Legislature(2015 - 2016)BARNES 124

03/21/2016 03:15 PM House LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 314 Out of Committee
-- Public Testimony <Time Limit May Be Set> --
Scheduled but Not Heard
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
           HB 314-AK REG ECON ASSIST. PROGRAM; EXTEND                                                                       
3:21:25 PM                                                                                                                    
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE  BILL NO.  314, "An  Act  relating to  the Alaska  regional                                                               
economic assistance  program; extending  the termination  date of                                                               
the Alaska  regional economic  assistance program;  and providing                                                               
for an effective date."                                                                                                         
3:21:38 PM                                                                                                                    
REPRESENTATIVE  HUGHES,  speaking  as  the  sponsor  of  HB  314,                                                               
informed the committee  the bill extends the sunset  date for the                                                               
Alaska  regional economic  assistance  program  - which  supports                                                               
Alaska  Regional Development  Organizations (ARDORs)  - for  five                                                               
years to  2021, and also  subjects the reporting  requirements by                                                               
ARDORs to state  appropriations.  She explained  that this change                                                               
means that if  there are no state appropriations  to the program,                                                               
ARDORs are not required to  submit the reporting that is required                                                               
for state funding.   In addition, if the  Department of Commerce,                                                               
Community  & Economic  Development (DCCED)  receives no  funding,                                                               
DCCED  is  not  obligated  to submit  related  reporting  to  the                                                               
legislature.  Representative Hughes  said ARDORs are important to                                                               
regions  throughout the  state, and  their work  should continue.                                                               
In the  past, the state has  provided funding to this  program in                                                               
the amount of $700,000, which  has represented a portion of their                                                               
funding; in fact,  approximately 89 percent of  the total funding                                                               
to  ARDORs  came  from  other  sources.    Representative  Hughes                                                               
provided  examples  of  economic development  projects,  such  as                                                               
those facilitated  by the  Copper Valley  Development Association                                                               
and  the  Southwest Alaska  Municipal  Conference  (SWAMC).   She                                                               
advised  that  HB  314  will   allow  ARDORs  to  continue  their                                                               
important work.                                                                                                                 
3:24:55 PM                                                                                                                    
STUART  KRUEGER, Staff  to  Representative  Hughes, Alaska  State                                                               
Legislature,  paraphrased from  the following  sectional analysis                                                               
[original punctuation provided]:                                                                                                
     Section  1.  Lists  the duties  of  the  department  in                                                                    
     providing assistance  to new  and existing  ARDORs. New                                                                    
     language   added    to   make   duties    "subject   to                                                                    
     Section 2.  Provides the department with  the authority                                                                    
     to make  regional development grants to  ARDORs. Limits                                                                    
     the number of grants that  the department can make, and                                                                    
     allows  the  department  to set  procedures  for  grant                                                                    
     Section  3.  Sets  reporting  requirement  deadline  of                                                                    
     February 1 of  each year for the  department to compile                                                                    
     a  report  on  the   activities  of  ARDORs  that  have                                                                    
     received  funding in  the preceding  fiscal year.  Also                                                                    
     establishes requirement  for ARDORs that  have received                                                                    
     assistance or  funding in the preceding  fiscal year to                                                                    
     provide information to the department  to assist in the                                                                    
     compiling of the department's report.                                                                                      
     Section 4. Extends  the sunset date of  program to July                                                                    
     1, 2021                                                                                                                    
     Section 5. Retroactivity clause.                                                                                           
     Section 6. Effective date.                                                                                                 
REPRESENTATIVE COLVER surmised that  the audit requirement in the                                                               
previous law was removed.                                                                                                       
MR. KRUEGER advised the audit is ongoing.                                                                                       
REPRESENTATIVE  COLVER  questioned  why  the  legislature  should                                                               
extend  the sunset  date,  if the  program was  not  going to  be                                                               
3:27:43 PM                                                                                                                    
REPRESENTATIVE  HUGHES pointed  out the  extension is  lengthened                                                               
from every three years to five years.                                                                                           
REPRESENTATIVE  COLVER  said  he  was  not  suggesting  that  the                                                               
extension  be indefinite,  but "we've  got  other more  important                                                               
things to do  than renew a lot of stuff  every, every five, three                                                               
