Legislature(2025 - 2026)GRUENBERG 120
02/22/2025 01:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB75 | |
| HB30 | |
| HB91 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 30 | TELECONFERENCED | |
| += | HB 75 | TELECONFERENCED | |
| += | HB 91 | TELECONFERENCED | |
| *+ | HB 87 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 30-OFFICE OF ENTREPRENEURSHIP
[Contains discussion of HB 34.]
1:08:16 PM
CHAIR CARRICK announced that the next order of business would be
HOUSE BILL NO. 30, "An Act establishing the office of
entrepreneurship; relating to new businesses in the state;
relating to reports concerning procurements by agencies; and
relating to initial business license fees for new businesses in
the state."
1:10:13 PM
REPRESENTATIVE HOLLAND, as prime sponsor, introduced HB 30. He
said this was something that he has been involved with for
almost 10 years, and in that time, he has been offering programs
across the state to help potential entrepreneurs learn about
opportunities to grow and expand a business. He said that he
wanted to make a brief introduction of the bill and allow some
testimonies that can describe both the bill and the business
start-up climate in Alaska. He explained that "many people
don't realize" that 89 percent of new job creation in the last
10 years have been from businesses less than five years old.
REPRESENTATIVE HOLLAND said that when talking about
entrepreneurship, it does not only involve discussions about
economic development, value, new wealth, and opportunities, but
also the day-to-day creation of jobs that communities need. He
noted that HB 30 works "side by side" with HB 34. He said HB 34
looks at the strategic view of the state's approach to economic
diversification and supporting emerging sectors, whereas HB 30
would look more specifically at entrepreneurs and aims to help
them create businesses and align the state's activities to
support them. He said that this is not an effort to try to
start something new since there is already a strong start-up
culture with limited programs available in the state. He said
what is missing is a cohesive strategy to tie it together. He
said there are many fragmented programs that are valuable and
discussed a few of them. He said HB 30 tries to accelerate what
impact start-ups have in the state. All start-up talks conclude
with one central theme, supporting new emerging economic
sectors. He discussed various economic development strategies
across various Alaska groups and reiterated that emerging
sectors need support. He asked, "Who is taking this action?"
He said that HB 30 would form the Office of Entrepreneurship and
create a structure within the Department of Commerce, Community
& Economic Development (DCCED) to provide a backbone to start-up
efforts. He said that he was open to any committee input and
improvements for the bill.
1:15:43 PM
REPRESENTATIVE HOLLAND said that everybody is struggling to
think about the future economy of Alaska and what it will look
like. The state has been stuck with 15 years of slow economic
growth and there have been jobs lost to out-of-state
opportunities. He opined that the focus should be on in-state
job growth and retaining talent. Alaska needs the
diversification and support of emerging sectors that will create
future jobs in Alaska. He said that this work is not just about
creating new business but supporting sectors that are already
here. He gave an example of a business called beadedstream inc,
which develops temperature sensors for use on Alaska's icy
roads. He said that the devices had additional applications to
dam infrastructure as well. He frequently sees entrepreneurs
solving problems in Alaska that have other global applications
as well. He said both Alaska problems and solutions are global.
REPRESENTATIVE HOLLAND said when looking at emerging sectors it
is important to look at "where the puck is going," and much like
hockey that involves skating to the puck, innovation does the
same thing. He said that HB 30 recognizes that innovation is
the heart and soul of the country's gross domestic product
(GDP). He said that two-thirds of the country's economic
miracle is from innovation. In Alaska, the proposed bill looks
at these emerging sectors and shows how to support them. He
also noted that committee members should have some information
from the Alaska Statewide Comprehensive Economic Development
Strategy, and it paints a picture of existing economic engines
but also where new sectors are emerging. It emphasizes a need
to support entrepreneurship and innovation. He said that the
Office of Entrepreneurship would focus on front-end work for
start-ups. He then discussed accessibility to capital and
support for businesses while they are in their building phase.
