Legislature(2013 - 2014)BARNES 124

02/18/2013 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
         HB 71-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM                                                                      
3:49:16 PM                                                                                                                    
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE BILL NO. 71, "An Act  extending the termination date of the                                                               
Alaska regional  economic assistance  program; and  providing for                                                               
an effective date."                                                                                                             
3:49:31 PM                                                                                                                    
REPRESENTATIVE SHELLEY  HUGHES, Alaska State  Legislature, stated                                                               
HB 71  would extend the Alaska  Regional Development Organization                                                               
(ARDOR).  She explained this  bill would extend the ARDOR program                                                               
from 2013  - 2018.   She highlighted  that the ARDOR  program was                                                               
established in 1988,  and will celebrate its  silver jubilee this                                                               
year.   The  DCCED  has  been encouraged  to  formation of  these                                                               
organizations.    The  department  offers  grants  each  year  to                                                               
qualifying ARDOR organizations  that provide technical assistance                                                               
to  communities.     Currently,  12  ARDOR   organizations  exist                                                               
statewide,  at  a cost  of  approximately  $62,000 per  year  per                                                               
ARDOR.     The  ARDORs  require  one-third   in  matching  funds,                                                               
including 20 percent from local  sources, she stated.  The ARDORS                                                               
have been  successful in leveraging  state funding by a  three to                                                               
one ratio,  with some  ARDORS obtaining an  eight to  one funding                                                               
ratio.    Since inception  in  1988,  the  ARDORS have  not  been                                                               
audited.    Thus   she  is  currently  requesting   an  audit  be                                                               
performed,  which  will go  to  the  Legislative Budget  &  Audit                                                               
Committee for  consideration.   She offered  her belief  that the                                                               
ARDORs are  working well, but there  may be some ways  to improve                                                               
the organization's functions.   ARDORs were formed,  based on the                                                               
belief that  a locally driven  initiative, partnering  with state                                                               
and other  entities would be  the best combination to  figure out                                                               
good economic  development ideas.   Surely  this would  allow for                                                               
healthier  communities,   and  for  stronger   local  sustainable                                                               
economies,  she  also  said.    She related  an  audit  could  be                                                               
completed in about two years.                                                                                                   
3:52:43 PM                                                                                                                    
REPRESENTATIVE  SADDLER asked  for the  number of  staff for  the                                                               
REPRESENTATIVE  HUGHES answered  that the  ARDOR program  has one                                                               
coordinator  although  was  not certain  about  additional  staff                                                               
since each ARDOR is governed by its own board.                                                                                  
3:53:31 PM                                                                                                                    
REPRESENTATIVE HERRON  asked whether  it would be  appropriate to                                                               
change the  sunset date to two  years in the bill  since it would                                                               
take two years to conduct the audit.                                                                                            
REPRESENTATIVE HUGHES agreed.                                                                                                   
CHAIR  OLSON suggested  an audit  might take  three years  and he                                                               
offered to further discuss this with the LB&A committee.                                                                        
3:54:24 PM                                                                                                                    
SHELLY WRIGHT,  Executive Director, Southeast  Conference, Alaska                                                               
Regional   Development   Organization  (ARDOR),   Department   of                                                               
Commerce,  Community &  Economic  Development  (DCCED), said  the                                                               
Southeast  Conference is  the ARDOR  for Southeast  Alaska.   She                                                               
asked to  speak briefly  about the  advantages of  ARDORs, noting                                                               
each region  is different.   She emphasized  the value  of having                                                               
ARDORs is the  ability to partnership with the  state in planning                                                               
processes  and in  collaboration efforts.   She  highlighted that                                                               
the state helps  organize the ARDORs and assists  them in getting                                                               
together  periodically,  which  is  very  valuable  for  regional                                                               
