HB 340-REPEAL BIDCO ASSISTANCE PROGRAM    3:18:56 PM CHAIR KITO announced that the first order of business would be HOUSE BILL NO. 340, "An Act repealing the Alaska BIDCO Assistance program and repealing requirements for an annual examination of a BIDCO by the Department of Commerce, Community, and Economic Development." 3:19:20 PM MIKE NAVARRE, Commissioner Designee, Department of Commerce, Community & Economic Development (DCCED), introduced HB 340 on behalf of the House Rules Committee by request of the governor. He stated the proposed bill was an efficiency bill, repealing a number of statutes for a program that has never been funded. He said there is only one BIDCO in Alaska, and the proposed bill would bring the need for examinations from every 18 months to "as needed." 3:20:04 PM REPRESENTATIVE SULLIVAN-LEONARD said she was confused regarding how the BIDCO process works. She said she initially though the proposed bill would be repealing the program altogether. She asked whether it was the assistance program that would be repealed. COMMISSIONER DESIGNEE NAVARRE answered in the affirmative. He said BIDCOs would still exist, but the assistance program had never been funded. REPRESENTATIVE SULLIVAN-LEONARD spoke to the loans for BIDCOs and some of the jobs data that the program created. COMMISSIONER DESIGNEE NAVARRE asked to which documents Representative Sullivan-Leonard referred. 3:22:03 PM PATRICE WALSH, Chief Examiner, Division of Banking and Securities, Department of Commerce, Community & Economic Development (DCCED), answered questions in the hearing on HB 340. She said she did not have the data Representative Sullivan-Leonard was looking at, so could not answer the question. 3:22:51 PM REPRESENTATIVE SULLIVAN-LEONARD said she would follow up with Ms. Walsh at a later date. COMMISSIONER DESIGNEE NAVARRE suggested the question was better directed at Alaska Growth Capital, which facilitates those loans. 3:23:42 PM REPRESENTATIVE WOOL asked for clarification about the different uses of the term "BIDCO". COMMISSIONER DESIGNEE NAVARRE answered the only BIDCO in Alaska is the Alaska Growth Capital. REPRESENTATIVE WOOL asked whether repealing the BIDCO program was the goal of the proposed bill. He asked whether the corporation formed by the BIDCO program would stay intact, but the program would go away. COMMISSIONER DESIGNEE NAVARRE said the regulatory board would remain, but the audit process would be carried out when problems were identified or when the entity is up for renewal. 3:25:50 PM REPRESENTATIVE KNOPP said he understood the program isn't functioning. He asked about the intent of the BIDCOs. COMMISSIONER DESIGNEE NAVARRE deferred to Ms. Walsh. REPRESENTATIVE KNOPP asked whether the state still supports the one BIDCO in the state. 3:27:18 PM CHAIR KITO explained that BIDCOs were a federal construct and Alaska adopted a state construct. He said he thought federal funding coming in can come in through the Small Business Administration and some entities are eligible to be conduits for the federal money coming in. He said the proposed bill would remove the state capitalization as well as the state regulatory requirement for an audit, which would relieve some of the burden on the BIDCO and on the department while allowing the BIDCO to benefit from federal programs. REPRESENTATIVE KNOPP asked whether the program acts as conduit for federal money. CHAIR KITO said he thought it was benefiting Alaska by providing loans from the SBA. 3:28:47 PM MS. WALSH said that all that had been stated was correct. 3:29:01 PM REPRESENTATIVE KNOPP asked whether the state would be retaining oversight authority. COMMISSIONER DESIGNEE NAVARRE answered there are two parts [to the proposal]. He said the first part is licensing, which the department would continue to oversee, and the second part is funding of the BIDCO loan program which would be repealed. He explained BIDCOs are able to facilitate loans to Alaska businesses with federal dollars. 3:30:27 PM REPRESENTATIVE KNOPP asked whether the state was still receiving federal funds for BIDCOs. COMMISSIONER DESIGNEE NAVARRE answered that the one BIDCO can still access federal funds for loans. 3:30:59 PM CHAIR KITO stated public testimony on HB 340 was still open [from the previous bill hearing]. Upon ascertaining that no one was available to testify, he closed public testimony. 3:31:21 PM REPRESENTATIVE BIRCH reiterated that his son is employed at the one BIDCO in the state. REPRESENTATIVE WOOL asked whether the one BIDCO that is funded is an investment company. COMMISSIONER DESIGNEE NAVARRE answered in the affirmative. He added the company assists businesses to access loan programs. REPRESENTATIVE WOOL moved to report HB 340 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, it was so ordered.