03/17/2022 03:00 PM House STATE AFFAIRS

           HB 271-AIDEA: MEMBERSHIP; RESPONSIBILITIES                                                                       
                                                                                                                                
3:54:57 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS  announced that the final  order of business                                                               
would  be HOUSE  BILL NO.  271, "An  Act relating  to the  Alaska                                                               
Industrial Development  and Export  Authority; and  providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
3:55:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON,  Alaska   State  Legislature,   prime                                                               
sponsor,  introduced   HB  271.    He   paraphrased  the  sponsor                                                               
statement [included in  the committee packet], which  read in its                                                               
entirety as follows [original punctuation provided]:                                                                            
                                                                                                                                
     HB 271  aims to improve upon  the governance structures                                                                    
     of  the   Alaska  Industrial  Development   and  Export                                                                    
     Authority  (AIDEA) and  provides  legal mechanisms  for                                                                    
     additional  transparency and  oversight of  this public                                                                    
     corporation.                                                                                                               
                                                                                                                                
      Currently, AIDEA is under considerable scrutiny from                                                                      
      the public and the media. Concerns have been raised                                                                       
     about the  integrity of decision-making  processes used                                                                    
     by  the authority  and  relating  to personnel  matters                                                                    
     within   the  authority.   These  concerns   have  been                                                                    
     aggravated  by  extensive  use  of  executive  sessions                                                                    
     during AIDEA board  meetings, limited public engagement                                                                    
     on  major development  projects,  a  perceived lack  of                                                                    
     responsiveness   to   public    comments   and   little                                                                    
     transparency in AIDEA's business agreements.                                                                               
                                                                                                                                
     First  established  in  1967,  AIDEA  has  a  long  and                                                                    
     complex history.  Over the years, the  role AIDEA plays                                                                    
     in  the  economy  of  the state  has  shifted  and  its                                                                    
     financing  programs have  expanded markedly.  AS 44.88,                                                                    
     the chapter  of statute  governing the authority,  is a                                                                    
     hodgepodge  of  various   funds,  programs,  and  legal                                                                    
     requirements.  There is  little  in  statute to  ensure                                                                    
     that AIDEA acts in the  best interest of the public and                                                                    
     state  economy  when   financing  projects  and  little                                                                    
     required scrutiny.  HB 271  would address  these issues                                                                    
     by  restructuring the  AIDEA Board  to be  more diverse                                                                    
     and less  susceptible to political  whims of  any given                                                                    
     administration. It  would also create a  uniform set of                                                                    
     processes  for  approval   of  projects  requiring  $10                                                                    
     million in  financing (or more)  and would  require the                                                                    
     authority  to  be  forthright  with  the  public  about                                                                    
     business dealings and contracts.                                                                                           
                                                                                                                                
     Additionally, under  the framework  created by  HB 271,                                                                    
     AIDEA  would  systematically  analyze  the  impacts  of                                                                    
     projects  at all  stages  of  development and  outcomes                                                                    
     after  completion  to  ensure  that AIDEA  is  in  fact                                                                    
     achieving   the  statutory   directives  of   promoting                                                                    
     balanced  growth   of  the  economy,   creating  stable                                                                    
     employment  opportunities in  the state,  and providing                                                                    
     state businesses with  adequate financial and technical                                                                    
     assistance.                                                                                                                
                                                                                                                                
     The   need  for   AIDEA  reform   has  been   discussed                                                                    
     perennially and this reform is  timely. HB 271 provides                                                                    
     the  necessary   framework  for   AIDEA  to   become  a                                                                    
     transparent    and    trusted    development    finance                                                                    
     organization, work                                                                                                         
                                                                                                                                
4:05:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE thanked the bill sponsor for calling                                                                       
attention to this issue of transparency and the Alaska                                                                          
Industrial  Development and  Export Authority  (AIDEA's) tendency                                                               
to call sporadic executive sessions  for lengthy amounts of time.                                                               
She asked  how the  bill would address  that concern  and provide                                                               
better interface with the public.                                                                                               
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   said    Representative   Vance   had                                                               
highlighted   one  issue   in  the   bill  that   needed  further                                                               
development.   He  opined that  there were  times when  executive                                                               
session  makes sense,  such as  litigation; however,  AIDEA {"the                                                               
authority")  was  in  executive  session  "all  the  time."    He                                                               
welcomed a friendly amendment on the matter.                                                                                    
                                                                                                                                