1:21:11 PM
REPRESENTATIVE HOLLAND said that the outcomes of this would be
businesses and jobs of the future. He said that start-ups
create roughly 5,000 jobs annually and consist of about 89
percent of net new jobs. He said that business development is
the key to the future and while current economic engines are
vital, he doubts that there will be considerable growth in these
sectors in the future. He welcomed questions from committee
members.
1:22:45 PM
REPRESENTATIVE MCCABE said that he was interested to know
whether HB 30 would support any corporations that form
subsidiaries.
REPRESENTATIVE HOLLAND responded that it is possible that the
Office of Entrepreneurship could provide some limited
assistance, but these types of cases were not typical. He said
there have been recent efforts within entrepreneurship to look
at corporate innovation and corporate entrepreneurship. Some
corporate entities are even creating internal accelerator
programs. He said that it is something he hasn't seen much in
Alaska, but it is a national trend. He emphasized that internal
corporate innovation is as important as external innovation.
REPRESENTATIVE MCCABE said he was specifically thinking of a
trucking company that hauls freight. He said they formed a new
division to haul ore from Manh Choh Kinross Mine to Fairbanks.
He asked if the proposed Office of Entrepreneurship would help
them through the regulatory processes.
REPRESENTATIVE HOLLAND responded that it would be hard for him
to imagine the proposed office being helpful to them. He said
the focus is on new business models. He said that he could
imagine that if there is something unique such as new technology
then it could aid. He clarified that things that could be
adjuncts to the business could utilize entrepreneurial help.
REPRESENTATIVE MCCABE said that what Representative Holland was
describing applies to Black Gold Trucking. He said that the
owner never hauled ore before and outfitted a trucking fleet
specifically for ore hauling purposes. He said it sounds to him
that it would be a perfect fit. He said a determination would
be needed to understand which business entities to support and
which ones the proposed Office of Entrepreneurship would not.
REPRESENTATIVE HOLLAND responded that entrepreneur offices in
his experience don't try to differentiate between whom they
support except for explicit targeting of early-stage new
businesses. Generally, start-ups are in reference to businesses
less than five years old and, given the discussion, Black Gold
Trucking could be a candidate for help.
1:27:16 PM
REPRESENTATIVE HIMSCHOOT asked if Offices of Entrepreneurship
like the one proposed in the bill exist in other states.
REPRESENTATIVE HOLLAND responded that other states have them,
and an upcoming testifier could help explain them. He said that
all states have a function like this. He said that when he
proposed the bill, he was initially surprised at the fiscal note
regarding the cost of standing up the office. He said part of
the reason for the fiscal note is that there is currently no
economic development budget. He said that HB 30 wouldn't just
add people to an office but would recreate an office that was
once created but shut down over time. He said that there is a
broader economic question of whether the state should fund
economic development. He talked about the fiscal note and
potentially amending sections of the bill to address any
concerns.
1:29:01 PM
CHAIR CARRICK recollected that in 2024, during the Thirty-Third
Alaska State Legislative, there may have been efforts to remove
licensing fees for new businesses. She asked for clarification
regarding the proposed licensing fee changes.
REPRESENTATIVE HOLLAND responded that it would be good to have
the department help with this, but the intent was to waive only
the initial licensing fee. He said the current system used for
managing the licensing process doesn't have the existing
functionality to keep track whether it's a new license or a
recreation of one. He said that there are complications with
this. He said that no-cost licensing fees were available during
the COVID-19 pandemic and subsequently there was an uptick in
license applications. He said that he was interested to see
data and understand whether this waiver helped generate new
businesses. He said there may be other ways to support emerging
businesses without changing pre-existing license fees.
CHAIR CARRICK asked what the current fees are for brand new
businesses and whether it could be considered a barrier to start
new businesses.
1:32:22 PM
SYLVAN ROBB, Director, Division of Corporations, Business &
Professional Licensing, Department of Commerce, Community &
Economic Development, responded that the current fee is $50 for
both new and pre-existing businesses. She said that veterans
and sole proprietors over 65 have reduced fees at $25. She said
that 90 percent of license purchases are online, and she could
not say whether cost is a barrier.
