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
*+ HB 32 LINES OF BUSINESS ON BUSINESS LICENSE TELECONFERENCED
Heard & Held
*+ HB 71 AK REGIONAL ECONOMIC ASSISTANCE PROGRAM TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       February 18, 2013                                                                                        
                           3:21 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
Representative Charisse Millett                                                                                                 
Representative Dan Saddler                                                                                                      
Representative Andy Josephson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lora Reinbold, Vice Chair                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 32                                                                                                               
"An Act providing for the issuance of one business license for                                                                  
multiple lines of business; and providing for reissuance of a                                                                   
business license to correct a mistake on the license."                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 71                                                                                                               
"An Act extending the termination date of the Alaska regional                                                                   
economic assistance program; and providing for an effective                                                                     
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 32                                                                                                                   
SHORT TITLE: LINES OF BUSINESS ON BUSINESS LICENSE                                                                              
SPONSOR(s): REPRESENTATIVE(s) COSTELLO, HUGHES                                                                                  
                                                                                                                                
01/16/13       (H)       PREFILE RELEASED 1/7/13                                                                                
01/16/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/13       (H)       L&C, FIN                                                                                               
02/18/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 71                                                                                                                   
SHORT TITLE: AK REGIONAL ECONOMIC ASSISTANCE PROGRAM                                                                            
SPONSOR(s): REPRESENTATIVE(s) HUGHES                                                                                            
                                                                                                                                
01/16/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/13       (H)       L&C, FIN                                                                                               
02/18/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE MIA COSTELLO                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions as a prime                                                              
joint sponsor of HB 32.                                                                                                         
                                                                                                                                
MARY SCHLOSSER, Staff                                                                                                           
Representative Mia Costello                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of Representative Mia                                                                
Costello, as a prime joint sponsor of HB 32.                                                                                    
                                                                                                                                
REPRESENTATIVE SHELLEY HUGHES                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as a prime joint sponsor of HB                                                                 
32.                                                                                                                             
                                                                                                                                
DON HABEGER, Director                                                                                                           
Division of Corporations, Business, and Professional Licensing                                                                  
(DCBPL)                                                                                                                         
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information on HB 32                                                                            
                                                                                                                                
CATHIE ROEMMICH, Chief Executive Director (CEO)                                                                                 
Juneau Chamber of Commerce (JCC)                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 32.                                                                           
                                                                                                                                
PEGGY ANN MCCONNOCHIE, Owner                                                                                                    
ACH Consulting; Real Estate Broker                                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 32.                                                                
                                                                                                                                
SHERRILEE BULLER, Owner                                                                                                         
Upstream Mobile                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion HB 32.                                                                   
                                                                                                                                
REPRESENTATIVE SHELLEY HUGHES                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Testified  as a joint  prime sponsor  of HB                                                             
71.                                                                                                                             
                                                                                                                                
SHELLY WRIGHT, Executive Director                                                                                               
Southeast Conference                                                                                                            
Alaska Regional Development Organization (ARDOR)                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 71.                                                                
                                                                                                                                
ANDY VARNER, Executive Director                                                                                                 
Southwest Alaska Municipal Conference                                                                                           
(SWAMC)                                                                                                                         
Alaska Regional Development Organization (ARDORS)                                                                               
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 71.                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:21:39 PM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee  meeting  to  order  at   3:21  p.m.    Representatives                                                               
Chenault, Herron,  Saddler, Josephson, and Olson  were present at                                                               
the  call  to  order.   Representative  Millett  arrived  as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
          HB 32-LINES OF BUSINESS ON BUSINESS LICENSE                                                                       
                                                                                                                                
3:22:01 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
HOUSE BILL  NO. 32,  "An Act  providing for  the issuance  of one                                                               
business license  for multiple lines  of business;  and providing                                                               
for reissuance of a business license  to correct a mistake on the                                                               
license."                                                                                                                       
                                                                                                                                
3:22:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MIA COSTELLO,  Alaska State  Legislature, Juneau,                                                               
Alaska, stated Alaska can do a  better job of creating a business                                                               
friendly  environment.   Small  business  represents  one of  the                                                               
fastest ways to grow Alaska's economy.                                                                                          
                                                                                                                              
REPRESENTATIVE  SADDLER moved  to  adopt  the proposed  committee                                                               
substitute (CS) for HB 32,  labeled 28-LS0192\O, Martin, 2/16/13,                                                               
as the  working document.   There being  no objection,  Version O                                                               
was before the committee.                                                                                                       
                                                                                                                                
3:23:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COSTELLO  stated that  HB 32  will do  two things.                                                               
First, it would  allow people who apply for  business licenses to                                                               
include multiple  lines of business  in the license.   Second, it                                                               
would allow a business license holder  to add a new line to their                                                               
current  license.   She  said  she  introduced  the bill  when  a                                                               
constituent made  a change  to her business  and was  required to                                                               
reapply for a business license.                                                                                                 
                                                                                                                                
