Legislature(2011 - 2012)HOUSE FINANCE 519
01/25/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Overview: Dcced - New Division of Economic Development | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL
TRADE AND TOURISM
January 25, 2011
8:04 a.m.
MEMBERS PRESENT
HOUSE COMMUNITY & REGIONAL AFFAIRS
Representative Cathy Engstrom Munoz, Chair
Representative Neal Foster, Vice Chair
Representative Alan Austerman
Representative Alan Dick
Representative Dan Saddler
Representative Sharon Cissna
Representative Berta Gardner
HOUSE ECONOMIC DEVELOPMENT, INTERNATIONAL TRADE AND TOURISM
Representative Bob Herron, Chair
Representative Cathy Munoz
Representative Steve Thompson
Representative Berta Gardner
MEMBERS ABSENT
HOUSE COMMUNITY & REGIONAL AFFAIRS
All members present
HOUSE ECONOMIC DEVELOPMENT, INTERNATIONAL TRADE AND TOURISM
Representative Peggy Wilson
Representative Kurt Olson
Representative Wes Keller
Representative Chris Tuck
COMMITTEE CALENDAR
OVERVIEW: DCCED - NEW DIVISION OF ECONOMIC DEVELOPMENT
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
SUSAN BELL, Commissioner
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Provided a brief overview of the Department
of Commerce, Community & Economic Development.
WANETTA AYERS, Director
Division of Economic Development
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Provided a presentation of the Division of
Economic Development.
ACTION NARRATIVE
8:04:43 AM
CHAIR CATHY ENGSTROM MUNOZ called the joint meeting of the House
Community and Regional Affairs Standing Committee and the House
Special Committee on Economic Development, International Trade
and Tourism to order at 8:04 a.m. Representatives Austerman,
Foster, Dick, Saddler, Thompson, Herron, and Munoz were present
at the call to order. Representatives Cissna and Gardner
arrived as the meeting was in progress.
^Overview: DCCED - New Division of Economic Development
Overview: DCCED - New Division of Economic Development
8:05:11 AM
CHAIR MUNOZ announced that the two committees would hear a
presentation from Department of Commerce, Community & Economic
Development (DCCED) regarding the merger of the Division of
Investments and the Division of Economic Development. The
aforementioned merger was the result of a charge led by
Representative Austerman last year to determine how those state
agencies that are focused on economic development and community
development, particularly DCCED, could be most effective.
8:06:53 AM
REPRESENTATIVE AUSTERMAN informed the committee that two years
ago when he sat on the DCCED Finance Subcommittee, it quickly
became apparent that economic development had fallen by the
wayside while the community and regional affairs side of the
department was strong. Since that time, the governor has made
some major changes in DCCED, such as appointing a commissioner
with an economic development background. This new commissioner
has already made changes that he has been pleased to see,
particularly in terms of the strong emphasis on returning focus
to economic development. Representative Austerman pointed out
that communities will only function properly if there is a solid
economic base within the state. However, he cautioned the
committees to ensure that the focus on economic development
pendulum doesn't go too far and diminish the focus on the
community and regional affairs.
8:08:53 AM
CHAIR HERRON noted his appreciation for Representative
Austerman's comments as it was imperative to make some changes
[in DCCED]. He emphasized that it's in the best interest of the
two committees to ensure [the changes] work.
8:10:25 AM
SUSAN BELL, Commissioner, Department of Commerce, Community &
Economic Development (DCCED), referring to the presentation
entitled "Promoting a Healthy economy and Strong Communities",
highlighted DCCED's broad mission to promote a healthy economy,
strong communities, and protect consumers in Alaska. In working
toward the aforementioned mission, DCCED ensures there are
programs that focus on sustainable economic growth and that a
stable business climate is provided while also assisting in the
development of sustainable energy systems and addressing the
cost of energy in rural Alaska in particular. Commissioner Bell
emphasized DCCED's important role in ensuring the sustainability
of communities throughout the state, which results in the
department interacting with a wide array of communities of
various sizes. She then directed the committees' attention to
slide 5, which specifies the six core agencies within DCCED.