1:33:13 PM
REPRESENTATIVE MCCABE said that "farmers are small businesses,"
and the governor has an executive order (EO) to remove
Agriculture from the Department of Natural Resources and form a
separate department. He said part of the reason is to help
farmers grow their business. He asked how HB 30 would be any
different from a separate Department of Agriculture regarding
supporting a small farmer.
REPRESENTATIVE HOLLAND responded that there are significant
differences. He noted that he would expect the proposed
Department of Agriculture to have some business development
resources. He said that he hopes that the proposed Office of
Entrepreneurship would be an important adjunct to the Department
of Agriculture. He said the proposed office and its work would
support Agriculture Technology (AgTech) and other facets of the
farming industry.
REPRESENTATIVE MCCABE commented that he was happy to see support
for the governor's EO because the Department of Agriculture
would conduct business in different sectors.
1:36:07 PM
REPRESENTATIVE VANCE said that the state by statute already has
Alaska Regional Development Organizations (ARDORs). She said
that they do all the things Representative Holland had described
and more. She said the one on the Kenai Peninsula works with
multiple agencies to leverage grants to support business start-
ups. She asked whether this office would do anything that an
ARDOR cannot.
REPRESENTATIVE HOLLAND responded that the state's ARDORs are a
vital part of the economic landscape but have struggled with
both funding and support. He noted that each ARDOR also
completes a comprehensive regional economic development strategy
that rolls into statewide strategy. He said each ARDOR is also
calling for more support for innovation efforts. Speaking about
innovation, he said that the Juneau Economic Development Council
would be sponsoring an upcoming innovation summit in Juneau. He
said there is a lot of support with ARDORs but one would find
out that their efforts are limited. He said HB 30 would bring
together efforts from across the state and support ARDORs. He
noted that one of the key parts of this bill is to align the
purchasing and activities of the state to the work that could be
done by local businesses and start-ups. He said this is an area
in which ARDORs have limited functionality, and the proposed
bill would create opportunities needed by ARDORs.
REPRESENTATIVE VANCE said that she was failing to see how HB 30
would do more, observing that the bill provides only a few lines
of what it would do. She said most of the proposed bill
references an annual report and putting funds towards
procurement. She said that there is already legislation that
dictates that state-affiliated entities need to prioritize
locally sourced procurements. She said municipalities also have
requirements for procurements. She asked whether bolstering
economic development districts may be more efficient than
creating another area of government.
REPRESENTATIVE HOLLAND responded these are valid points, but he
has worked on this and knows that ARDORs need help. He said
that HB 30 would not do everything, but it would be a step in
the right direction. He said he wants to ensure that ARDORs see
the proposed office as something to support their objectives.
He said that the Office of Entrepreneurship would give a
platform to accelerate and build businesses.
1:42:56 PM
REPRESENTATIVE STORY asked whether Representative Holland had
considered making the proposed office part of the Alaska
Industrial Development and Export Authority (AIDEA), which she
said also focused on community development and had some
available resources.
REPRESENTATIVE HOLLAND responded that the original thought was
to make it part of the Office of the Governor. He said the
focus of the proposed Office of Entrepreneurship is to support
the highest level of policy making to understand the impact of
start-ups and emerging sectors. He said that after working on
the bill, it seemed more appropriate to pair the proposed office
with the Department of Commerce, Community & Economic
Development. He said this bill's focus is to align state
activities to support start-ups. He said that looking at other
models in the country, they tend to be more complex, and he was
trying to avoid complexity. He said the idea of moving it into
a separate entity like AIDEA was possible, but he believes that
keeping it closer to executive functions of the state may be
better.
1:45:44 PM
REPRESENTATIVE HIMSCHOOT asked Representative Holland where the
proposed Office of Entrepreneurship would be located.
REPRESENTATIVE HOLLAND responded that he had not given it a lot
of thought. He said it would make a lot of sense to pair it
with other state offices in Juneau, but Anchorage could be a
contender as well due to its economic horsepower. He said that
Fairbanks is also significant when it comes to entrepreneurship
programs. He said there are good reasons to put the office in
different locations.