development organizations  statewide.   She reported  the funding                                                               
for ARDORs is  unrestricted funding and most  funding is received                                                               
through the grant  process and is project-oriented  funding.  The                                                               
Southeast Conference  receives grants  and contracts  on specific                                                               
projects for  the program to  keep the administrative  costs low,                                                               
and  allow  the project  funding  to  be  spent on  the  specific                                                               
3:56:22 PM                                                                                                                    
MS.  WRIGHT  related  that  Southeast   Conference  has  been  in                                                               
existence since 1958.   She said she is privileged  to serve in a                                                               
seasoned  organization,  noting  the Southeast  Conference  is  a                                                               
membership  organization.     She  pointed  out   information  in                                                               
members' packet  that more fully  describes the  funding process,                                                               
how  the   money  is  leveraged,   and  lists  ARDOR's   top  ten                                                               
priorities.   She  characterized  the Southeast  Conference as  a                                                               
very  active   development  organization   that  works   with  23                                                               
incorporated and 21 unincorporated  communities.  The group meets                                                               
biannually to work  on annual and five-year plans.   She asked to                                                               
speak in  favor of the  five-year extension to the  ARDOR program                                                               
since  the additional  time would  provide security  for planning                                                               
purposes for the  ARDORs.  She further asked  members to consider                                                               
funding ardors to the maximum limit.                                                                                            
3:57:51 PM                                                                                                                    
REPRESENTATIVE MILLETT  asked her  to speak  to successes  of the                                                               
Southeast Conference.   She  said she is  most familiar  with the                                                               
energy projects that the Southeast  Conference has worked on, but                                                               
would like her to speak to the relationship with the DCCED.                                                                     
MS. WRIGHT answered  that the Southeast Conference  has been able                                                               
to  keep  the Kake  Petersburg  Intertie  project moving  forward                                                               
despite the  numerous roadblocks.   She said  the ARDOR  works to                                                               
keep  the environmental  impact statement  moving forward  and to                                                               
keep organizations  informed, including  the U.S.  Forest Service                                                               
and the DOT&PF.   She related that Southeast  Alaska Power Agency                                                               
(SEAPA) -  the utility  that will  run the  project -  and Inside                                                               
Passage Electric Cooperative (IPEC) -  the current utility - have                                                               
signed   an   agreement   through   facilitation   of   Southeast                                                               
Conference.    She  mentioned the  energy  coordinator  has  also                                                               
assisted Reynolds Creek Hydroelectric  Project in moving forward,                                                               
with a project manager and business  plan.  She reported that the                                                               
Southeast  Conference created  the  Integrated  Resource Plan  to                                                               
help Southeast Alaska communities  develop their energy projects.                                                               
She stated  the Southeast  Conference is  very interested  in the                                                               
Alaska   Marine  Highway   System   (AMHS),  and   serves  as   a                                                               
communications conduit between the  governor's office and the 180                                                               
Southeast  Conference members.    Additionally,  the ARDORs  work                                                               
with  the  state  agencies,  such   as  the  DCCED,  on  regional                                                               
development  plans  and energy  plans.    The ARDORs  also  share                                                               
information between  organizations.   In fact, the  Department of                                                               
Labor &  Workforce Development  also uses  the ARDORs  to provide                                                               
them  with a  link of  what  is happening  in the  regions.   The                                                               
Alaska  Workforce Investment  Board  (AWIB) also  works with  the                                                               
ARDORs to assess what is happening  on the ground.  She concluded                                                               
that the  ARDORs support HB  32 and are happy  to do so  from the                                                               
ground up.                                                                                                                      
4:01:46 PM                                                                                                                    
REPRESENTATIVE SADDLER  asked whether  the executive  director of                                                               
Southeast Conference is paid from federal or state funds.                                                                       
MS.  WRIGHT  answered that  state  and  federal funding  provides                                                               
