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Week Ending June 19, 2009

S.1023 A bill to establish a non-profit corporation to communicate United States entry policies and otherwise promote leisure, business, and scholarly travel to the United States.

The bill establishes the Corporation for Travel Promotion, a nonprofit organization that would not be a GSE (Government Sponsored Enterprise) such as Fannie Mae and Freddie Mac.

The mission of the Corporation is to provide information to those interested in traveling to the US, to counter misperceptions about entering the US and to generally promote leisure, business, and scholarly US travel.

The new corporation would be subject to the District of Columbia Nonprofit Corporation Act and would be governed by an 11-member board of directors, appointed by the Secretary of Commerce, and consisting of representatives from States, the Federal government, and the sectors of the travel industry. The individual members would have expertise in restaurants, hotels, entertainment, conventions, air travel, State tourism, visas, and intercity rail travel.

The bill reports that travel and tourism generates approximately $1.3 trillion yearly and is one of the largest employers with approximately 8.3 million jobs. The revenues (Food, lodging, recreation, gifts, entertainment, transportation, etcetera) from travel generated $142.1 billion in 2008, an amount up 16% from the previous year. The bill noted that visitors from Italy, France, Argentina, Netherlands and China make up the largest growth of travelers respectively. The US Travel Association reports that one percent increase in international travel produces a $3.9 billion in payroll receipts. But, in 2007, the US only attracted 6.3% of international travelers. Congress wants to invigorate the tourism industry and recapture the lost market. This bill aims to accomplish that.

To fund the enterprise the bill creates the Travel Promotion Fund in the US Treasury. The Secretary of the Treasury shall make available to the Corporation such sums as may be necessary, but not to exceed $10,000,000, from amounts deposited in the general fund of the Treasury from fees. The new Corporation is authorized to collect annual membership fees of up to $20 million from travel and tourism members who are on the Corporation’s board of directors. The Corporation would be required to raise non-Federal money and in-kind matching contributions at the rate of 50 percent in fiscal year 2011 and 100 percent in the subsequent years. The Secretary of Homeland Security is directed to establish a fee for the use of electronic data sharing concerning the admissibility of some aliens, and collect those fees.

The Office of travel and Tourism Industries is directed to expand its research and development to promote international travel into the US. Research activities will include expanding access to the official Mexican travel surveys data to provide the States with traveler characteristics and visitation estimates for targeted marketing programs; expanding the number of inbound air travelers sampled by the Commerce Department's Survey of International Travelers to reach a 1 percent sample size and revising the design and format of questionnaires to accommodate a new survey instrument, improve response rates to at least double the number of States and cities with reliable international visitor estimates and improve market coverage; developing estimates of international travel exports (expenditures) on a State-by-State basis to enable each State to compare its comparative position to national totals and other States; evaluate the success of the Corporation in achieving its objectives and carrying out the purposes of the Travel Promotion Act of 2009; and research to support the annual reports required…in the Act.

The bill includes the sense of Congress provision that the new Corporation should not engage in lobbying the federal government. The Corporation may not contribute to or otherwise support any political party or candidate for elective public office.

The Corporation shall submit an annual report for the preceding fiscal year to the Secretary of Commerce for transmittal to the Congress on or before the 15th day of May of each year.

Sponsor:  Senator Byron Dorgan (ND)

Vote: Agreed to in the Senate. Scheduled but not considered in the House.

Cost to the taxpayers: “In compliance with subsection (a)(3) of paragraph 11 of rule XXVI of the Standing Rules of the Senate, the Committee states that, in its opinion, it is necessary to dispense with the requirements of paragraphs (1) and (2) of that subsection in order to expedite the business of the Senate,” the bill reports to explain the absence of the CBO cost estimate. The bill authorizes such sums as may be necessary.

Earmark Certification:  

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MORE INFORMATION

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

The section cites the short title of the bill as the `Travel Promotion Act of 2009.'

Section 2. The Corporation for Travel Promotion

The section establishes the Corporation for Travel Promotion as a nonprofit corporation governed by an 11-member board of directors appointed by the Secretary of Commerce. The members shall represent State and local interests, the Federal government, the small business community, hotels, restaurants and retail businesses, air transportation, attraction businesses, the intercity passenger railroad business, and travel distribution services. The members of the board are required to have professional expertise in travel and international travel promotion and marketing, and to broadly represent all regions of the United States. No member of the board may be considered a Federal employee by virtue of his or her service on the board.

The board shall appoint an executive director and other officers who shall be responsible for hiring staff necessary to carry out the mission of the Corporation. No political test or qualification shall be used in personnel actions with respect to officers or employees of the Corporation. The Corporation may not contribute to or otherwise support any political party or candidate for elective public office. The Committee further intends that the Corporation not engage in activities to directly or indirectly influence legislation.

