Legislature(2025 - 2026)BARNES 124
03/17/2025 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB30 | |
| HB75 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 132 | TELECONFERENCED | |
| + | HB 30 | TELECONFERENCED | |
| += | HB 75 | TELECONFERENCED | |
| *+ | HB 38 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 121 | TELECONFERENCED | |
HB 30-OFFICE OF ENTREPRENEURSHIP
3:15:52 PM
CO-CHAIR FIELDS announced that the first order of business would
be HOUSE BILL NO. 30, "An Act establishing the office of
entrepreneurship; relating to new businesses in the state; and
relating to reports concerning procurements by agencies."
[Before the committee was CSHB 30(STA).]
3:16:14 PM
The committee took an at-ease from 3:16 p.m. to 3:17 p.m.
3:17:42 PM
CAMERON EBERSOLD, Staff, Representative Ky Holland, on behalf of
Representative Holland, prime sponsor, gave a PowerPoint
presentation on HB 30 [hard copy included in committee file],
titled "House Bill 30: Office of Entrepreneurship." He began on
slide 2, an overview of Alaska's economic outlook, which read as
follows [original punctuation provided]:
Slow economic growth
Job loss in key industries
Talent and family outmigration
We cannot rely on out legacy sectors to create the
jobs of the future
MR. EBERSOLD moved to slide 3, titled "Alaska needs to diversify
and support emerging sectors," which read as follows [original
punctuation provided]:
Future growth will come
from value-added support
of existing economic
engines and investment in
emerging sectors and jobs
Diversification and
technology growth aligns
with our CEDS, state and
national economic
development trends, and
history
MR. EBERSOLD highlighted the statistics related to emerging
sectors, displayed on slide 4, which read as follows [original
punctuation provided]:
New and young businesses create virtually all net job
growth in America
Research shows that for every 1 percent increase in
the U.S. entrepreneurship rate, the poverty rate
decreases by 2 percent
New businesses
• grow local GDP
• increase community wealth
• create homegrown jobs
• diversify goods and services
MR. EBERSOLD moved to slide 5 and cited Alaska: State of
Entrepreneurship by The University of Alaska Center for
Economic Development (2018). Slide 5 read as follows
[original punctuation provided]:
"Over the last decade, startups in Alaska consistently
added 4,000 to 6,000 jobs to the economy each year.
Firms that are aged five years or younger accounted
for 89% of Alaska's net employment growth in the
private sector."
MR. EBERSOLD moved to slide 6, an overview of HB 30, which
read as follows [original punctuation provided]:
Creates Office of Entrepreneurship in DCCED and
directs them to:
? Promote entrepreneurship
? Assist new business as they navigate interactions
with the state of Alaska
? Annually review policy changes that impact new
businesses
Directs state agency money to support programs or
organizations that help new
businesses
3:21:30 PM
MR. EBERSOLD moved to slide 7, an overview of the changes made
to HB 30 in the previous committee of referral, which read as
follows [original punctuation provided]:
The Committee Substitute for House State Affairs
yielded these changes:
1. Eliminated change from v. A that would have changed
Department of Administration's procurement report from
biennial to annual
2. Removed business license exemption for new
businesses
3. Clarified the goals of the Office of
Entrepreneurship with more specific language
4. Tightened definition of "new business in the state"
using preexisting statutory definition of Alaska
Bidder Preference
MR. EBERSOLD moved to slide 8, drawing committee members'
attention to a flow chart representative of the startup process
and highlighting how HB 30 would help the process: Ecosystem
Building, Ideation, Business Modelling, Business Strategy,
Business Planning, Startup Financing, Execution, and Business
Exits. He provided an anecdote about starting a laundromat,
asserting that a unique or never-done-before business idea could
be categorized as investable, but not bankable. He stated that
the proposed Office of Entrepreneurship would focus on the first
four steps of the startup process, thus creating connectivity in
the startup ecosystem.
MR. EBERSOLD moved to slide 9, an overview of expected outcomes
of HB 30, which read as follows [original punctuation provided]:
NEW BUSINESSES AND JOBS
REDUCED COSTS FOR NEW BUSINESSES
IMPROVE STATE INTEGRATION WITH STARTUP ECOSYSTEM
ECONOMIC OPPORTUNITY FOR THE NEXT GENERATION OF
ALASKANS
CO-CHAIR FIELDS stated the committee would hear from invited
testifiers.
3:26:55 PM
BRITTENY CIONI-HAYWOOD, representing self, began her invited
testimony by stating that she is an economist and had taught
economics at several universities. Additionally, she stated
that she had formerly served as the director of the Division of
Economic Development (DED) from March 2015 to December 2018.
She explained that DED was split into three sections while she
was director: the revolving loan fund, now currently the
Division of Investments; a small group of staff that worked on
economic development projects; and a third group of staff
members that "facilitated that visitor industry and tourism
work." She reported that staff members from were laid off due
to budgetary constraints. She further explained that the
funding for travel and tourism was funneled into the Alaska
Travel Industry Association (ATIA).