REPRESENTATIVE HIMSCHOOT commented that when looking at emerging
sectors such as mariculture, marine services, or agriculture,
none of them would be located near Anchorage. She said a lot of
these emerging sectors would be all over the state.
REPRESENTATIVE HOLLAND noted that the emerging sector definition
includes healthcare technology, tourism work, outdoor
recreation, and others as well. He agreed that there is a
strong focus on mariculture in the coastal areas. He spoke
about previous pilot programs across the state and said that at
the end of the day, he hopes the entrepreneurship function would
function statewide.
1:49:15 PM
REPRESENTATIVE MOORE asked if Representative Holland could
estimate a return on investment (ROI) from passing this type of
legislation.
REPRESENTATIVE HOLLAND responded that it is an interesting
question. He said you can look at it by job creation and
analyzing DCCED data. He said if six jobs were created within
the Office of Entrepreneurship and it helps generate 5,000 jobs,
then there would be a ROI. He said a big challenge in the state
is a fiscal environment that creates "jobs with question marks."
He spoke about local economic impact, taxes, and in-state
structures that don't bring job value to the state. He said it
is a layered and tangled question but one could focus on job
creation and potential exports. He said the same dialogue
occurs when funding university systems.
1:51:36 PM
JASON GRILL, Chief Government Affairs Officer, Right to Start,
gave an invited testimony in support of HB 30. He began by
stating that new businesses create almost all net new jobs in
the economy and discussed the benefits. He said that government
processes and other barriers make it more difficult for start-
ups. He said survey data suggest that entrepreneurs feel left
out, and that government supports large businesses over them.
He said that 94 percent of voters across party lines say that it
is important to America's future that citizens can grow
businesses fairly. He iterated that 92 percent of voters said
that starting a business today is difficult. He said that the
proposed bill would expand opportunity for all, and
entrepreneurs deserve to have at least one person available at
the state level to support start-up operations. He said that
this is an impactful first step for enabling Alaska
entrepreneurs.
MR. GRILL said that in recent years Nevada, Missouri, Kansas,
Michigan, Colorado, Utah, and New Mexico have all created a
dedicated, official Office of Entrepreneurship in state
government. He said North Dakota, Washington, West Virgina,
Indiana, Vermont, and Hawaii were all currently looking at
similar legislation.
MR. GRILL said that Colorado recently had a great program, which
dropped new business fees to $1. He said it increased limited
liability company (LLC) filings by over 40 percent. He reported
that 155,000 LLCs were registered in the year that fees were
reduced. He said that the licensing fees, much like Alaska,
were $50. He explained that it costs more to make businesses
overseas. He said the HB 30 would focus on new and young
businesses rather than on small businesses.
MR. GRILL, speaking about staffing for other states Offices of
Entrepreneurship, said that Nevada had two full-time employees,
Missouri had one, and Indiana was looking to go bigger. Given
other states' approach, he felt that three personnel affiliated
with the Office of Entrepreneurship employees would be perfect.
He said that with regards to placement, most states have put an
Office of Entrepreneurship in their Department of Commerce or
Governor's Office.
1:59:22 PM
JARED REYNOLDS, Director, Center for Economic Development,
University of Alaska, said that the Center of Economic
Development is deeply embedded in Alaska's entrepreneurial
climate. He said that it has served multiple entrepreneurs, and
the center's primary focus has been on early-stage ideas. He
said the center works with multiple stakeholders including
ARDORs across the state.
MR. REYNOLDS said that entrepreneurs are essential to Alaska's
Economy and provide services to Alaskans. He said that business
creation, survival, growth, and scalability are all important.
He said that by some metrics, Alaska ranks third in the nation
for the number of individuals who start businesses. He said
that there is significant regional variation and there is
considerably less entrepreneurship in Northern and Western
communities. He remarked that business growth and scalability
is the biggest challenge for Alaska and discussed metrics
pertaining to scalability. He said that many businesses in
Alaska are born out of necessity rather than opportunity and
that there are a lot of key challenges that contribute to
Alaska's entrepreneurial opportunities.
2:04:56 PM
CHAIR CARRICK asked for a comparison between HB 30 and HB 34.