The Corporation must develop and implement a plan to: (1) provide information to travelers, tour operators, and other international travel stakeholders, including materials provided by the Federal government concerning entry requirements and other information that would allow travelers to better navigate the process of entering the United States; (2) counter and correct international misperceptions regarding United States travel policy; (3) maximize the economic and diplomatic benefits of travel to America through promotional activities; (4) ensure that the Corporation's promotional efforts benefit all 50 states and the District of Columbia, including areas not traditionally visited by international travelers; and (5) prioritize the use of Corporation resources towards countries and potential travelers that are most likely to travel to America. In order to carry out its mission, the Corporation is empowered to contract with public and private entities hire or accept voluntary services of consultants and experts, and such other actions as may be necessary. Promotional expenditures of over $25,000,000 must be authorized by a vote of at least 2/3 of the board at a meeting at which six of more members are present.

Meetings of the board must be open to the public with the limited exception that portions of a meeting may be closed for the period of time necessary to preserve the confidentiality of commercial or financial information or to discuss legal matters. An independent accounting firm must conduct an annual audit of its operations, and the Corporation must provide the Comptroller General and the Congress full and complete access to its books and records.

Section 3. Accountability measures

The section requires the Corporation's board to establish annual objectives for the Corporation subject to approval by the Secretary of Commerce and establish a marketing plan for each fiscal year. It also must submit an annual budget to the Secretary with an explanation of any expenditure in excess of $5 million, which shall be made available to the public. The Corporation must submit an annual report to the Secretary of Commerce for transmittal to Congress detailing its operations, activities, financial conditions, and accomplishments, as well as an objective and quantifiable measurement of the Corporation's progress on an objective-by-objective basis, and an explanation of the reason for any failure to achieve an objective established by the board.

Section 4. Matching public and private funding

The section establishes a fund in the Treasury known as the Travel Promotion Fund (Fund). For fiscal year 2010, the Corporation shall be provided up to $10 million from the ESTA to cover its initial expenses and activities under the Act. Subsequently, the Secretary of Treasury shall transfer not more than $100,000,000 in fees collected pursuant to section 5 of the Act to the Fund. Based on the amount of private industry contributions raised by the Corporation, the Secretary of the Treasury may distribute to the Corporation matching moneys from the Fund. At least 20 percent of the private-sector contributions must be in cash and remaining contributions may be in-kind contributions such as television advertising time, advertisement space or services calculated at the fair market value of such goods or services. The Corporation shall have the right to refuse any contribution that is not useful or inappropriate. For fiscal year 2011, the Corporation must provide matching funds from non-Federal sources equal to 50 percent of the amount received from the government. After fiscal year 2011, the Corporation must provide matching funds from non-Federal sources equal to 100 percent of the amount received from the government. Matching Federal funds will not exceed $100 million per year. To the extent that industry contributions entitle the Corporation to more matching money than is available in the Fund in a given year, the value of contributions may be carried forward for matching purposes in subsequent years.

Section 5. Travel Promotion Fund fees

The Secretary of the Department of Homeland Security shall establish and collect a fee from the ESTA, which will include a $10 fee for the matching funds for the Corporation. The authorization to collect the fee for the Travel Promotion Fund will expire on September 30, 2014.

Section 6. Assessment authority

The Corporation may impose an annual assessment on the United States travel industry, other than airlines and small businesses, of up to $20 million. Prior to initiating such an assessment, the members of the industry that would be assessed must agree to such an assessment by referendum. The Corporation shall establish a means of collecting the assessment and may bring suit in Federal court to compel compliance with an assessment. Pending disbursement of the funds assessed, the Corporation may invest the funds in any interest-bearing account.

Section 7. Office of Travel Promotion

The section establishes the Office of Travel Promotion in the DOC. The office would serve as liaison to Corporation, support and develop programs to increase the number of international visitors to the United States, support state, regional, and private sector initiatives to promote travel to and within the United States, and work with the Departments of State and Homeland Security to ensure that international visitors are processed efficiently. Within a year after the date of enactment, the Secretary shall transmit a report to Congress describing the office's work with the State Department and DHS to ensure that international visitors are processed efficiently.

Section 8. Research program

The section amends the International Travel Act of 1961 and requires that the Office of Travel and Tourism Industries to expand its research and development activities in support of promoting international travel to the United States, including expanding access to official Mexican travel surveys data, improving the DOC's Survey of International Travelers, developing estimates of international travel exports on a State-by-State basis, and evaluating the success of the Corporation in achieving the objective set forth in the Act.

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