MS. CIONI-HAYWOOD explained that the Division of Investments
provides support for the fishing industry and facilitates loan
programs, such as microloan, mariculture, and small business
development. She highlighted some of DED's accomplishments
during her tenure, including the development of the first
Statewide Comprehensive Economic Development Strategy (CEDS),
which allowed the Economic Development Administration (EDA) to
dispense more grants to Alaska. Additionally, she reported that
DED worked to facilitate the Alaska Regional Development
Organization (ARDOR) program. She listed many organizations
that DED has worked with, including University of Alaska
[Anchorage] (UAA) Business Enterprise [Institute] (BEI), Juneau
Economic Development Council (JEDC), Spruce Roots, Alaska
Industrial Development and Export Authority (AIDEA), the Alaska
Chamber, and the Alaska Department of Labor & Workforce
Development (DLWD). She stated that DED conducted research for
various economic organizations around Alaska.
MS. CIONI-HAYWOOD stated that as director of DED, there was a
philosophy of "growing our own." She asserted that businesses
in Alaska face many challenges and that startups are
particularly vulnerable. She offered her belief that it is
important to have an entity that facilitates and spearheads the
work to support economic development. She suggested that the
proposed Office of Entrepreneurship could pick up pieces that
are no longer happening, that were happening under DED, with
some changes. She concluded by emphasizing the importance of
"growing our own," remarking that businesses in Alaska face
unique challenges.
3:31:48 PM
REPRESENTATIVE CARRICK asked about the funds redirected to
tourism marketing through ATIA.
MS. CIONI-HAYWOOD explained that tourism industry funding has
historically swung between state funding and private funding.
She further explained that when she became the director of DED,
the funding had come from DED, and during her time, the funds
were shifted to ATIA.
REPRESENTATIVE CARRICK asked for clarification that the funds
were not "taken away"; rather, the funds were shifted around.
MS. CIONI-HAYWOOD stated that is correct and noted that funds
have resided between a state entity or an outside entity.
3:33:16 PM
MS. CIONI-HAYWOOD, in response to a question from Representative
Saddler, confirmed that she was testifying as a private citizen,
on her own time. She explained that she is a State of Alaska
employee currently on approved leave.
3:33:41 PM
JARED REYNOLDS, Director, Center for Economic Development (CED),
University of Alaska Anchorage (UAA), began his invited
testimony by stating that he had facilitated a range of
startups. He said CED was embedded in Alaska's entrepreneurial
system in three major ways. First, he explained that CED
provides direct entrepreneurial support through programs such as
Upstart Alpha, which supports emerging businesses by clarifying
business models, refining marketing strategies, and mapping out
steps for launching and scaling a business. He highlighted
CED's goal of supporting "early-stage companies" in determining
feasibility of ideas and connecting startups to resources.
MR. REYNOLDS explained that CED works closely with
municipalities and local economic development organizations,
such as ARDORs. He stated that CED conducts research spanning a
range of topics, including opportunities within targeted
industries and the State of Entrepreneurship report, which
highlights strengths and weaknesses of the current
entrepreneurial landscape. He shared some statistics from the
report, emphasizing three areas: business creation, business
survival, and scalability and growth of businesses in Alaska.
He reported that one-third of businesses in Alaska are less than
5 years old, and over half of businesses in Alaska are less than
10 years old. He reported that "nearly every job in Alaska is
created by a business that is less than 5 years old." He
additionally asserted that Alaska is successful at reaching a
wide range of entrepreneurs, reporting that young people and
women start businesses at a rate that is higher than the
national average. However, he noted that Alaska struggled with
business growth and scalability. He reported that Alaska falls
behind significantly with regards to small business innovation
research (SBIR) and small business technology transfer (STTR)
funding, which helps with the commercialization of scalable
businesses. He additionally reported that nationally, Alaska
ranked forty-ninth in high-growth density and forty-fourth in
share of supported scalable businesses. He offered his hope
that the Office of Entrepreneurship could address these poor
statistics.
MR. REYNOLDS stated that many Alaska businesses are born out of
necessity, not opportunity. He acknowledged that while
businesses born out of necessity fill important community needs,
scalable businesses "are essential for creating high-quality
jobs, increasing income in driving innovation, and developing
new industries." He concluded that Alaska has many programs and
organizations that support entrepreneurs and stated that he saw
an opportunity [with CSHB 30(STA)] to create a "robust
entrepreneurial pipeline that will support entrepreneurs at each
stage of their development and create a vibrant and more robust
Alaskan economy."
3:38:50 PM
REPRESENTATIVE SADDLER questioned what states have similar
metrics to Alaska.
3:39:09 PM
MR. REYNOLDS responded that Alaska is unique in its remoteness,
and it is expensive to run a scalable business with exports. He
noted that Alaska is similar to Hawai'i and other rural-based
states in that regard. He asserted that Alaska is pretty unique
with the challenges it faces and the areas in which it finds
success.