She then reviewed slide 5 entitled "Department Organization",
which specifies the corporate agencies as well as the core
agencies of the department. She noted that the department has a
different relationship with each of the corporate agencies. For
instance, sometimes department staff sit on the board and
sometimes department staff is engaged in the administrative
functions of accounting or other support services while with
some corporate agencies the department has an arm's length
relationship. Two of the more independent corporate entities
are the Regulatory Commission of Alaska (RCA) and the Alaska
Railroad Corporation (ARRC). Still, the department's mission
remains. She briefly touched on consumer protection by
highlighting the department's regulatory entities, which include
the Division of Banking & Securities, the Division of Insurance,
the Division of Corporations, Business & Professional Licensing,
and the Regulatory Commission of Alaska. Commissioner Bell
moved on to slide 6 entitled "Who We Are", which uses a map to
illustrate that DCCED's presence is throughout the state. The
department has 10 locations and 538 employees. Commissioner Bell
recalled the pivotal meeting with the House Community and
Regional Affairs Standing Committee last year in which the
department concurred with many of the committee's ideas and
brought many of its own ideas forward. She characterized this
merger as providing framework as the department moves forward.
8:16:17 AM
WANETTA AYERS, Director, Division of Economic Development,
Department of Commerce, Community & Economic Development
(DCCED), began by informing the committees that she is a life-
long Alaskan who has spent most of her career in community and
economic development, primarily focused in rural Alaska. She
then directed the committees' attention to slide 8 "Economic
Development defined ..." that provides the definition of
economic development adopted by the International Economic
Development Council (IEDC). The focus, she highlighted, is on
the economic well-being and quality of life for all Alaskans.
The aforementioned is dependent upon creating jobs and providing
a stable tax base. In reference to slide 9, Ms. Ayers
highlighted that economic development takes place over the long-
term with focus on the future economy. She then moved on to
slide 10 entitled "Cluster Development Framework", which
illustrates the need to focus on trade sector industries, those
trade sector industries and businesses that export goods and
services from Alaska. The trade sectors and the network of
supplier firms that support the trade sectors are what the
private sector does. The economic foundation of the cluster
development framework is in which everyone participates and can
be worked on to make the trade sectors and supplier network more
efficient.
8:20:13 AM
MS. AYERS continued on to slide 11 entitled "Examining Economic
Development". She reminded the committee of the December 4,
2010, House Special Committee on Economic Development,
International Trade and Tourism, which helped to catalyze
discussions regarding how to better organize in terms of
economic development. During the course of the last legislative
session, there were also conversations regarding economic
development which proved to be very helpful, particularly in
terms of framing what has happened since then. Concurrently,
the Alaska Forward Initiative was occurring, which, as the quote
on slide 12 illustrates, was very critical of Alaska's economic
development system. The assessment was that there was a lot of
fragmentation and resources weren't being aligned for the
highest and best purpose. Ms. Ayers related that economic
development is a priority for Governor Parnell as related in the
quote presented on slide 13. As a result of the aforementioned
Governor Parnell issued Administrative Order 257, which created
the Division of Economic Development from the former Office of
Economic Development and the Division of Investments.
Therefore, one cohesive operating unit that addresses
development and financing activities was created. Such a unit
will help focus and facilitate restructuring the state's
economic development mechanisms within state government. Within
this new division, work will be done to create operational and
cost efficiencies as well as lay the foundation for various
improvements. Since some of the key foundational work for
economic development isn't addressed by statute or the former
organization of the two units, the new division will need to do
more with the following: business outreach and technical
assistance, marketing and promotion of financing tools, outreach
and development of traditional targeted industries, as well as
development of emerging growth industries. Additionally, the
Division of Economic Development wants to work toward
overarching marketing and branding of Alaska, expanding business
outreach and technical assistance, and expanding finance
programs. Further, a key area of focus for the division is the
coordination of a multiagency, multidisciplinary development
response because no one department or agency within state
government can fully address economic development.
