BILL ANALYSIS
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|Hearing Date:June 12, 2006 |Bill No:AB |
| |2592 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC
DEVELOPMENT
Senator Liz Figueroa, Chair
Bill No: AB 2592Author:Leno
As Amended:June 8, 2006 Fiscal: No
SUBJECT: California Travel and Tourism Commission.
SUMMARY: Modifies the conditions and terms of appointees
and elected members of the California Travel and Tourism
Commission (CTTC), broadens industry segments which may
voluntary participate, and clarifies certain assessment and
referendum procedures.
Existing law:
1)Establishes the California Tourism Marketing Act of 1995
(Act) which provides for the California Travel and
Tourism Commission (CTTC), an independent, nonprofit
corporation consisting of 37 members. (The Commission
consists of the 12 members appointed by the Governor, and
24 commissioners elected according to tourism industry
category in a referendum, and the Secretary of the
Business, Transportation and Housing Agency who serves as
the chairperson and secretary of the CTTC).
2)Requires that the 12 appointed commissioners be
professionally active in the tourism industry and
represent the 12 officially designated tourism regions.
3)Provides that the 24 elected commissioners be elected
according to industry categories including:
accommodations, restaurants and retail, attractions and
recreation, transportation and travel services.
4)Provides that all commissioners will serve four-year
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terms and that, with exception of the Secretary, no
commissioner shall serve for more than two consecutive
terms.
5)Authorizes the CTTC to levy assessments on specified
businesses which benefit from travel and tourism spending
according to referendum of the "assessed businesses" for
the purpose of producing a variety of marketing
activities.
6)Allows for persons or businesses with less than
$1,000,000 in California gross annual revenue to be
exempt from assessment.
7)Allows the CTTC to accept, by written contract, a
voluntary assessment from any person in a travel and
tourism related business who is not an assessed business.
8)Requires the contract to provide that the voluntary
assessment will be equivalent to the assessment that
would be levied if the person were an assessed business.
9)Provides that businesses who enter into a contract for
voluntary assessment are also allowed to vote on
referendums.
10)Prohibits the CTTC from entering into any contract for
voluntary assessment with a person whose primary business
is gaming, as defined in Chapter 10 of Title 9, Part 1 of
the Penal Code.
11)Provides that, commencing January 1, 2003, a referendum
shall be called every two years to determine candidates
for commissioners and assessment levels.
12)Provides that, commencing in 2007, a referendum shall be
called every six years to determine the termination or
continuation of the CTTC.
This bill:
1)Modifies the conditions of office for appointed CTTC
commissioners as follows:
a) Requires the primary business, trade or profession
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of appointed commissioners to be directly related to
the tourism industry.
b) Requires that each appointed commissioner represent
only one of the 12 designated tourism regions.
c) Provides that if an appointed commissioner ceases
to be professionally active in the tourism industry or
his or her primary business, trade or profession
ceases to be directly related to the tourism industry,
then he or she will automatically cease to be an
appointed commissioner after 90 days following the
date of the change, unless he or she is able to meet
the criteria within that timeframe.
2)Modifies the conditions of office for elected CTTC
commissioners as follows:
a) Provides that elected commissioners will serve for
fiscal year terms (July 1 through June 30).
b) Allows for those commissioners whose term would
have expired on December 31 to automatically be
extended until June 30 of the following year.
c) Provides that if an elected commissioner ceases to
be employed by or with an assessed business, in the
category and segment which he she was representing,
then he or she will automatically cease to be an
elected commissioner after 90 days following the date
of the change, unless he or she is able to meet the
criteria within that timeframe.
3)Clarifies that the phrase "two consecutive terms" shall
not include partial terms.
4)Eliminates the restriction on contracts for voluntary
assessments from the gaming industry.
5)Clarifies that voluntary assessments shall be
"proportionally" equivalent to the assessment levied from
an assessed business.
6)Provides procedures for persons sharing common ownership,
management, or control of more than one assessed business
to calculate, administer, and pay the assessment owed by
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each business.
7)Specifies that the threshold for small businesses to be
exempt from assessment ($1,000,000 in total California
gross annual revenue) may be lowered by referendum, but
is never to be set lower than $500,000.