years  ...  especially if  there's,  we  don't have  any  funding                                                               
CHAIR OLSON opined the bill would not be extended again.                                                                        
REPRESENTATIVE  COLVER  asked  whether  ARDORs  are  anticipating                                                               
additional  state funding,  should  the  state revenue  situation                                                               
change, or are ARDORs ready to obtain their own funding.                                                                        
REPRESENTATIVE HUGHES  acknowledged that ARDORs would  seek state                                                               
funding; however, the  designation by the state  is necessary for                                                               
their work to continue and to access federal grants.                                                                            
3:30:20 PM                                                                                                                    
CHAIR OLSON opened public testimony on HB 314.                                                                                  
3:30:40 PM                                                                                                                    
KATHIE  WASSERMAN, Executive  Director,  Alaska Municipal  League                                                               
(AML), stated AML works closely with  ARDORs.  In contrast to the                                                               
activities of  AML, ARDORs  facilitate economic  development, and                                                               
AML has worked with Southeast  Conference and SWAMC especially to                                                               
further  their missions.   Ms.  Wasserman  observed that  members                                                               
support ARDORs  financially, and  in lieu  of state  funding, the                                                               
state must do all it can to allow them to fund themselves.                                                                      
CHAIR OLSON asked if the bill was an AML priority.                                                                              
MS. WASSERMAN said no.                                                                                                          
3:32:18 PM                                                                                                                    
ROBERT   VENABLES,   Energy   and   Transportation   Coordinator,                                                               
Southeast  Conference,   stated  that   the  ARDOR   program  has                                                               
demonstrated its  value over the  past 28 years while  serving as                                                               
the  state's   contribution  to  the  regional   initiatives  for                                                               
developing   Alaska's  economy.     In   1988,  the   legislature                                                               
recognized that a locally-driven  initiative, in partnership with                                                               
the  state, is  the most  effective way  to create  a strong  and                                                               
healthy economy, thus  the ARDOR program was created  to plan and                                                               
support  economic   development  at  the  regional   level.    He                                                               
questioned  how the  program can  survive without  fiscal support                                                               
from the  state; in fact, in  some regions, the program  will not                                                               
continue  and in  all regions  ARDORs will  be diminished.   Some                                                               
programs will  go on  and for  them to  succeed, ARDORs  need the                                                               
status and  structure of  the program in  order to  contract with                                                               
state and  federal governments to  perform needed tasks,  such as                                                               
regional energy  planning.   Mr. Venables  pointed out  even that                                                               
without cost,  HB 314 is  a vital  part of the  continued success                                                               
for the region.   Southeast Conference continues  to advocate for                                                               
the  Alaska  Marine  Highway  System, and  its  ARDOR  status  is                                                               
important  to its  ability  to contract  with  federal and  state                                                               
governments  in this  regard.   He provided  further examples  of                                                               
Southeast Conference  activities related to energy  education and                                                               
energy savings.   Mr. Venables  concluded that the  ARDOR program                                                               
is more vital  than ever, and ARDORs are  effective mechanisms to                                                               
support regional  stability and  economic growth  in communities.                                                               
He urged for the passage of HB 314.                                                                                             
3:35:35 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  directed   attention  to  fiscal  note                                                               
Identifier:         HB314-DCCED-DED-3-8-16,    which    indicated                                                               
expenditures of $774,100,  and asked whether the  fiscal note has                                                               
been zeroed out.                                                                                                                
MR.  VENABLES  understood that  each  ARDOR  would receive  about                                                               
$70,000 to  use to leverage other  funds from other sources.   In                                                               
further response to  Representative Josephson, he said  as far as                                                               
he is aware, this  is the first time the state  has not funded at                                                               
least some portion of the ARDOR program.                                                                                        
3:36:31 PM                                                                                                                    
RICK ROESKE, Executive Director, Kenai Peninsula Economic                                                                       
Development District (KPEDD) paraphrased from the following                                                                     
prepared statement [original punctuation provided]:                                                                             
     ARDORs are  unique to each  region of Alaska  that they                                                                    
     represent, which  is good since  they are  flexible and                                                                    
     adaptable to each  region.  Staff works  with a variety                                                                    
     of  issues to  each region  and no  one approach  works                                                                    
     best  for all  areas.   For over  25 years  ARDORs have                                                                    
