Tour operators sue state over ship initiative

Businesses say provision in measure would reveal their wholesale costs

Posted: Monday, May 07, 2007

A group of Alaska tour operators have filed suit against the state of Alaska claiming a provision in the cruise ship initiative passed by voters last year violates their rights.

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"The disclosure provision creates unintended consequences for Alaska businesses and irreparably harms us," said Karen Hess, owner of Chilkat River Adventures in Haines in a prepared statement. She is one of the plaintiffs in the class action lawsuit filed Friday.

"As a small tourism business owner, I am being asked to do something no other business owner is required to do. To me, that's discrimination," Hess said.

The provision requires that a cruise ship company disclose the commission it receives - or the percentage of the total sale - when the cruise line promotes a tour. The section was designed in large part to grant access to passengers to the tour operators not associated with the cruise lines.

But some businesses say the disclosure would reveal their wholesale costs.

"We are hopeful a Legislative fix will remedy this problem and make litigation unnecessary," Hess said.

Lawmakers are now considering House Bill 217, which was heard on the House Floor on Saturday. The bill is scheduled for a third reading during the Floor session today.

Sponsored by Rep. Lindsey Holmes, D-Anchorage, the bill would not force commission to be disclosed unless it is more than 10 percent of the cost of the total sale. It also would require cruise lines to declare that other tours are available onshore and to provide contact information for visitors centers.

The tour operators who filed suit against the state are seeking a restraining order to prevent the disclosure provision from being enforced.

"By asking the court for a 'Temporary Restraining Order' now, it allows the Legislature to finish its business and to hopefully resolve this matter," said John Litten, owner of Sitka Tours.

Additional plaintiffs in the suit include Gary C. Danielson, president of White Pass and Yukon Route; Steve and Gayla Hites of Skagway Street Car; Tom Tougas of Independent Coach Tours and 4 Seasons Marine Services in Juneau; Shane and Janis Horton of Chilkoot Lake Tours in Haines; Ken Dole of PM Air in Ketchikan; John Dunlap of Allen Marine Tours in Sitka and Tory Korn of Cape Fox Tours in Ketchikan.

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