8:26:03 AM
MS. AYERS then directed the committees' attention to slide 16,
which addresses the impact of staff across the state. The chart
on slide 16 specifies the staff by duty station and section. As
the chart specifies, most of the division's staff continues to
be located in the Financing Section in Juneau. She noted that
by statute the division has ongoing responsibility for a public
lands information center in Tok. The chart on slide 17 entitled
"Annual State Loan Fund Report FY 2010" relates the number of
new loans closed in the last fiscal year by loan fund as well as
the total principal on loans closed, which was $17.1 million
last year. Slide 18 entitled "FY2010 Loan Servicing Summary"
provides a summary of all loan servicing within the last fiscal
year. The division has over 2,500 accounts with total principal
outstanding of $197.5 million. Ms. Ayers continued with slide
19 entitled "New Financing Tools", which is a summary of the
Alaska microloan revolving loan fund, the commercial charter
fisheries revolving loan fund, and the mariculture revolving
loan fund each of which developed from discussions with the
private sector. The need for this public financing was because
these areas were not served or were underserved by private
lenders.
8:29:25 AM
REPRESENTATIVE SADDLER inquired as to how these new financing
tools for commercial fishing will interact with the Commercial
Fishing and Agriculture Bank (CFAB).
MS. AYERS explained that although CFAB is addressed in Alaska
statute, it is a traditional private sector lender and operates
under the same parameters as any private lender. The
[department] has partnered with CFAB in the past. She pointed
out that [the department's] borrowers need to be turned down by
a private lender first.
8:30:45 AM
REPRESENTATIVE SADDLER related his understanding from a
presentation from the Division of Agriculture in the Department
of Natural Resources that the agriculture revolving loan fund
can cover shell fish loans.
MS. AYERS said that she didn't realize there had been such a
determination. However, the division's development staff and
economists have been working with existing mariculture
operators, primarily in Southeast and Southcentral Alaska. The
agriculture revolving loan fund is operated in DNR and its
operating parameters are a bit different than in DCCED.
Therefore, the division has been working with potential
borrowers and others promoting the mariculture industry to
structure the mariculture loan specifically to the needs of the
mariculture industry. She explained that depending upon the
borrowers product mix, it could take three to six years to
develop a reliable revenue stream. Therefore, the mariculture
revolving loan fund is designed to be the patience capital that
would have interest only payments during those first three to
six years until a reliable revenue stream is developed.
COMMISSIONER BELL interjected that at stages when the governor's
office and the legislative director were comfortable, the
concepts were vetted through [DCCED's] economic advisory
council. The aforementioned is a group of about 20 individuals
from different economic sectors, including the banking industry.
She then noted that [the department] also spoke with CFAB to
understand what is good public policy in terms of providing
financing opportunities, retaining Alaskan employment, and
supporting entrepreneurs.
8:33:37 AM
REPRESENTATIVE FOSTER related his appreciation for Commissioner
Bell's and Ms. Ayer's backgrounds in rural Alaska. He also
related his belief that both will serve the state well. With
regard to the Alaska microloan revolving loan fund,
Representative Foster characterized it as a good program,
particularly for those in rural Alaska. He then inquired as to
how the division would communicate the program to those
locations in the Bush where the agency does not have a presence.
MS. AYERS reminded the committees that in addition to the
division's development staff the Alaska Regional Development
Organization (ARDOR) program provides 12 outlets. Furthermore,
the division has relationships with lots of other organizations
and through the Division of Community & Regional Affairs the
division has access to tribal and municipal organizations that
are involved with economic development. She related that she
believes the microloan revolving loan fund will be very welcome
in rural Alaska and thus she anticipated much activity with it.
8:35:17 AM
REPRESENTATIVE AUSTERMAN related his understanding that now
DCCED has only one deputy commissioner rather than two deputy
commissioners, one on the rural side and one on the economic
development side. He related his further understanding that the
former deputy commissioner on the rural side has been made a
special assistant. He inquired as to the difference in this new
organization.