     developed  programs  and  techniques  to  expedite  the                                                                    
     necessary  processes  needed  to encourage  and  foster                                                                    
     growth  in their  individual areas  of the  state.   We                                                                    
     work cooperatively as a  group, sharing information and                                                                    
     contacts to assist each other.                                                                                             
     ARDORs use  their State of  Alaska funding  to leverage                                                                    
     Federal  economic development  agency monies  and other                                                                    
     local  monies and  or grant  opportunities.   The  seed                                                                    
     money  from the  State  of Alaska  ARDOR often  exceeds                                                                    
     four  or five  time the  initial base  amount of  state                                                                    
     monies, and  the EDA  money is  an important  source of                                                                    
     federal  revenues for  the State  of Alaska,  extending                                                                    
     state dollars with federal match  dollars.  ARDORs work                                                                    
     with   private,   public   sector,  local   and   state                                                                    
     government  to provide  many bridge  services.   ARDORs                                                                    
     act  as an  additional  resource for  people that  need                                                                    
     information but are not always sure where to get it.                                                                       
     KPEDD has  pivoted with new initiatives  to support the                                                                    
     Kenai Peninsula  with projects  like the  Situation and                                                                    
     Prospects  report  produced  in  2015.     This  was  a                                                                    
     borough  project  that  was dropped  in  2009.    KPEDD                                                                    
     restored five years of data,  interpreting the nine key                                                                    
     areas  that  presented   SWOT,  strengths,  weaknesses,                                                                    
     opportunities and threats.   The PDF of  this report is                                                                    
     available at our website in KPEDD.ORG.                                                                                     
     BR&E  business retention  and  expansion  is a  program                                                                    
     that  KPEDD  is  using  with   DCCED  to  connect  with                                                                    
     individual  businesses   to  identify   impediments  to                                                                    
     business  with the  goal  of  retaining and  increasing                                                                    
     employment.   Adding one additional  employee increases                                                                    
     payroll  and   circulation  of  monies  in   the  local                                                                    
     economies and  has been  used very  effectively outside                                                                    
     for two decades.  KPEDD  has used its onsite interviews                                                                    
     to identify  nearly six months  ago rapid  reduction in                                                                    
     private oil  and gas work  force in the Cook  Inlet. We                                                                    
     communicated this  to local policy makers  in an effort                                                                    
     to show a slowing local economy.                                                                                           
     I have  worked with two nonprofits  that were developed                                                                    
     and housed  in the business incubation  center in 2007-                                                                    
     2008  and  2009  so  I  know  the  supports  needed  by                                                                    
     businesses in  the initial phase are  sustained locally                                                                    
     and receive  support needed from KPEDD  staff.  Several                                                                    
     private  industry businesses  that still  exist in  the                                                                    
     central Kenai  Peninsula staff employees that  are very                                                                    
     successful due  to their start  with KPEDD and  its BIC                                                                    
     system.   Two  past  Executive  Directors have  written                                                                    
     initial   grant  applications   that  have   been  very                                                                    
     effective   models  in   their   respective  areas   of                                                                    
     expertise,  providing  dental   and  medical  care  and                                                                    
     overseeing  the  preservation  of the  Cook  Inlet  for                                                                    
     transit of gas and oil shipping.                                                                                           
3:40:24 PM                                                                                                                    
JASON  HOKE,   Executive  Director,  Copper   Valley  Development                                                               
Association  (CVDA),  stated  that  ARDORs  provide  information,                                                               
knowledge, and  a network  for each  region in  the state,  in an                                                               
effective  and efficient  manner.   For example,  for the  Alaska                                                               
Energy Authority,  Department of  Commerce, Community  & Economic                                                               
Development,  CVDA  received  $189,000  for  an  energy  planning                                                               
project, which was more cost-effective  than "through the state."                                                               
Mr.  Hoke said  CVDA helps  businesses get  going in  an area  of                                                               
approximately  23,000  square  miles  and with  a  population  of                                                               
2,500.    Since CVDA  does  not  receive municipal,  borough,  or                                                               
tribal  monies,  it  relies  on  independence.    Mr.  Hoke  said                                                               
reauthorization for  five years may bring  new opportunities, and                                                               
he urged for  the committee to continue the  ARDOR program, which                                                               
