Legislature(1993 - 1994)
03/16/1993 09:05 AM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
March 16, 1993
9:05 a.m.
MEMBERS PRESENT
Senator Randy Phillips, Chairman
Senator Robin Taylor, Vice Chairman
Senator Rick Halford
Senator Al Adams
Senator Fred Zharoff
MEMBERS ABSENT
None
ALSO PRESENT
Senator Loren Leman
COMMITTEE CALENDAR
SENATE BILL NO. 142
"An Act relating to the Alaska regional economic assistance
program; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 142 - No previous action to record.
WITNESS REGISTER
Senator George Jacko
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Prime Sponsor of SB 142
Chris Gates, Director
Division of Economic Development
Department of Commerce & Economic Development
P.O. Box 110804
Juneau, AK 99811-0804
POSITION STATEMENT: Offered information on SB 142
Dee Thomas
Anchorage Economic Development Council
550 W. 7th Ave., Suite 1130
Anchorage, AK 99501
POSITION STATEMENT: Testified in support of SB 142
Joe Crosson
Anchorage Economic Development Council
550 W. 7th Ave., Suite 1130
Anchorage, AK 99501
POSITION STATEMENT: Testified in support of SB 142
Marideth Sandler
Southwest Municipal Conference
3300 Arctic Blvd., Suite 203
Anchorage, AK 99503
POSITION STATEMENT: Supports SB 142
Carl Berger
Lower Kuskokwim Economic Development Council
Box 219
Bethel, AK 99559
POSITION STATEMENT: Supports SB 142
David Baker
Arctic Development Council
Arctic Slope Region
POSITION STATEMENT: Supports SB 142
Donna Tollman
Copper Valley Economic Development Council
P.O. Box 9
Glennallen, AK 99588
POSITION STATEMENT: Supports SB 142
ACTION NARRATIVE
TAPE 93-14, SIDE A
Number 001
The Senate Community & Regional Affairs Committee was called
to order by Chairman Randy Phillips at 9:05 a.m.
SENATOR RANDY PHILLIPS introduced SB 142 (REGIONAL ECONOMIC
ASSISTANCE GRANTS) as the only order of business.
Number 015
SENATOR GEORGE JACKO, prime sponsor of SB 142, said that the
ARDOR program was established in statute in 1988 and
currently includes 13 ARDORS funded under the Department of
Commerce & Economic Development. He has introduced SB 142
upon request from two ARDOR's in his district.
The current statute provides that each ARDOR receive funding
of not more than $50,000 each year, and that money must be
matched dollar for dollar with non-state funds. SB 142
would increase the amount that each ARDOR could receive from
$50,000 up to $100,000. The bill would also authorize the
department to establish in regulation the amount of local
matching money required based, on the capacity of each ARDOR
to generate funds from non-state sources.
Senator Jacko said current funding for the ARDOR's is
inadequate to ensure the fundamental level of operations.
Raising matching funds is especially difficult for rural
ARDOR's where the private sector is seriously
underdeveloped.
Senator Jacko directed attention to a proposed committee
substitute which will add two additional points to the
legislation. One will exempt board members from liability,
which would prohibit them being sued by people unless there
are acts of gross negligence. The second point will exempt
the ARDOR's from the Procurement Code.
Number 070
CHRIS GATES, Director, Division of Economic Development,
Department of Commerce & Economic Development, said the
funding is a major problem for the ARDOR's. The process of
getting match monies for state and federal grants that are
available is so difficult that there is very little extra
time in which to actually perform economic development
activities.
Mr. Gates said this is a very effective program at the local
level with over 200 local leaders involved. The boards of
directors control what the ARDOR's are focusing on and what
they don't focus on, and they are the ones to decide what
works.
Concluding, Mr. Gates referred to a list of the achievements
of the different ARDOR's, and he said it can be pointed to
as one of the most, if not the most, effective economic
development tools in the State of Alaska.
Number 125
SENATOR LEMAN said he was aware of the successes of the
Anchorage ADOR, and he asked Mr. Gates if he could summarize
some of the successes of some of the other ARDOR's. Mr.
Gates spoke to the accomplishments of the Kenai ARDOR and
the Glennallen ARDOR.
Number 206
SENATOR HALFORD moved that CSSB 142(CRA) be adopted as a
working document. Hearing no objection, the motion carried.
SENATOR HALFORD observed that the legislation increasing an
authorization that is dependent upon the appropriation
level, and that is a decision that will be made by the
Finance Committee.