3:24:20 PM                                                                                                                    
                                                                                                                                
MARY SCHLOSSER, Staff, Representative  Mia Costello, Alaska State                                                               
Legislature, stated  that under  current law a  separate business                                                               
license  is  required  for  each line  of  business  or  business                                                               
activity.   First, this bill would  allow a business to  obtain a                                                               
license to  cover all lines of  business.  It would  establish an                                                               
application process to allow for  multiple lines of business on a                                                               
single license application  with one fee charged.   Second, HB 32                                                               
would make  the process more  consumer friendly by  smoothing the                                                               
process for  changing the  business licenses.   She  related this                                                               
bill would also require the division  to correct any errors at no                                                               
charge while  the business license  is active.   Additionally, if                                                               
the  consumer needs  to  make a  change the  consumer  can do  so                                                               
without incurring  fees within  90 days  of the  business license                                                               
application.    Finally,  this bill  provides  for  a  transition                                                               
between  one type  of  licensing system  and the  new  one.   She                                                               
related  that after  working with  the Division  of Corporations,                                                               
Business,  and Professional  Licensing (DCBPL),  the joint  prime                                                               
sponsors  are requesting  some minor  modifications, included  in                                                               
Version O.                                                                                                                      
                                                                                                                                
3:25:34 PM                                                                                                                    
                                                                                                                                
MS. SCHLOSSER related the first change  [on page 1, line 8] would                                                               
emphasize that  the bill pertains  to multiple lines  of business                                                               
and not  just a  single line.   The second  change in  Section 3,                                                               
[page  2, lines  8-11]  would clarify  the  correction of  errors                                                               
process and that the change process  is limited to a 90-day grace                                                               
period.  The third change would  require an altered bill title to                                                               
reflect  that the  changes to  the business  license can  also be                                                               
permitted due  to mistakes or  for other reasons.   She concluded                                                               
that Representative  Costello's goal in  introducing HB 32  is to                                                               
make it possible to license a  business, rather than the lines of                                                               
business, which could help make  the state consumer friendly.  In                                                               
closing, she mentioned that Alaska  is ranked 49th by [MSNBC] and                                                               
42nd by Forbes in terms of business-friendly practices.                                                                       
                                                                                                                                
3:26:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SHELLEY   HUGHES,  Alaska   State   Legislature,                                                               
remarked on the  importance of anything that can be  done to move                                                               
Alaska  up in  the ranking.    She said  she wants  Alaska to  be                                                               
business friendly and small businesses  are the heart and soul of                                                               
the folks  in Alaska.  She  concluded that HB 32  is an important                                                               
bill.  She urged members to move the bill out of committee.                                                                     
                                                                                                                                
3:27:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER referred to page  2, line 10 of Version O.                                                               
She asked for the  type of change a person may wish  to make on a                                                               
license.                                                                                                                        
                                                                                                                                
REPRESENTATIVE COSTELLO answered a  constituent made a mistake on                                                               
the type of business and realized  it after she had submitted the                                                               
application.  In response to a  question, she said she was unsure                                                               
of the time that had transpired.                                                                                                
                                                                                                                                
3:28:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON asked whether any known opposition.                                                                       
                                                                                                                                
MS. SCHLOSSER answered no.                                                                                                      
                                                                                                                                
3:28:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON understood  that this  bill would  allow a                                                               
single  license if  the  business consists  of  several lines  of                                                               
business with the same owners to have a single license.                                                                         
                                                                                                                                
MS. SCHLOSSER answered that is correct  as long as the owners and                                                               
name of the business is the same.                                                                                               
                                                                                                                                
3:29:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  remarked  he plans  to  cosponsor  the                                                               
bill, but  has some  questions for  the Department  [of Commerce,                                                               
Community & Economic Development.]                                                                                              
                                                                                                                                
3:29:30 PM                                                                                                                    
                                                                                                                                
DON HABEGER,  Director, Division  of Corporations,  Business, and                                                               
Professional   Licensing   (DCBPL),   Department   of   Commerce,                                                               
Community, & Economic Development (DCCED), introduced himself.                                                                  
                                                                                                                                
CHAIR OLSON asked if department has any position on the bill.                                                                   
                                                                                                                                
MR. HABEGER answered  the department does not have  a position on                                                               
the  bill.    He  said  that  certainly  anything  to  streamline                                                               
business friendliness is a good goal.                                                                                           
                                                                                                                                
3:30:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether the  department has  any                                                               
idea of revenue loss it would sustain with passage of HB 32.                                                                    
                                                                                                                                