provides a statewide  network that addresses many  issues, and is                                                               
worth the investment.                                                                                                           
3:43:27 PM                                                                                                                    
DOUG  GRIFFIN,  Executive  Director, Southwest  Alaska  Municipal                                                               
Conference  (SWAMC), said  SWAMC  is a  distinctive  ARDOR as  it                                                               
represents  a  region  composed  of  three  Native  corporations,                                                               
Kodiak,  the  Aleutian Islands,  and  the  Bristol Bay  area.  He                                                               
provided  a brief  history of  SWAMC,  and noted  that this  year                                                               
SWAMC was  designated by the  federal government as a  partner in                                                               
the  Manufacturing  Extension  Partnership  program  through  the                                                               
National Institute  of Standards and Technology,  U.S. Department                                                               
of Commerce.   This arrangement  will provide up to  $500,000 per                                                               
year  for  five years  to  focus  on manufacturing  in  Southwest                                                               
Alaska and throughout the state.                                                                                                
3:45:51 PM                                                                                                                    
JON  BITTNER,  Vice  President,  Anchorage  Economic  Development                                                               
Corporation  (AEDC),  informed  the   committee  that  the  ARDOR                                                               
designation  is important  to  AEDC  as it  allows  AEDC to  more                                                               
easily partner with foreign companies,  to access certain federal                                                               
programs,  and to  partner with  the  state.   He encouraged  the                                                               
committee to move the bill.                                                                                                     
REPRESENTATIVE  KITO  asked  whether  the ability  of  ARDORs  to                                                               
obtain federal  or other grants  is jeopardized  without $770,000                                                               
in state support proposed by the governor.                                                                                      
3:47:50 PM                                                                                                                    
BRITTENY   CIONI-HAYWOOD,   Director,    Division   of   Economic                                                               
Development,  Department   of  Commerce,  Community   &  Economic                                                               
Development, advised  that losing state support  would have "some                                                               
impacts  to that."   Typically,  ARDORs use  state funds  to meet                                                               
match   requirements   for    the   U.S.   Economic   Development                                                               
Administration  (EDA), U.  S Department  of  Commerce, funds  and                                                               
other federal  grants.  She  agreed with previous  testimony that                                                               
the state ARDOR designation carries  weight with foreign entities                                                               
and  other  governmental  agencies.    Levels  of  other  federal                                                               
funding is normally a three-to-one match.                                                                                       
REPRESENTATIVE KITO  asked for a  general idea of what  ARDORs do                                                               
to provide economic support for communities.                                                                                    
MS.  CIONI-HAYWOOD advised  that  the 2015  ARDOR annual  reports                                                               
that are posted on the  division's web site may describe projects                                                               
that would be  cut.  [2015 ARDOR annual reports  were provided in                                                               
the committee packet.]  Ms.  Cioni-Haywood was unsure as to which                                                               
programs  would be  cut, because  it depends  on what  ARDORs can                                                               
raise in other  funding; however, rural ARDORs will  have more of                                                               
a challenge raising matching funds.                                                                                             
CHAIR  OLSON surmised  that  smaller ARDORs  may  have access  to                                                               
certain funds.                                                                                                                  
REPRESENTATIVE LEDOUX questioned why  the renewal is necessary if                                                               
ARDORs are not receiving state funds.                                                                                           
MS. CIONI-HAYWOOD advised that ARDORs  have created a network and                                                               
if funding  again becomes available,  keeping the  program intact                                                               
would facilitate reinstating the program.   She restated that the                                                               
designation  carries weight  with federal  agencies such  as EDA,                                                               
the U.S.  Small Business Administration,  the U.S.  Department of                                                               
Agriculture, and with  foreign entities.  The  division also uses                                                               
the  ARDOR network  as a  line of  communication between  regions                                                               
related to education and collecting data.                                                                                       
3:52:08 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON expressed  his  belief  that the  state                                                               
should always leverage money when  possible.  He asked Ms. Cioni-                                                               
Haywood  about other  sources of  money  regarding her  statement                                                               
that "smaller  more rural ARDORs  may have a harder  time raising                                                               
MS. CIONI-HAYWOOD opined that  the Anchorage Economic Development                                                               
Corporation (AEDC) will feel a  cut in state support, but because                                                               
it  is in  Anchorage  it  has support  from  the private  sector;                                                               
however,  for  the  director of  the  Copper  Valley  Development                                                               
Association  (CVDA), maintaining  and  finding  other sources  of                                                               
