, and targets;
and a budget for the current year.
FISCAL EFFECT: Unknown
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COMMENTS:
1)Author's statement. The author states the following in
support of this measure, "In my new role as Assistant
Democratic Leader - External Relations, I am tasked with
looking to expand California's representation and
influence all over the nation. Our nation's capital,
Washington D.C., is the access point (and often only
stop) for decision-makers, diplomats, and business
leaders from all over the world. Having a strong entity,
or an "embassy", in the vicinity of the United States
Capitol that showcases California's economic and cultural
prominence and that serves to centralize efforts from
various California constituencies to advocate for
California's interests, would help to highlight the
critical role that California plays in both the nation
and the world. In addition, the California Embassy would
serve as a tourism home for all Californians and provide
them with any resources they may need to learn more about
our federal government's workings and its history, and
make the best of their visit to D.C.
She further notes that, "California is the 7th largest
economy in the world, with a gross domestic product of
over $2.20 trillion and with a population of 38.8 million
people. At the same time, California receives 68 cents to
every dollar it contributes to the Federal budget. This
shows that although California plays a critical role in
the United States, it is a donor state. As Californians,
we should be more proactive in advocating for our state's
well-being and growth at the national level."
2)Model: Florida House, a privately funded and operated
"Embassy." According to the author, Florida House in
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Washington DC is the model for this legislation. Florida is
the only state with an embassy in Washington, D.C. The Website
for Florida House provides the following information, "Founded
by former First Lady Rhea Chiles in 1973, thousands of
visiting dignitaries, students and those having business in
Washington have been welcomed to the nation's capital with a
cold glass of Florida orange juice. The beautiful three story
Victorian home, built in 1891, was purchased and is maintained
solely by individual and corporate contributions. No state or
federal tax dollars are used to support Florida House.
"The Florida House Foundation is a nonprofit 501 (c) (3),
nonpartisan organization that provides cultural, social,
educational and economic resources; showcases Florida's
culture and diversity; maintains and operates Florida House;
and provides opportunities for Floridians to enrich their
appreciation and knowledge of our nation's government. Its
goals are to provide educational opportunities for Floridians
of all ages; To be the unparalleled leader in hospitality and
graciousness; To be of service to all Floridians; To be an
integral part of the Florida/Washington, DC community and our
Florida Congressional Delegation; To be a recognizable, sound
and thriving institution providing an endowment to ensure the
existence of Florida House for generations to come."
( http://floridaembassy.com/ , accessed April 3, 2015).
3)California presence in Washington D.C. California currently
has the largest Congressional Delegation of any state, with 53
elected representatives in the House and two Senators. Each of
these members has an office open to the public, located in the
Capitol and adjacent office buildings. In addition, the
California Governor maintains an office in Washington, DC,
which is technically open to the public. The Governor's office
is located at 444 North Capitol Street, and post 9-11,
visitors must pass through security to enter. Representatives
shared with the committee that while the offices are public,
they typically do not provide constituent services. Another
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association of Californians in Washington is "The California
Society," a private group of Californians doing business or
government employees living in Washington who gather monthly
for round table discussions of interest to California, and
provide a networking forum for visiting dignitaries.
4)Background: The California Tourism Marketing Act and Visit
California. The Act grew out of efforts to reverse a
multi-year decline in California's tourism industry. During
the 1970s, Governor Brown closed the Office of Tourism and
withdrew funding from many tourism promotion efforts. During
Governor Deukmejian's tenure, the Office of Tourism was
reactivated. In February 1993, Governor Wilson created the
Governor's Task Force on Tourism Funding (Executive Order
W-41-93) for the purpose of "investigating various tourism
funding methods and making policy recommendations regarding a
new, "non-tax" method of providing stable financing for
statewide tourism promotion." The Task Force, which was
composed of representatives from various California
businesses, developed the concept that was ultimately enacted
by SB 256 (Johnston) Chapter 871, Statutes of 1995, as the
California Tourism and Marketing Act.
The Act authorized the establishment of a non-profit, public
benefit corporation, Visit California, to oversee the
promotion of California as a premier travel destination. The
statute became operative upon industry wide approval in 1997
and the assessment program was initiated in 1998. In 2001, the
program was renewed by industry referendum with an 84% margin,
while in 2007 it was renewed by a 91% margin. The first full
year of assessment funding occurred during the 1998-99 fiscal
year and between 1998 and 2002, the marketing budget was fully
funded by the Commission and the state at approximately $14
million annually.
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Visit California is comprised of 37 Commission members,
representing each industry segment (Accommodations,
Restaurants and Retail, Attractions and Recreation,
Transportation and Travel Services, and Passenger Car Rental).
The Commission meets three times a year and directs and
approves the marketing plan, expenditures and the overall
strategic course for California tourism. The assessment
program is administered by the Office of Tourism, Tourism
Assessment Program which is housed in GO-Biz.
5)Opposition of California tourism industry to prior version.
Opposition to the Embassy proposed under AB 398 comes from the
California tourist industry, which comprises a large aspect of
the Visit CA membership, based on their concerns about
redirecting scarce resources to activities beyond the scope of
Visit CA. They write the committee to share, "As a non-profit
association, CalTravel unifies our state's many travel-related
businesses by bringing the travel and tourism industry
together to deliver an exceptional California experience. The
travel and tourism sectors generate more than $117 billion for
the state economy, employ over 1,000,000 Californians and
bring in approximately $4.3 billion in local taxes and $5.2
billion in state taxes."
"Unfortunately, the CA Travel Association opposes any
deviation of Visit California's core purpose which is the
promotion of California as a tourist destination. While we
appreciate your intent, the industry is troubled by any
request to spend limited time and resources on a mission
outside of its intended scope." CalTravel also is concerned
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about the impact of redirecting resources to oversight of a
private non-profit Embassy on their effort to stave off
competition for tourists and travel dollars, pointing out
that, "The industry has increased its voluntary investment for
the Commission's marketing program to keep up with other
states and countries and on behalf of the industry, and want
to be sure those dollars are being used for their original
intent."
6)Author's recent amendments address travel industry opposition.
In response to concerns raised by the travel and tourism
industry discussed in Comment 5 above, the author has amended
her bill to substitute the Governor's Office of Business and
Economic Development (GO-Biz) within the Governor's Office,
and delete Visit CA, as the state agency responsible for the
requirements of creating and maintaining the Embassy created
under the legislation. The author reports that her staff is in
negotiation with GO-Biz.
7)Committee comment: If the California Embassy is intended as a
private non-profit enterprise, why does state agency need to
approve and oversee their activities? Given that the model for
the proposed California Embassy is a privately funded
non-profit which has never been financially supported by its
home state, and the requirement in the bill that any
organization which may be considered for approval must already
be a non-profit corporation "formed for the purpose of
establishing and maintaining a California Embassy in the
District of Colombia?," the committee may wish to consider the
need for the state to provide oversight in creating and
overseeing the proposed private non-profit foundation.
8)Double-referral: Should this bill pass out of this committee,
it will be re-referred to the Assembly Committee on Judiciary.
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REGISTERED SUPPORT / OPPOSITION:
Support
There is no support on file.
Opposition
(Prior version)
California Hotel and Lodging Association
California Association of Banquet & Breakfast Inns
California Travel Association (CalTravel)
Analysis Prepared by:Dana Mitchell / A.,E.,S.,T., & I.M. / (916)
319-3450
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