3:40:19 PM
REPRESENTATIVE SADDLER stated that the Department of Commerce,
Community, and Economic Development (DCCED) provides economic
development opportunities for the state. He offered his belief
that the proposed Office of Entrepreneurship under HB 30
replicates DCEED's functions. He queried the justification for
HB 30, asking where Alaska Statute (AS) falls behind.
3:40:48 PM
MR. REYNOLDS stated that economic development organizations in
Alaska are always seeking additional resources, support, and
connections. Additionally, he reported that these organizations
desire to bring programs to their regions to support local
entrepreneurs. He also spoke to leveraging university research
to support commercialization.
3:41:52 PM
MR. REYNOLDS, in response to a follow-up question from
Representative Saddler, replied that entrepreneurs in Alaska
struggle with connections, access to diverse capital, and
navigating the startup process. He reiterated that Alaska
typically ranks forty-ninth or fiftieth nationally as recipients
of SBIR and STTR funding.
3:43:32 PM
REPRESENTATIVE COULOMBE questioned the purpose of the annual
report cited on page 3, line 23 of the proposed legislation.
She asserted that the legislature should know how legislation
would impact businesses. Additionally, she asserted that the
Alaska Chamber typically reports to the legislature how proposed
legislation might affect businesses.
3:44:28 PM
REPRESENTATIVE KY HOLLAND, Alaska State Legislature, as prime
sponsor of HB 30, stated that the focus of the report would be
the impact on new businesses and "to what degree ... legislation
is helping create new business opportunities." He provided
anecdotes about people outside of Alaska doing work that he
suggested could be accomplished by Alaska residents.
3:45:58 PM
REPRESENTATIVE HOLLAND, in response to a question from
Representative Coulombe regarding fiscal notes, replied that
there are two new fiscal notes. He stated his expectation that
the proposed legislation would cost money. He reminded the
committee that the legislature had appropriated zero dollars for
the DCCED line item in previous years. He explained that the
largest change in the fiscal note was due to "the impact of
getting rid of the business license fee," reinstating
approximately $2 million of previously forgone revenue.
Additionally, he noted that in the previous committee of
referral, there was clarification made to the duties and scope
of the Office of Entrepreneurship, which allowed for the
elimination of three positions in the proposed legislation,
which significantly decreased the fiscal note. He explained
that the Office of Entrepreneurship was not meant to replicate
existing organizations as a "startup support center"; rather,
the intent was to look more strategically at connecting startups
with state programs. He also noted that he would have liked to
see an annual report on the purchasing activity of the State of
Alaska annually, but that was changed to every two years to
align with the existing two-year cycle of purchasing reports.
3:48:32 PM
CO-CHAIR FIELDS suggested that the proposed report should say
"may" instead of "shall".
3:48:46 PM
REPRESENTATIVE HOLLAND clarified that the current report is a
longstanding report on purchasing activity by request of the
legislature. He explained that CSHB 30(STA) took the existing
purchasing report in AS and added a couple new elements.
CO-CHAIR FIELDS thanked the bill sponsor for his clarification.
3:49:27 PM
REPRESENTATIVE HOLLAND, in response to a question from
Representative Saddler on the difference between the duties of
the proposed Office of Entrepreneurship and DCCED, offered
agreement that the broad scope was already outlined under
statute. He stated that CSHB 30(STA) would bring "specificity
and focus" to the startup system and new businesses, noting that
new businesses create 89 percent of "net new job creation,"
creating approximately 5,000 jobs a year. He asserted that
DCCED takes care of business licensing and corporate
transactions. He drew committee members to goal two and goal
three of CEDS, which spoke to economic and entrepreneurial
diversification, and stated that the Office of Entrepreneurship
would put these goals into action.
3:52:00 PM
REPRESENTATIVE SADDLER questioned the need to prepare reports on
past legislation and suggested that BASIS already served this
function. He referred to page 3 of HB 30.
3:52:32 PM
REPRESENTATIVE HOLLAND directed committee members' attention to
line 24 of the proposed legislation and asserted that BASIS
provides a lot of "raw data" but does not analyze the impacts of
legislation, to what degree it supports, hinders, or otherwise
affects new businesses.
[HB 30 was heard and held.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2. HB30vB-SponsorStatement-HL&C.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 3. HB30vB-Sectional-HL&C.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 4. HB30vB-ExplanationofChanges-HL&C.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 6. HB30vB-Presentation-HL&C.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 7. Emerging Sectors-CEDS.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 8. Sections from CEDS.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| Final 2022-2027 Alaska Statewide CEDS.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| HB030CS(STA)-DCCED-CBPL-03-14-25.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| I.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| 5. HB30-Letters-Testimony Updated 3.17.2025.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |
| HB030CS(STA)-DCCED-OOE-03-14-25.pdf |
HL&C 3/17/2025 3:15:00 PM |
HB 30 |