COMMISISONER BELL confirmed Representative Austerman's
recollection of there being two deputy commissioners last year.
Commissioner Bell explained that with the anticipated merger,
she took into account the size of the department, the geographic
locations of the staff, the involvement in various subcabinets
and commissions; she felt comfortable proceeding with a single
deputy commissioner and two special assistants one in Juneau and
one in Anchorage. The special assistant in Anchorage has been
tasked with some priority projects, which include Connect
Alaska, broad band, and the Rural Subcabinet. The Anchorage
special assistant is also tasked with developing a long-term
strategy for international trade with the Office of
International Trade and the Film Office.
8:38:17 AM
REPRESENTATIVE AUSTERMAN inquired as to who is responsible for
rural development and community affairs.
COMMISSIONER BELL clarified that unlike the past; now both the
commissioner and the deputy commissioner are directly engaged
with all the divisions.
8:39:11 AM
CHAIR HERRON, referring to slide 17, inquired as to why the
average statutory interest rate for the Rural Development Fund
is 6 percent while the rate for the other funds is lower.
MS. AYERS explained that DCCED manages the Rural Development
Fund run on behalf of the Alaska Industrial Development and
Export Authority (AIDEA). The fund was capitalized through an
appropriation from the Economic Development Administration
(EDA). There are a couple of loan funds, such as the Small
Business Economic Development (SBED) Fund, that are managed in
that way. She noted that the division has been working with EDA
to unify management between the two funds. There are some
geographic restrictions on certain aspects of the funds, and the
division wants to make the fund available statewide so that they
don't have to be managed separately. In further response to
Chair Herron, Ms. Ayers said that she could provide more
information on specific loans at a later date.
8:40:42 AM
CHAIR HERRON, referring to slide 18, asked if there is a certain
sector of economic development that is in delinquency or
foreclosure.
MS. AYERS related that a number of fisheries enhancement
accounts have went into delinquent status and interest only
payments have been taken in order to work out some of the
revenue issues.
8:41:33 AM
CHAIR HERRON recalled that last year he and Representative
Austerman put forth an effort to establish an economic
development commission. He asked if the administration is
considering such.
COMMISSIONER BELL said that she recognized that although the
legislation forming such a commission last year didn't pass,
interest remained. Therefore, the department has turned its
focus from whether or not a commission should be formed to
enhancing the effectiveness of the department's program.
CHAIR HERRON asked then if the department and the governor
thought it's better to build within rather than to have a
broader overarching commission.
COMMISSIONER BELL said that the department recognizes the
concern regarding the effectiveness of DCCED's programs.
Therefore, the department has reviewed, within its existing
capacity, how to deliver the most effective programs.
CHAIR HERRON expressed the need for there to be coordination
such that [the Division of Community & Regional Affairs] staff
works with the client and his/her peer in [the Division of
Economic Development] to assist the client.
8:45:01 AM
CHAIR HERRON then inquired as to why there is an increase in the
base for the Division of Economic Development.
MS. AYERS answered that part of the funding is related to the
one-time increment last year for a business outreach officer.
The business outreach officer has been deemed very valuable,
particularly with coordination of complex projects that involve
multiple agencies and require ongoing involvement from the
Division of Economic Development. Therefore, part of the
funding would go toward funding that position on an ongoing
basis. Additionally, some of the funding will go toward a
position that was formerly funded at 70 percent funded by a
reimbursable services agreement (RSA) through the governor's
office. Moreover, last year's funding only provided partial
funding for a development specialist position that was focused
on minerals. The [division's] funding for existing staff levels
was significantly down in fiscal year (FY) 10, and thus most [of
the increase] will restore full funding for those personnel
services for those positions.
8:47:15 AM
CHAIR MUNOZ inquired as to the makeup and the role of the
Economic Advisory Council in working with the department.
COMMISSIONER BELL opined that the department felt it was
important to have a group of individuals with some continuity.
The council has representatives from various industry sectors.