8)Clarifies that any exempted business may enter into
contract for voluntary assessments.
9) Provides that if the CTTC delivers a resolution to the
Secretary, then the Secretary may call a referendum at
any time.
10)Requires the Secretary to identify, to the extent
reasonably feasible, those businesses that would become
newly assessed due to a change sought in a referendum,
and provide those businesses the opportunity to vote in
that referendum.
11)Makes other technical and clarifying changes.
FISCAL EFFECT: This bill is keyed "nonfiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose: According to the Author, this bill is necessary
to update and make clarifying changes to the Tourism
Marketing Act with respect to the CTTC. Currently the Act
fails to clearly state the parameters for serving as a
commissioner. This bill would establish or clarify such
parameters. The Act currently prohibits voluntary
assessments from persons in the gaming industry. There is
no existing justification for this prohibition and the
gaming industry has expressed interest in participating
in tourism funding; thus, this measure eliminates this
provision so that gaming interests may participate on a
voluntary basis.
2.Background: The California Tourism 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
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reactivated.
In February of 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) in 1996 as the
California Tourism and Marketing Act.
The California Tourism and Marketing Act established
the Office of Tourism in the State Technology, Trade and
Commerce Agency (TTCA) and authorized California's
tourism industry to conduct an industry-wide referendum
of California businesses that benefit from travel and
tourism spending. The referendum passed in October 1997,
and it established the CTTC and a statewide marketing
fund derived from mandatory assessments on travel and
tourism businesses. The CTTC was created to be a
"nonprofit" corporation consisting of 37-members, for the
purpose of conducting marketing and managing assessed
funds.
In January 2004, the programmatic responsibilities of
the CTTC were transferred to the State Business,
Transportation and Housing Agency (BT&H). The first full
year of assessment funding occurred during the Fiscal
Year 1998-1999 and between 1998 to 2002, the California
Tourism marketing budget was fully funded by the CTTC and
the State of California at approximately $14 million
annually. The state has contributed each year except for
FY 2003-2004 and FY 2004-2005.
3.Previous Legislation
SB 1983 (Rosenthal, Chapter 830, Statutes of 1994) required
the Office of Tourism to perform various functions and
activities for the purpose of establishing and enhancing
a statewide network of visitor information centers.
SB 256 (Johnston, Chapter 871, Statutes of 1995) enacts the
California Tourism Marketing Act of 1995 which would
establish the framework for an industry-wide referendum
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on self-assessment of the tourism industry to
competitively promote travel to and within California.
SB 1398 (Johnston, Chapter 795, Statutes of 1996) makes
technical and substantive changes in the California
Tourism Marketing Act. Makes the Deputy Secretary of the
California Trade and Commerce Agency's (TCA) Office of
Tourism, serve as executive director and secretary of the
California Tourism Commission.
SB 1900 (McPherson, Chapter 474, Statutes of 2002) makes
revisions to the California Tourism Marketing Act by
extending the term between referendums to every six
years, commencing January 1, 2007, providing that only
10 percent of assessed businesses are required to call for
a referendum to terminate the California Travel and
Tourism Commission (Commission), and allows the
Commission to be terminated at any time by a referendum
called by a weighted 10 percent of the assessed
businesses.
AB 1757 (Assembly Budget Committee, Chapter 229, Statutes
of 2003) eliminated all programs at the Technology, Trade
& Commerce Agency and transferred the programmatic
responsibilities of the Tourism Commission to the
Business, Transportation and Housing Agency (BTH).
SB 1390 (Speier) appropriates $1 million from the General
Fund to the California Travel and Tourism Commission
(CTTC) stayed in the Assembly without further action.
November 2004.
4.Arguments in Support. According to the bill's sponsor,
the California Hotel and Lodging Association (CHLA), this
bill represents a comprehensive effort on the part of
California's travel and tourism industry to remedy a
number of cumbersome provisions and gaps in the
California Tourism and Marketing Act. Although the Act
has been successful, a number of omissions, gaps, and
problematic provisions have been noted since the Act was
implemented.
SUPPORT AND OPPOSITION:
Support: California Hotel and Lodging Association (Sponsor)
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California Arts Advocates
Opposition: None on File as June 7, 2006.
Consultant: Adriane Wynn