operational  funding and  covers  expenses for  staff, rent,  and                                                               
REPRESENTATIVE   SADDLER,  after   reviewing  the   fiscal  note,                                                               
remarked that the  funding comes from grants and  benefits to the                                                               
ARDOR organization.                                                                                                             
MS. WRIGHT answered yes.                                                                                                        
4:02:36 PM                                                                                                                    
ANDY  VARNER,  Executive  Director,  Southwest  Alaska  Municipal                                                               
Conference,  (SWAMC),  Alaska Regional  Development  Organization                                                               
(ARDORS),   Department   of   Commerce,  Community   &   Economic                                                               
Development  (DCCED),   stated  that   the  SWAMC   serves  three                                                               
subregions of  Southwest Alaska: the  Aleutian/Pribilofs, Bristol                                                               
Bay,  and  Kodiak.   He  said  the SWAMC  is  a  large ARDOR  and                                                               
district about  the size of  Oregon.   He stated that  Ms. Wright                                                               
described the  ARDORs quite well  and the SWAMC uses  its funding                                                               
similarly.  The ARDOR grant makes  up 20 percent of its operating                                                               
budget  but it  also receives  federal funds  as well  as in-kind                                                               
support.   Besides functioning  as an ARDOR,  the SWAMC  has also                                                               
been  designated  as  an economic  development  district  by  the                                                               
Federal   Economic  Development   Administration.     The  Alaska                                                               
Workforce  Investment Board  (AWIB) and  the ARDORs  are figuring                                                               
out  how to  work best  together to  resolve workforce  issues in                                                               
regions, noting that the ARDORs  are willing partners.  The SWAMC                                                               
has been  working on  an upcoming three  day summit  in Anchorage                                                               
and will  also hold  two board  meetings this  week.   Aside from                                                               
economic development  planning, SWAMC and other  ARDORs have been                                                               
working on  regional energy planning  and signing  contracts with                                                               
Alaska Energy Association (AEA).   He recalled that several years                                                               
ago  the Southeast  Conference began  working on  energy planning                                                               
and  signed a  contract with  AEA in  the last  year or  so.   He                                                               
reported that SWAMC currently has  a contract with AEA on Bristol                                                               
Bay and Aleutian regional plans  and has also been discussing the                                                               
Kodiak  regional energy  plan.   Thus SWAMC  may do  three energy                                                               
plans.   He reported  that on  Wednesday the  SWAMC will  hold an                                                               
energy  workshop  to  discuss energy  planning,  priorities,  and                                                               
projects.      Further,   the   SWAMC   conducted   a   Broadband                                                               
telecommunications  strategy   for  the  Southwest   region  that                                                               
addresses    access    and    adoption    issues    to    improve                                                               
telecommunications, infrastructure, and  usage.  He characterized                                                               
this effort  as being  a big economic  linchpin for  the regions.                                                               
In fact, the SWAMC will  attend numerous statewide broadband task                                                               
force meetings to ensure the rural regions are covered.                                                                         
4:07:00 PM                                                                                                                    
MR.  VARNER emphasized  that SWAMC  concentrates on  thinking big                                                               
and small, such  that by thinking small he means  helping mom and                                                               
pop businesses,  tourism operators,  and bed and  breakfast (B&B)                                                               
operators bridge  the digital divide.   For example,  SWAMC helps                                                               
bridge  the  digital  divide  by   conducting  workshops  and  by                                                               
providing support  with the current Vista  volunteer's expertise.                                                               
This effort helps small businesses  and the local economy thrive;                                                               
however, this region  is large that SWAMC must  also think bigger                                                               
and focus  more on  the region as  a whole.   In doing  so, SWAMC                                                               
focuses on the  energy planning previously mentioned,  as well as                                                               
on infrastructure  planning.  He  pointed out two  subregions are                                                               
served by  the AMHS  planning so SWAMC  works to  communicate the                                                               
regional  needs to  the DOT&PF.   The  SWAMC has  also considered                                                               
transshipment in terms of the  opening up of Arctic region, which                                                               
will be discussed  at the economic development  summit later this                                                               