The desire, she related, was to have supportive, candid
individuals that were representative of the state geographically
as well as representative of the industries in the state. The
first meeting of the Economic Advisory Council was in September
when the department was in the process of developing its
legislative proposals and budget. At that stage, it was
premature for the department to share its concepts with the
council, but in early December the department approached the
council to broadly describe some of the ideas related to
economic development within the Division of Economic Development
and other agencies within the department. She anticipated that
the council would meet quarterly. While the [department] has
increased its engagement with various economic development
organizations and private businesses throughout the state, she
felt it would be valuable to have some continuity from a group
and receive feedback regarding the department. Commissioner
Bell related that she has been pleased with the council and
anticipates continuation of it.
MS. AYERS added that in addition to the Economic Advisory
Council, the Minerals Commission and Alaska Travel Industry
Association (ATIA) as well as other industry sectors provide
feedback on initiatives being considered by the division and the
department. She mentioned that the division has received
positive feedback and is seeking more feedback to shape its
economic development efforts.
8:50:29 AM
REPRESENTATIVE FOSTER expressed interest in the makeup of the
Economic Advisory Council. He asked if the seats are designated
or open.
COMMISSIONER BELL related that the department made a list of
individuals it thought would be constructive and candid and then
reviewed these individuals in terms of the organizations in
which they were involved as well as their geographic location.
The council is a group the department formed for itself, so it
doesn't have a statutory basis and the members aren't appointed
by the governor. The council is asked to be the department's
sounding board.
8:51:47 AM
REPRESENTATIVE SADDLER inquired as to what the department's
measures of success will be with regard to this new division.
COMMISSIONER BELL answered that the department is working on
[measuring the success]. The number of loans and jobs created
are measured. Commissioner Bell related that there have been
candid discussions with the administrative services director
regarding the need to review existing performance measures to
determine if DCCED is focusing on the appropriate items.
Internally, the department has identified, but not yet
implemented, the need to review what indicators should be set to
determine where the department and the state are making a
difference in the economy. She indicated that the department
reviews things within its purview as well as outside its
purview, such as infrastructure, roads, communication, and
public safety. Those areas within the department's charge
include how the state markets itself as well as the state's
environmental and regulatory tax policy. The department has a
role in advising where the state is going via departmental
proposals and how that's communicated with the business
community, whether it's inside or outside the state.
Commissioner Bell indicated that the department will bring forth
more specific measures.
8:54:37 AM
REPRESENTATIVE SADDLER remarked that he is intrigued by the idea
of cluster-based investment and the Alaska Forward Initiative.
MS. AYERS related that the Alaska Forward Initiative has taken
many years to mobilize, and began with directors of the various
ARDORs wanting to have a comprehensive economic development
strategy for the state. Over the course of several years
funding was initially obtained through the Denali Commission and
last year the state contributed funding. The ARDOR directors
have continued to lead the effort. She noted that the
leadership council has been developed with lots of private
sector representatives who will shape the next phase of the
Alaska Forward Initiative. The idea of cluster-based investment
goes back to the notion that there are a lot of resources but
the success will be contingent upon the ability to align and
move the resources in a coordinated fashion. The leadership
council has identified the following five priority areas: the
oil and gas industry, the tourism industry, alternative energy,
advanced business systems, and international trade and
logistics.
8:56:58 AM
REPRESENTATIVE DICK informed the committees that over the last
44 years he has lived in very small communities in Alaska, the
largest of which was 350 people. He expressed the desire to
talk with the department regarding how to reach all the people
in all the communities. Often, there are very ambitious folks
in these small communities who would never hear what the
department is doing if the department only spoke to the local
government.
8:57:55 AM
REPRESENTATIVE CISSNA highlighted that what has been useful for
the House Community and Regional Affairs Standing Committee in
the past, has been the various reports the department develops.
For instance, the report on the price of fuel has been very
helpful. She then opined that it would be useful for this
committee to have a good working knowledge of where in Alaska
there are problems. She further opined that it would be helpful
for the committee to know the departmental overlaps.