funding to  replace $70,000 would  be harder.   She said  she was                                                               
unsure about  the availability of funding  from rural development                                                               
CHAIR  OLSON suggested  the Rasmuson  Foundation  and others  are                                                               
primarily rural-oriented.                                                                                                       
REPRESENTATIVE  HUGHES,  in  further response  to  Representative                                                               
LeDoux,  pointed  out that  ARDORs  could  continue to  exist  as                                                               
nonprofit organizations,  but the state recognition  is important                                                               
because they  are designated as  a regional  economic development                                                               
REPRESENTATIVE  LEDOUX directed  attention  to page  2, line  28,                                                               
which read:                                                                                                                     
      ... an economic development district under 42 U.S.C.                                                                      
     3171 qualifies for grants under this ...                                                                                   
REPRESENTATIVE  LEDOUX   observed  that  the   organizations  are                                                               
designated by the aforementioned federal code.                                                                                  
3:56:20 PM                                                                                                                    
REPRESENTATIVE  HUGHES expressed  her understanding  is "part  of                                                               
that is, is working in conjunction with the state designation."                                                                 
3:56:39 PM                                                                                                                    
REPRESENTATIVE LEDOUX remarked:                                                                                                 
     So  ARDORs   need  to  be  reauthorized   in  order  to                                                                    
     designate them?   I  mean it would  just seem  like you                                                                    
     could  designate them  without reauthorizing  a program                                                                    
     that you're not going to give any money to.                                                                                
REPRESENTATIVE KITO said:                                                                                                       
     I think  the state  designation provides  that official                                                                    
     channel for the federal  government, and that there are                                                                    
     periods of  time when  an ARDOR may  cease to  exist or                                                                    
     operate, and  then another organization could  step up.                                                                    
     And the reauthorization period  allows for those things                                                                    
     to  be considered  in,  in the  state  program so  that                                                                    
     those organizations would then  be eligible for federal                                                                    
CHAIR   OLSON   added   that   many   nonprofit   and   municipal                                                               
organizations  are  hoping  that   more  state  funding  will  be                                                               
available within five years.                                                                                                    
REPRESENTATIVE HUGHES observed that there  is not an ARDOR in her                                                               
region  at this  time; moreover,  the division  has informed  her                                                               
that  even  if funding  is  not  available, an  organization  can                                                               
receive the designation.                                                                                                        
3:58:33 PM                                                                                                                    
CHAIR OLSON,  after ascertaining  that no  one further  wished to                                                               
testify, closed public testimony.                                                                                               
REPRESENTATIVE  COLVER said  he was  supportive of  the bill  and                                                               
would  like to  see  the  extension for  ten  years  in order  to                                                               
provide a shell of government  authority and support; in fact, an                                                               
extension of  the sunset  date would  help ARDORs  with long-term                                                               
3:59:54 PM                                                                                                                    
CHAIR OLSON  opined ten years  would mean  a loss of  support for                                                               
the  bill,  and  stressed  the  need to  keep  zero  fiscal  note                                                               
[Identifier:  HB314-DCCED-DED-3-8-16] attached to the bill.                                                                     
4:00:56 PM                                                                                                                    
REPRESENTATIVE  HUGHES  moved  to  report  HB  314,  Version  29-                                                               
LS1381\N, out  of committee  with individual  recommendations and                                                               
the accompanying  fiscal notes.   There  being no  opposition, HB
314  was reported  from  the House  Labor  and Commerce  Standing                                                               

Document Name Date/Time Subjects
HB289 ver A.PDF HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Sponsor Statement.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Sectional Analysis.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Blake Quackenbush 02-26-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Grace Halsey 02-23-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Brd of Barbers and Hairdressers 02-29-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Jeannine Jabaay 02-23-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Rachel Saldana 02-25-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Renee Scott 02-25-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Presentation from Brd of Barbers and Hairdressers.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Article Forbes 06-16-2014.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Article Forbes 10-11-2014.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB289 Supporting Documents-Letter Angela Stubbs 02-23-2016.pdf HL&C 3/21/2016 3:15:00 PM
HB 289
HB314 Supporting Documents-Letter-Rick Roeske-KPEDD 03-14-16.pdf HL&C 3/21/2016 3:15:00 PM
HB 314
HB314 Supporting Documents-ARDOR Five Year Retrospective.pdf HL&C 3/21/2016 3:15:00 PM
HB 314
HB337 Draft Proposed Blank CS ver H.pdf HL&C 3/21/2016 3:15:00 PM
HB 337
HB314 Sectional Analysis.pdf HL&C 3/21/2016 3:15:00 PM
HB 314
HB289 Fiscal Note-DCCED-CBPL-03-17-16.pdf HL&C 3/21/2016 3:15:00 PM
HB 289