MR. HABEGER  related he  just found out  the sponsor  intends the                                                               
owner and business  name must be the same.   Thus, the department                                                               
was not  sure how to  define the number.   He clarified  that the                                                               
some business owners have the  same last name with multiple lines                                                               
of business,  with different  licenses.  He  was unsure  if those                                                               
business   owners  were   included;   however,   he  just   heard                                                               
clarification from  testimony that those businesses  would not be                                                               
included.   He was unsure  of the number of  businesses affected,                                                               
but he offered to provide the data to the committee.                                                                            
                                                                                                                                
3:31:36 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON asked for clarification on the fiscal note.                                                                         
                                                                                                                                
MR.  HABEGER answered  that the  fiscal  note refers  to a  prior                                                               
version of the bill, although  he wasn't sure which bill version.                                                               
Currently, the  department would require a  business applicant to                                                               
name  a primary  and  secondary  line of  business  or the  North                                                               
American  Industries  code.   The  division's  database is  built                                                               
around that  code, he said.   He  suggested that if  the business                                                               
opens  up  any  new  lines   of  business  it  may  require  some                                                               
modifications  to  the  division's database  since  the  division                                                               
would need to track more moving pieces.                                                                                         
                                                                                                                                
3:32:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether  monies  received  from                                                               
business licenses fees is deposited to the general fund.                                                                        
                                                                                                                                
MR. HABEGER agreed  business license revenue is  deposited to the                                                               
general fund.                                                                                                                   
                                                                                                                                
3:32:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  said  he  went to  the  online  business                                                               
license database  and noticed the primary  and secondary business                                                               
lines  are  listed.   He  asked  whether  a business  license  is                                                               
currently limited to two lines of businesses.                                                                                   
                                                                                                                                
MR. HABEGER  answered no, that  a business must choose  a primary                                                               
line of business.   Currently, he said the state  offers 19 lines                                                               
of  business.   A business  may further  choose a  specialty, for                                                               
example, a primary  line of business may be  agriculture, but the                                                               
business  may  declare  potato  growing  as  a  specialty.    The                                                               
division uses  the North American Industry  Classification System                                                               
(NAICS) codes to track this  information.  The NAICS code listing                                                               
that the DCCED  has adopted for Alaska is  approximately 16 pages                                                               
in length and  help a business refine the type  of services it is                                                               
offering.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  whether   it  would  be  primary,                                                               
followed by a more explicit detail about the primary business.                                                                  
                                                                                                                                
MR. HABEGER answered  yes, that is correct.   In further response                                                               
to  a question,  he answered  yes  the explicit  detail could  be                                                               
considered a secondary business line.                                                                                           
                                                                                                                                
3:34:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked how  many people who  have licenses                                                               
have  multiple  business licenses.    He  said  he is  trying  to                                                               
determine the number  of businesses that could  collapse into one                                                               
business to help determine the potential revenue loss.                                                                          
                                                                                                                                
MR. HABEGER,  based on the department's  current understanding of                                                               
the intent in Version O,  estimated that about 700 businesses may                                                               
fall under this  category and hold a single  business license. In                                                               
further response  to a question,  he clarified that  the database                                                               
covers name,  address, line  of business.   The  division records                                                               
the date  the business  license is  issued, the  expiration date,                                                               
and the business  name.  He related 700 businesses  have the same                                                               
business name but  hold different licenses.   In further response                                                               
to Chair Olson, he answered  that currently about 60,000 business                                                               
licenses have been issued.                                                                                                      
                                                                                                                                
3:36:22 PM                                                                                                                    
                                                                                                                                
CATHIE ROEMMICH,  Chief Executive Director (CEO),  Juneau Chamber                                                               
of  Commerce  (JCC),  offered  to  read a  letter  she  wrote  to                                                               
Representative  Costello,  sponsor  of  HB 32.    The  Juneau  of                                                               
Chamber  of   Commerce  (JCC),  representing  over   400  Alaskan                                                               
businesses, would like  to add its support for the  passage of HB                                                               
32.   As  a  chamber  of commerce,  the  JCC  sees firsthand  the                                                               
frustrations and red tape that  the very small businesses must go                                                               
through in  order to survive,  to stay  in business, and  to feed                                                               
their families.   Only one  in five small businesses  survive, as                                                               
it is,  and these  hard working  Alaskans know  the value  of the                                                               
dollar and are not asking for a handout, but just a fair shake.                                                                 
                                                                                                                                
MS. ROEMMICH understood that a  business license is necessary for                                                               
every  line  of business  operated  by  a business,  even  though                                                               
essentially it could be one  business doing various seasonal jobs                                                               
to support  their family as many  Alaskans do.  These  extra fees                                                               
can be  a huge burden and  may in fact  be one of the  reasons so                                                               
many businesses fail.                                                                                                           
                                                                                                                                