COMMISSIONER BELL thanked Representative Cissna for recognizing
the value of DCCED's reports. She indicated that the department
will seek input regarding on which topics it would be
appropriate to focus. With regard to the overlap of departments
and working across departments and divisions, representatives
from DCCED and various other departments and organizations are
going to travel to one of the leading mineral trade shows and
conferences. Commissioner Bell opined that [the departments]
are most effective when they pull together.
9:01:58 AM
REPRESENTATIVE GARDNER said that the investment credit system
under Alaska's Clear and Equitable Share (ACES) is not well
understood. She noted that Commonwealth North is offering a
series of presentations, at which one of the presenters, an
independent explorer, stated that Alaska's tax incentive credit
system is one of the best in the world. She further noted that
a former commissioner has related to her that the state's
biggest problem is that it's not marketing Alaska's tax
incentive credit system. She opined that in her view ACES isn't
just about the state take, it's also about getting small
independent explorers in the mix and to do so in a manner that
offers a meaningful opportunity. She questioned what the state
is doing and/or what it should do.
MS. AYERS answered that although oil and gas isn't part of the
division's portfolio, it is a core industry that's considered in
terms of how it shapes other opportunities and questions. Ms.
Ayers said that Representative Gardner's question illustrates
what's required in every development opportunity; that is
businesses want to know the state's tax regime, regulations, and
the available economic foundations. The pivotal role the
Division of Economic Development can play is navigating the
state's system, illustrating the opportunities within the state,
and communicating the aforementioned to the private sector in
language it can understand. The division can and should take on
the role of the marketing and communications piece of economic
development. The division is trying to do so within its
existing statutory authority.
9:05:49 AM
REPRESENTATIVE GARDNER then asked if the Division of Economic
Development is taking this matter up or should she discuss it
with another agency.
COMMISSIONER BELL related that the department believes it can
serve a broader role by looking at what the state should and
could do in terms of financing, research, marketing, and
business and technical assistance and coordination. By
organizing with industry expertise internally, the department
believes it can serve statewide needs more effectively.
REPRESENTATIVE GARDNER again inquired as to who should be pushed
to do actual oil and gas marketing to the independents.
MS. AYERS remarked that it would be a great conversation to
continue throughout this session with regard to existing
industries and emerging opportunities. The [division] would
like to do more and the resources to do more marketing, but at
this point the department is 90 days into the merger and will
have more of a story in the future.
COMMISSIONER BELL related that each department is talking with
business leaders in the oil and gas industry. She offered to
take Representative Gardner's comments to her colleagues in
order to ensure that policies are being clearly articulated.
With regard to marketing and communication, Commissioner Bell
characterized that as a growing role for DCCED that wouldn't be
limited to certain industry sectors.
REPRESENTATIVE GARDNER stated that she would like Alaska to have
a solid and unequivocal role in trade industry conventions in
terms of marketing opportunities in Alaska.
9:09:32 AM
REPRESENTATIVE AUSTERMAN opined that much of this has to do with
the legislature itself, no matter the resource being marketed.
He noted that most other states have their own marketing entity
that markets the state as a place to do business. However,
Alaska hasn't done so. He recalled that last year the
legislature placed $17 million into tourism marketing and $2.5
million into the Alaska Seafood Marketing Institute (ASMI).
Representative Austerman then suggested that the legislature
needs to come together to market Alaska as a place to do
business, no matter the industry. Furthermore, the legislature
has to come together to fund this marketing because it's going
to be very difficult to market the state with the current funds.
He noted that this conversation has also been had with the
Senate.
9:12:10 AM
REPRESENTATIVE FOSTER said that he was happy to see that energy
is being considered part of economic development. As the co-
chair of the House Special Committee on Energy, Representative
Foster encouraged the department representatives to let him know
if his committee can help in any way. With regard to the trade
show departmental staff will be attending, he inquired as to
what kinds of marketing and education is done. He further
inquired as to whether there's a packet or presentation that's
used for these trade shows.