CHRIS GATES informed the committee that the regulations the
division is planning to implement are going to be on a
sliding scale match with the ARDOR's in the rural areas
having less of a requirement for match than those ARDOR's in
the railbelt area that have more access to match monies.
There would be a three to one match in the rural areas; a
two to one match in unorganized boroughs; and a one to one
match on the second $50,000 to the railbelt ARDOR's.
Number 244
SENATOR TAYLOR noted that Section 1 relates to tort damages,
and he asked if anyone has ever brought suit against any of
the people listed in that section. CHRIS GATES said it
relates to volunteers on boards of directors and volunteer
business owners, but he not aware of an ARDOR ever being
sued.
Number 260
SENATOR RANDY PHILLIPS announced that the committee would
begin taking testimony over the teleconference network.
Number 265
DEE THOMAS, Anchorage Economic Development Council,
testifying from Anchorage, said they have encountered some
difficulties in trying to implement an economic development
project because of the state purchasing regulations. They
support amending the statute so that they can allow ARDOR's
to contract directly with state agencies so that they don't
incur delays and can move forward with the projects.
Number 290
JOE CROSSON, Anchorage Economic Development Council,
testifying from Anchorage, stated their support for the
legislation. Addressing the liability issue, he said they
get very involved with corporations, sometimes to the extent
that they will enter into a development agreement and
contracts. Many times those contracts and development
agreements can be very involved, and with the limited
liability, it will enhance their ability to go forward with
large projects in dealing with large corporations and other
agencies.
Number 315
CARL BERGER, Director of the Lower Kuskokwim Economic
Development Council, which is based in Bethel, testified
from Anchorage. The Council provides services to Bethel and
24 villages on the Lower Kuskokwim and Bering Sea coast.
Mr. Berger stated he was testifying in support of SB 141.
One of the issues that they've had to deal with recently is
the problem of funding for their program. In the past year
or so, since their ARDOR was formed, they've had to use
other funds from other programs in order to support some of
the services they've provided through the ARDOR program.
They received $47,460 from the legislature this year, but it
is not adequate to provide for one person's work, some
travel, and things that need to be accomplished for their
successful delivery of services.
Number 338
MARIDETH SANDLER, Executive Director of the Southwest Alaska
Municipal Conference, testified from Anchorage in support of
the proposed committee substitute. Each of the ARDOR's,
including the Southwest Conference, is a nonprofit. She
said $47,000 does not go real far in terms of trying to
cover salaries, rents and secretarial support. She said
most of the directors have to spend a fair amount of time
fund raising, and it gets immensely frustrating when they
have to spend so much time fund raising rather than doing
programs, which is why they are there in the first place.
Number 400
DAVID BAKER, Corporate Secretary and a director for the
Arctic Development Council, testifying from Anchorage,
stated their support for passage of the legislation. The
primary reason they are in favor of it is because the
smaller ARDOR's, which they feel are very effective, are
having a very difficult time operating on the limited
budgets they have.
Number 435
SENATOR TAYLOR commented that he thought the money was to go
into the project itself, not to go to support people who are
promoting the project. CHRIS GATES clarified that they are
proposing that the cap be raised from $50,000 to $100,000,
and the use of those funds would stay in the same allowed
uses that currently exist. The rural ARDOR's would get the
first $50,0000 as a grant and then they would need only
$16,000 to get the $50,000 from the state under a match
plan. He added that the specific projects are put forward
in a work program defined by the board of directors of the
ARDOR, and that work program is hustled and worked on by the
executive director and the staff. The grant money from the
state helps pay the expenses of that staff and the office to
accomplish their work program.
Number 520
DONNA TOLLMAN, Copper Valley Economic Development Council,
testifying from Glennallen, said they are in an unorganized
borough and they have no corporate funding base from which
to draw matching funds. She said the call for their
services has been tremendous in loan packaging, assisting
small businesses putting together their business plans,
conducting workshops, etc. Their ARDOR has become very
active in helping people through stumbling blocks to opening
businesses.
Number 547
There being no other witnesses wishing to testify on SB 141,
SENATOR RANDY PHILLIPS asked for the pleasure of the
committee. SENATOR HALFORD noted that the legislation
increases the cap without appropriating any money. He
suggested the bill should move to the Finance Committee so
that they can work out the funding portion.
SENATOR TAYLOR moved that CSSB 141 (CRA) be passed out of
committee with individual recommendations. Hearing no
objection, it was so ordered.
There being no further business to come before the
committee, the meeting was adjourned at 9:50 a.m.
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