4:07:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  observed that  Section 6 updated  the 15-                                                               
day  requirement for  notice of  proposed action.   He  suggested                                                               
that  notice  should  be  posted on  AIDEA's  website  and  asked                                                               
whether that would be considered a friendly amendment.                                                                          
                                                                                                                                
REPRESENTATIVE JOSEPHSON said, "Definitely."                                                                                    
                                                                                                                                
REPRESENTATIVE EASTMAN  inquired about the legal  implications of                                                               
removing the language "at the  pleasure of the governor" [on page                                                               
1, line 14].                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  that  his  intention was  to                                                               
depoliticize the  provision, which  dealt with  public membership                                                               
of  the authority.   He  added, "The  part that    our  attorneys                                                               
would want to  offer you advice on is less  that concern than the                                                               
confirmation issue."                                                                                                            
                                                                                                                                
REPRESENTATIVE EASTMAN  asked the  bill sponsor  to speak  to the                                                               
"confirmation issue."                                                                                                           
                                                                                                                                
REPRESENTATIVE  JOSEPHSON stated  that  AIDEA was  not a  regular                                                               
government   department;  therefore,   the  governor's   absolute                                                               
appointing authority was in question.                                                                                           
                                                                                                                                
REPRESENTATIVE  EASTMAN  turned  attention to  Section  6,  which                                                               
changed  the allotted  time for  public testimony  from "a  total                                                               
period of at least one hour" to  "not less than two minutes".  He                                                               
asked  whether that  provision had  been abused  by AIDEA  in the                                                               
past.   Additionally,  he asked  whether the  new language  could                                                               
unintentionally limit public testimony.                                                                                         
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recounted  receiving  many  complaints                                                               
from  members  of the  public  regarding  AIDEA's long  executive                                                               
sessions, insufficient  notice, and the inability  to participate                                                               
from 2019-2021.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  EASTMAN   expressed  concern  that   the  written                                                               
responses to public comment may  necessitate a substantial amount                                                               
of additional work for the authority.   He asked whether the bill                                                               
sponsor's  intent  was for  AIDEA  to  send a  general  response.                                                               
Further, he  expressed his hope  that the authority would  not be                                                               
required  to respond  to each  individual comment  if there  were                                                               
thousands.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JOSEPHSON  directed attention  to the  language in                                                               
question on  page 3, line 7,  and acknowledged that it  could use                                                               
some editing.                                                                                                                   
                                                                                                                                
4:16:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE VANCE asked whether  it was customary to delineate                                                               
a time limit on public testimony in statute.                                                                                    
                                                                                                                                
4:17:34 PM                                                                                                                    
                                                                                                                                
ELISE  SORUM-BIRK, Staff,  Representative Andy  Josephson, Alaska                                                               
State Legislature,  pointed out  that the existing  AIDEA statute                                                               
laid out  a one-hour minimum  for public testimony.   In changing                                                               
that language, she  said the bill sponsor's intent  was to ensure                                                               
that every member of the public was heard.                                                                                      
                                                                                                                                
REPRESENTATIVE VANCE  suggested that AIDEA should  be required to                                                               
post  public notice  of the  start time  for public  testimony so                                                               
that members of  the public weren't missing their  chance to call                                                               
in.                                                                                                                             
                                                                                                                                
MS. SORUM-BIRK reiterated that the bill was a starting point.                                                                   
                                                                                                                                
4:20:03 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK introduced  the  PowerPoint presentation,  titled                                                               
"HB 271;  AIDEA Reform and  Transparency" [hard copy  included in                                                               
the committee packet].   She began on slide  2, which highlighted                                                               
media headlines concerning AIDEA.                                                                                               
                                                                                                                                