MS. AYERS explained that due to the volume of information the
minerals industry needs, the department would provide a disc
with information regarding mineral potential, the tax and
regulatory regime, as well as workforce opportunities. It's a
fairly comprehensive package, which she offered to provide to
all members. Additionally, at this particular trade show, the
department will focus on rare earth element opportunities for
which the Department of Natural Resources has produced a thumb
drive with pertinent information.
REPRESENTATIVE FOSTER noted that he is glad to hear of the focus
on rare earth element opportunities in Alaska, particularly in
light of China's current stance.
9:15:35 AM
CHAIR HERRON requested information on the governor's proposed
legislation, HB 119, specifically in terms of the definition of
"relating to the definition of 'own' for the economic
development account."
COMMISSIONER BELL reminded the committee that last year
legislation passed that allowed AIDEA to own part of a project.
After the passage of that legislation last year, the need to
have specific language to allow AIDEA to participate in a
limited liability company (LLC) and other business structures
was pointed out. Therefore, the language in HB 119 identified
by Chair Herron was included as well as language that would
explore the ability of AIDEA having new market tax credits.
9:17:34 AM
REPRESENTATIVE SADDLER asked if the merger of the agencies
within DCCED caused any administrative, personnel, or budgetary
changes.
MS. AYERS responded that the division is in the process of
reviewing efficiencies, including going from two directors to
one director while also having a management team that includes a
manager of the development section and the financing section.
The division is also reviewing efficiencies while maintaining
the integrity of the budget for the individual sections. The
aforementioned may largely come in allocating those costs in the
coding process for accounting. In further response to
Representative Saddler, Ms. Ayers said that at this point there
has been no net change with regard to geographic parity.
9:19:06 AM
REPRESENTATIVE AUSTERMAN asked if international trade remains
within DCCED.
COMMISSIONER BELL answered that the Office of International
Trade is housed within the governor's office. However, she
highlighted the need for that office to work closely with DCCED.
To that end, the department requested the governor task DCCED
with a long-term strategy that reviewed the department's trade
missions, emerging markets, existing markets/activities,
infrastructure needs, workforce training needs, and marketing
needs. She emphasized that trade missions are just a piece of
the aforementioned. The department has begun to meet and is
ensuring that DCCED is communicating with state and community
entities while also performing private sector outreach.
Commissioner Bell opined that it's imperative for DCCED to work
with the Office of International Trade.
MS. AYERS, in further response to Representative Austerman,
informed the committees that the Office of International Trade
has two trade specialist positions that are supervised by the
governor's office director in Anchorage.
9:21:31 AM
CHAIR MUNOZ asked if the new financing tools will be housed in
the new division. With regard to the microloan revolving fund,
Chair Munoz asked if there are restrictions on the businesses
that can apply.
MS. AYERS indicated that the new financing tools will be housed
in the new division. The microloan revolving fund is modeled on
a SBA microloan program that isn't available in Alaska because
there isn't an intermediary lender to implement the program.
Therefore, there aren't any restrictions on the type of business
that can apply and thus the microloan revolving fund provides an
opportunity to have a financing tool that's available in most
other states in Alaska. Although she couldn't anticipate the
traffic of this loan, rural areas and small businesses have
related the need to have a financing tool that focuses on their
marketing opportunities and the scale of those. In further
response to Chair Munoz, the legislation for the revolving
microloan fund is HB 121.
9:23:12 AM
CHAIR MUNOZ thanked the department for the presentation and its
responsiveness to the input, particularly the input of
Representatives Austerman and Herron and the House Community and
Regional Affairs Standing Committee.
9:24:00 AM
COMMISSIONER BELL introduced DCCED staff in attendance.
9:25:01 AM
CHAIR MUNOZ encouraged committee members to contact her
regarding ideas for presentations or a particular direction for
the committee to pursue. She reviewed the requests the House
Community and Regional Affairs Standing Committee has already
received as well as its upcoming agenda.
9:26:39 AM
ADJOURNMENT
There being no further business before the committees, the joint
meeting of the House Community and Regional Affairs Standing
Committee and the House Special Committee on Economic
Development, International Trade and Tourism was adjourned at
9:26 a.m.
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