MS. ROEMMICH said the proposed bill,  HB 32, will require one fee                                                               
to be  paid and  allow a  business to register  all its  lines of                                                               
business on one license and also  allow for a business license to                                                               
be corrected  or changed once,  without charge.  She  stated this                                                               
is  good for  businesses in  Alaska and  supports their  success.                                                               
She concluded that the Juneau  Chamber of Commerce supports HB 32                                                               
and will encourage others to do so as well.                                                                                     
                                                                                                                                
3:38:53 PM                                                                                                                    
                                                                                                                                
PEGGY  ANN  MCCONNOCHIE,  Owner,   ACH  Consulting;  Real  Estate                                                               
Broker, stated she is a working realtor.   She said she is a real                                                               
estate broker  and the owner of  a company, ACH Consulting.   Her                                                               
business  performs both  real estate  consulting and  real estate                                                               
education,  but  she holds  two  separate  business licenses,  in                                                               
addition to her professional broker's  license.  She reported she                                                               
holds one business  license for her company and  one for teaching                                                               
real estate courses.  She also  said the State of Alaska requires                                                               
her to  hold two  separate business licenses  as the  state views                                                               
her as  having two separate lines  of business.  She  viewed this                                                               
requirement to  be burdensome and  unreasonable.   She emphasized                                                               
that  her  consulting and  teaching  are  both centered  in  real                                                               
estate.  For the state to  require two separate licenses for what                                                               
she views  as one  line of  business is onerous,  she said.   She                                                               
stated that  small businesses  have a  tough enough  time without                                                               
being made  to pay unnecessary fees.   She urged members  to pass                                                               
HB 32.                                                                                                                          
                                                                                                                                
3:40:16 PM                                                                                                                    
                                                                                                                                
SHERRILEE BULLER, Owner, Upstream  Mobile, stated that she opened                                                               
her  business one  and a  half years  ago doing  trade shows  and                                                               
conventions on  behalf of  Alaska Communications.   She  said she                                                               
also is an  authorized agent for another  business, the Satellite                                                               
Guy.   She explained that her  overhead for trade shows  was very                                                               
little, but she unexpectedly had  an opportunity to open a retail                                                               
store.   She  had  mailed  off her  business  license renewal  to                                                               
continue her business  license for two years, but  one week later                                                               
she discovered  her retail store  opportunity.  However,  she had                                                               
decided  she was  no  longer considered  a  sole proprietor,  but                                                               
should be  a single member  limited liability  corporation (LLC).                                                               
Unfortunately, the  department could not  make the change  to the                                                               
LLC, even though the business  license renewal period had not yet                                                               
begun.    She said  she  contacted  Representative Costello,  who                                                               
introduced HB 32.                                                                                                               
                                                                                                                                
3:42:49 PM                                                                                                                    
                                                                                                                                
MS. BULLER,  speaking as a  small business owner, said  she finds                                                               
she must  run multiple lines  of business.   While she  works for                                                               
herself, she  also represents  the two  aforementioned companies.                                                               
She    expressed   concern    about    how    a   new    national                                                               
telecommunications provider  moving into Alaska might  affect her                                                               
business.  She offered her  belief that the national company will                                                               
likely hurt  her major income earned  through representing Alaska                                                               
Communications.   She  said  this bill  would be  a  help to  her                                                               
establish a  new line  of business.   She referred  to statistics                                                               
she received from the U.S.  Small Business Administration [Alaska                                                               
District Office] in  February 2012.  She said that  64 percent of                                                               
net new  jobs come from small  firms and 43 percent  of all high-                                                               
tech  employment is  created by  small businesses.   On  the flip                                                               
side, she  learned from  classes with  the Alaska  Small Business                                                               
Development Center (SBDC) that one  in five new businesses have a                                                               
chance of  surviving as entrepreneurs.   She said, "I'm  going to                                                               
be one  of the ones.   I'm  gonna be it.   I will  be her."   She                                                               
concluded by  stating the more  that the state  partners together                                                               
with  small businesses,  the more  it helps  small businesses  to                                                               
succeed.                                                                                                                        
                                                                                                                                
CHAIR OLSON held public testimony open on HB 32.                                                                                
                                                                                                                                
[HB 32 was held over.]                                                                                                          
                                                                                                                                
3:45:36 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:45 p.m. to 3:49 p.m.                                                                       
                                                                                                                                
         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                                                               
program.                                                                                                                        
                                                                                                                                
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                                                               
project.                                                                                                                        
                                                                                                                                
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                                                               
utilities.                                                                                                                      
                                                                                                                                
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.]                                                                                                          
                                                                                                                                
4:12:56 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
4:12 p.m.                                                                                                                       

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