4:21:10 PM                                                                                                                    
                                                                                                                                
MS.  SORUM-BIRK outlined  a sectional  analysis  of the  proposed                                                               
legislation  on   slide  3,  which  read   as  follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     ? Sections 1  through 3 and 13-  Board confirmation and                                                                  
     composition.                                                                                                               
     ?  Section  4-   Executive  Director  confirmation  and                                                                  
     personnel policies.                                                                                                        
     ? Sections 5 and  6- Processes for adopting regulations                                                                  
     and receiving public input.                                                                                                
     ? Section 7- AIDEA dividend to state.                                                                                    
     ?  Sections 8  and  9- Project  oversight and  approval                                                                  
     processes.                                                                                                                 
     ?  Section  10-  Prioritization of  projects  based  on                                                                  
     furthering existing state policies.                                                                                        
     ?  Section  11-   Development  of  performance  metrics                                                                  
     related to legislative intent.                                                                                             
     ? Section 12 - Public access to AIDEA records.                                                                           
     ? Section 14- Transitional language.                                                                                     
     ? Section 15- Effective date.                                                                                            
                                                                                                                                
4:26:23 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK skipped slides 4-5 and outlined transparency of                                                                  
records and outcomes on slide 6, which read as follows [original                                                                
punctuation provided]:                                                                                                          
                                                                                                                              
     Current Law- AS 44.88.215                                                                                                
     ?  HB   386  (ch   109  SLA   1998)  first   added  the                                                                    
     confidentiality language to statute                                                                                        
          ? This language was further strengthened by HB 90                                                                     
          (ch 71 SLA 2010).                                                                                                     
                                                                                                                                
     ? Per legislative records-  before 1998 loan applicants                                                                    
     had to fill out a waiver.                                                                                                  
                                                                                                                                
     ?  Under  the  Alaska  Public Records  Act  (AS  40.25)                                                                    
     exceptions  already  exist  for  financial  information                                                                    
     required to be kept confidential under federal law.                                                                        
                                                                                                                                
4:28:34 PM                                                                                                                    
                                                                                                                                
MS. SORUM-BIRK skipped slide 7 and proceeded to outline                                                                         
alignment with state policies and legislative intent on slide 8,                                                                
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
     ? State Energy Policy (AS 44.99.115)                                                                                       
     ?  Coordinated  and  comprehensive approach  to  energy                                                                    
     efficiency and conservation                                                                                                
     ?  Economic  development  through development  of  both                                                                    
     renewable and nonrenewable energy resources                                                                                
     ?  Supporting  Applied   Research  to  alternative  and                                                                    
     emerging technologies                                                                                                      
     ? State administrative  centralization and coordination                                                                    
     with federal initiatives                                                                                                   
                                                                                                                                
     ? State Arctic Policy (AS 44.99.105)                                                                                       
     ?  Development with  lens  of  vibrant communities  and                                                                    
     healthy environment                                                                                                        
     ?   Positive  investment   climate  through   strategic                                                                    
     infrastructure                                                                                                             
     ? Safe and secure maritime transport                                                                                       
     ?    Integration   of    Indigenous   knowledge    into                                                                    
     conventional research                                                                                                      
                                                                                                                                
     ? Legislative Intent for Creation of AIDEA                                                                                 
     ? Creation of year-round employment                                                                                        
     ? "Balanced growth of economy"                                                                                             
     ? Business  benefiting through financial  and technical                                                                    
     assistance                                                                                                                 
     ? Supporting/ creating exports                                                                                             
                                                                                                                                
MS  SORUM-BIRK  concluded  on  slide  9,  which  questioned  what                                                               
Alaskans and the legislature wanted AIDEA  to be, whether it be a                                                               
development  finance  organization,  a   state  funded  bank,  an                                                               
economic  development authority  for  the state,  an investor  in                                                               
extraction industries, or a driver for green energy.                                                                            
                                                                                                                                
4:31:40 PM                                                                                                                    
                                                                                                                                
CHAIR KREISS-TOMKINS announced that the bill was held over.