Senate Democrats

S. 1023, the Travel Promotion Act of 2009


UPDATE

S.1023 , the Travel Promotion Act,  enjoys bipartisan support.  On September 9, 2009, the Senate passed S.1023 by an overwhelming vote of 79 to 19. [Roll Call Vote 272, 9/9/09]  On November 6, 2009, the House passed H.Res.896, which suspended House rules, and agreed by voice vote to a resolution allowing S.1023, the Travel Promotion Act, to be inserted into H.R.1299, the United States Capitol Police Administrative Technical Corrections Act of 2009, as an amendment.  The Senate had previously passed H.R.1299 by unanimous consent on October 29, 2009. 

On February 24, 2010, the Senate took up consideration of the House Message with respect to H.R.1299.  Senator Reid offered S.A. 3326, a substitute amendment to H.R.1299.  On the same day, Senator Reid filed a cloture motion on the motion to concur with the House amendment to the Senate amendment to H.R.1299.

Summary

On May 12, 2009, Senator Dorgan introduced S.1023, the Travel Promotion Act of 2009.  The bill would establish a non-profit corporation to better communicate U.S. entry policies to international travelers and promote leisure, business, and scholarly travel to the United States.  The legislation would also create an Office of Travel Promotion within the Department of Commerce to coordinate with the corporation.  The legislation was reported favorably out of the Senate Committee on Commerce, Science, and Transportation with a written report and placed on the Senate Legislative Calendar on June 5.   The Senate is expected to begin consideration of this legislation on June 16. 

Background

This section summarizes the Senate Commerce Committee’s written report.

Travel and tourism generates approximately $1.3 trillion in economic activity each year in the United States and supports 8.3 million direct travel-related jobs.  Unfortunately, since the attacks on September 11, 2001, overseas travel to the United States has decreased significantly.  While worldwide travel has increased, according to the U.S. Travel Association, the nation’s share of international tourism has declined 17 percent since 9/11, at a cost of more than 200,000 jobs.  The Department of Commerce estimates that since 9/11, the nation has lost $182 billion in visitor spending and $27 billion in lost tax receipts.  

And while it should be noted that until this year travel from Canada and Mexico has shown consistent increases, “overseas” travel has declined.  The nation welcomed 633,000 fewer overseas visitors in 2008 than in 2000.  The importance of overseas, not just “international,” travel cannot be overstated given that the average overseas visitor spends $4,500 per trip and the average Canadian or Mexican visitor spends $900 per trip.  Nevertheless, in the first quarter of 2009, even international travel decreased by 10 percent.  

Contributing to the decrease in travel to the U.S. was the understandably tightened security standards and resulting waiting periods at our borders, which had the unintended consequence of erecting barriers to travel.  Moreover, the economic downturn and the stigma associated with certain business travel threaten to further reduce tourism and travel in 2009, at a projected cost of 250,000 travel-related jobs.  If the United States had simply kept pace with the global travel trends, the nation would have had 58 million more overseas visitors between 2000 and 2008, which would have generated approximately 245,000 jobs in 2008 alone.  Given the economic importance of the travel and tourism industry, especially in these tough economic times, Congress is working to increase foreign travel for business, leisure, and education. 

Since the creation of the U.S. Travel Bureau in 1937, the federal government has promoted travel.  In 1961, the U.S. Travel Service (USTS) was created to increase travel by foreign nationals through advertising.  However, in the late 1970′s, Congress began scaling back federal funding for advertising until it was eventually eliminated in 1996 and along with it the USTS’s successor agency, the U.S. Travel and Tourism Administration (USTTA).  After a 12 percent drop in tourism receipts and a loss of 390,000 related jobs following 9/11, Congress restarted federal advertising in 2003 and created the U.S. Travel and Tourism Advisory Board (USTTAB).  This board is comprised of senior travel and tourism experts from around the nation who advise the Secretary of Commerce on how to increase foreign travel to the United States.

In 2006, the USTTAB released a report entitled, Restoring American’s Travel Brand: A National Strategy to Compete for International Visitors.  The report encouraged the United States to remove unnecessary barriers to entry for legitimate travelers, including months-long waiting periods due to inadequate staffing in the Non-immigrant Visa Program.  The report also encouraged the creation of a federal office to coordinate governmental and private sector efforts to enhance the nation’s standing in the global travel market, something commonly found in other nations. 