REPRESENTATIVE HOLLAND explained that HB 30 focuses on areas
before the business planning stage and said that Alaska does
this quite well already, especially considering the work of the
Alaska Small Business Development Center. He remarked that
ecosystem building, ideation, business modeling, and strategy
were the areas in which the state was particularly weak. He
said that HB 30 operates at the front end for businesses and
works directly with startups and their founders.
REPRESENTATIVE HOLLAND said that HB 34 and the innovation
council is a "different animal." He said HB 34 is a bill that
seeks to convene folks at a statewide and strategic level to
look at areas of differentiated economic opportunity. It seeks
to bring multiple stakeholders together to determine how
innovation is being guided across that state. He said at a
strategic level it would generate priorities, policies, and
legislative action that would support start-ups. He said the
difference between the two bills could be thought of as HB 30
being like microeconomics whereas HB 34 can be thought of as
macroeconomics.
2:08:20 PM
REPRESENTATIVE VANCE highlighted the section of the bill
pertaining to new state business development and asked how HB 30
would be carried out to ensure that 5 percent of revenue goes
into economic development. She said, for instance, that health
care was one industry of concern. She asked how this bill would
be carried out to address every level at which it impacts.
REPRESENTATIVE HOLLAND said the same questions were asked by
officials with DCCED because HB 30 seemed broad. He said the
model legislation for HB 30 had painfully specific directives
and he felt it was going "too far into the weeds." He offered
the bill from a general perspective and wanted to work on making
things more specific. He said the intent is specifically
looking at creating new opportunities for emerging businesses.
He gave an example of a couple of industries and how HB 30 could
be carried out. He said that he wanted to find a balance that
allows both flexibility and creativity.
REPRESENTATIVE VANCE said that using state agencies as a
definition is very specific because it goes to a committee
level. She said it is time-consuming and challenging to
determine implementation. If he was open to the proposed office
being a department then it may avoid management to a granular
level. She raised concerns regarding practicality.
REPRESENTATIVE HOLLAND said he agreed and welcomed any comments
and solutions.
2:13:18 PM
REPRESENTATIVE MCCABE asked if the totals of the fiscal notes
had been added up.
REPRESENTATIVE HOLLAND said he doesn't have the number off the
top of his head and is open to removing certain parts of the
bill to address the current fiscal note. He said that he
appreciated Mr. Grill's comment that other states' Offices of
Entrepreneurship had staffed three people and the current bill's
proposition of six may be too much. He said that he was not
going to step away from the fact that HB 30 would have a price
tag.
REPRESENTATIVE MCCABE said that he struggles with the idea of
spending almost $2 million on this. He said that the Matanuska-
Susitna Borough has repealed license fees and suggested that
this may be a better approach.
REPRESENTATIVE HOLLAND said that he appreciates the comments
but, in his experience, the lack of spending in this area is the
reason for lack of progress. He reiterated that it addresses
the businesses of the future.
REPRESENTATIVE MCCABE said that the reason there are no small
businesses in Alaska is because Alaska has not followed its
resource development protocols. He said that Alaska has stopped
development of these resources and now the state does not have
the people to support a small business. He said people are not
around with a decent resource job and said it sounds like "a
chicken and egg problem."
REPRESENTATIVE HOLLAND said that it would be good to get the
Alaska Small Business Development Center back in this
discussion. He said over 95 percent of the state economy is
already small businesses. He said that Representative McCabe's
opening clause was that Alaska didn't have small businesses, but
the state has many. He said that HB 30 hopes to accelerate what
is already there.
CHAIR CARRICK announced that HB 30 held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 30 Sponsor Statement.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Ver A.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Sectional Analysis Ver A.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Fiscal Note DOA-OPPM-2-14-25.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Fiscal Note DCCED-CBPL-02-14-25.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Fiscal Note DCCED-OOE-02-15-24.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Presentation 2-22-25.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Backup Emerging Sectors CEDS.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |
| HB 30 Backup Policy Brief Office of Entrepreneurship.pdf |
HSTA 2/22/2025 1:00:00 PM |
HB 30 |