week.   Further,  SWAMC  has worked  to  help Southwest  Alaskans                                                               
participate  in fisheries,  noting  SWAMC's economist  is also  a                                                               
fisherman and  researches the region's fisheries.   Additionally,                                                               
SWAMC  participates  in  the   fishery  maritime  initiative  the                                                               
University  of Alaska  is  working on  to  enhance the  fisheries                                                               
industry.   To summarize,  the SWAMC works  with other  ARDORS on                                                               
economic  development  issues,  such  as  food  and  agriculture,                                                               
energy  planning,  or education  programs.    For example,  SWAMC                                                               
partnered  with the  Anchorage  Economic Development  Corporation                                                               
(AEDC) to tour the Kodiak  launch facility with a Lockheed Martin                                                               
representative.   In  conclusion,  the ARDORs  have been  working                                                               
together to  leverage expertise to  move the economy  forward and                                                               
partner on  projects, especially  given tighter funding,  to move                                                               
the economy  forward.   He emphasized that  the ARDOR  funding is                                                               
extremely  important to  SWAMC since  it "keeps  the lights  on."                                                               
The SWAMC has  been an ARDOR for 25 years,  which means this year                                                               
the ARDORs  celebrate their Silver  Jubilee.  Finally,  the SWAMC                                                               
has enjoyed working  with DCED to make the program  as good as it                                                               
can be.                                                                                                                         
4:10:32 PM                                                                                                                    
REPRESENTATIVE MILLETT asked how much  of the $807,539 in funding                                                               
SWAMC receives.                                                                                                                 
MR. VARNER answered  $62,122.  He explained the  funds are evenly                                                               
divided among the 12 ARDORs.                                                                                                    
4:10:55 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  asked for  the  nature  of the  energy                                                               
plans   and   whether   the  SWAMC   is   working   on   thermal,                                                               
hydroelectric, or wind power.                                                                                                   
MR. VARNER answered  the SWAMC has taken a  comprehensive look at                                                               
available  options   and  alternatives  for  communities.     For                                                               
example, SWAMC traveled to Adak  recently with an energy engineer                                                               
and  two SWAMC  staff to  meet with  different leaders  to assess                                                               
options and  help the  community map  out an  energy future.   He                                                               
pointed out  the area has  enormous hydroelectric  potential, but                                                               
it has never been  developed.  One thing SWAMC can  do is to help                                                               
the  community  and the  region  prioritize  energy projects  and                                                               
pathways to  help the local  energy situation, which  should also                                                               
help the  region's economy.  In  fact, the main reason  SWAMC has                                                               
been involved  is to  create economic  development opportunities.                                                               
Thus, SWAMC will help with  resource assessment and to prioritize                                                               
projects and  alternatives in order  to map out an  energy future                                                               
for the region.                                                                                                                 
4:12:29 PM                                                                                                                    
CHAIR OLSON stated that public testimony would be held open.                                                                    
[HB 71 was held over.]                                                                                                          

Document Name Date/Time Subjects
HB32 Draft Proposed Blank CS ver C.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Sectional Analysis.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Sponsor Statement.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 ver U.PDF HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Summary of Changes ver U to ver C.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Supporting Documents-Letter-NFIB 1-18-2013.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Supporting Documents-Letter-NFIB 2-14-2013.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB71 ver A.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Sponsor Statement.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Supporting Documents-ARDORS Program.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Supporting Documents-ARDORS 2012 Annual report.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Supporting Documents-Southeast Conference-Funding Sources and Letters of Support.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Supporting Documents-Southeast Conference Flyer- 2013 Top Ten.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB71 Fiscal Note-DCCED-DED-02-15-13.pdf HL&C 2/18/2013 3:15:00 PM
HB 71
HB32 Supporting Documents-Letter Southeast Conference 2-15-2013.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Fiscal Note-revised-DCCED-CBPL-02-17-13.pdf HL&C 2/18/2013 3:15:00 PM
HB 32
HB32 Draft Proposed Blank CS ver O(title change).pdf HL&C 2/18/2013 3:15:00 PM
HB 32