S.1023 would implement many of the USTTAB’s recommendations by creating a non-profit corporation led by federal, state, and travel industry representatives.  This Corporation would execute a nationally coordinated travel promotion program.  The corporation would initially be funded with $10 million from monies collected under the Electronic System for Travel Authorization (ESTA) system.  For Fiscal Year 2011, the Corporation would provide matching funds from non-federal sources equal to 50 percent of the amount received from the government.  After Fiscal Year 2011, the Corporation would provide matching funds from non-federal sources equal to 100 percent of the amount received from the government.  Matching federal funds would not exceed $100 million per year.  The legislation would also create an Office of Travel Promotion to work with the Department of State and the Department of Homeland Security to ensure that international visitors are informed of U.S. entry policies.

Major Provisions

S.1023 would create the “Corporation for Travel Promotion” (the Corporation), which would consist of 11 board members appointed by the Secretary of Commerce to represent state and local, federal, small business, hotel, restaurants, retail, airline, tourist attraction, intercity railroad, and travel distribution service interests.  The Corporation would be tasked with: 1) better communicating United States entry policies; 2) correcting misperceptions about entry policies; 3) promoting travel to America; 4) ensuring promotional efforts benefit all 50 states and the District of Columbia, including areas not traditionally visited by international travelers; and 5) focusing efforts towards countries and travelers who are most likely to travel to America.

S.1023 would establish the Travel Promotion Fund (“the Fund”) in the Treasury to hold federal matching funds for the Corporation.  Adhering to pay-as-you-go rules, for Fiscal Year 2010, the Corporation would be provided up to $10 million in start-up funds from the Electronic System for Travel Authorization (ESTA) with no matching requirement.  In Fiscal Year 2011, the federal government would provide 2:1 matching funds to the Corporation, which means the Corporation would have to provide matching funds from non-federal sources equal to 50 percent of the amount received from the government. 

Subsequently, the Corporation would provide 1:1 or 100 percent in matching funds from non-governmental sources.  The legislation would, however, cap the amount in federal matching funds at $100 million per year, although the value of the contributions could be carried forward for matching purposes in subsequent years.  Moreover, at least 20 percent of the non-governmental contributions would have to be in cash; the rest of the contributions can be in-kind, such as advertising time, space, or services calculated at fair market value. 

S.1023 would require the Department of Homeland Security to collect a $10 ESTA fee from foreign travelers for the Corporation.  Federal matching funds would be capped at $100 million per year, and the authorization to collect the fee would expire on September 30, 2014.

S.1023 would authorize the Corporation to impose an annual assessment on the U.S. travel industry, other than higher education, airlines, and small businesses, up to $20 million.  The subjects of the assessment, however, must agree to the assessment by referendum. 

S.1023 would also create an Office of Travel Promotion in the Department of Commerce to liaison with the Corporation and support its work.  The office would work with the Departments of State and Homeland Security to ensure that international visitors are informed of U.S. entry policies. 

S.1023 would amend the International Travel Act of 1961 to require that the Office of Travel and Tourism Industries 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 Commerce Department’s Survey of International Travelers, estimating international travel exports on a state-by-state basis, and evaluating the Corporation’s success. 

Legislative History

In the 110th Congress, Senator Dorgan introduced the Travel Promotion Act of 2007.  On May 12, 2009, Senator Dorgan re-introduced a similar version of the legislation as S.1023, the Travel Promotion Act of 2009.  This bipartisan legislation has 34 co-sponsors, including Majority Leader Reid, Senator Rockefeller, Chairman of the Senate Commerce Committee, and Senator Ensign.  The Senate Commerce Committee’s Subcommittee on Competitiveness, Innovation, and Export Promotion held a hearing on May 13 addressing the legislation and considering the economic and security issues related to promoting travel to the United States.  On May 20, the full committee favorably reported the legislation, as amended with technical corrections, with a written report.  On June 11, Majority Leader Reid filed cloture on the motion to proceed to S.1023.  Under a consent agreement, the Senate will vote on that cloture motion on June 16.

Expected Amendments

Amendments are expected to S.1023.  Updated information will be sent to the DPC e-mail lists.

CBO Estimate

The Congressional Budget Office (CBO) released a revised cost estimate on S.1023 on June 9, 2009 projecting that the legislation would increase revenues by $135 million over 2010-2019 period and reduce direct spending by $290 million for a combined budget deficit reduction of $425 million.  The full CBO estimate can be accessed S.1023.pdf" target="_blank">here.

Administration Position

As of this writing, the Obama Administration has not released a Statement of Administration Policy.

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