02/23/2018 03:15 PM House LABOR & COMMERCE

             HB 340-REPEAL BIDCO ASSISTANCE PROGRAM                                                                         
                                                                                                                                
3:22:46 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."                                                                                                      
                                                                                                                                
3:23:01 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  explained  that the  proposed  bill  would repeal  the  BIDCO                                                               
assistant program.   He added that  only one BIDCO had  ever been                                                               
licensed in  Alaska, to Alaska Growth  Capital.  He said  most of                                                               
the  loans are  guaranteed by  the United  States Small  Business                                                               
[Administration].                                                                                                               
                                                                                                                                
3:24:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  asked for information  on BIDCO,                                                               
including what the acronym stands for.                                                                                          
                                                                                                                                
COMMISSIONER DESIGNEE NAVARRE deferred to the department.                                                                       
                                                                                                                                
CHAIR  KITO explained  that he  had some  experience with  Alaska                                                               
Growth Capital  in the past  and the goal of  Business Industrial                                                               
Development Corporation (BIDCO) in the  late 1980s or early 1990s                                                               
was to assist businesses to get started.                                                                                        
                                                                                                                                
3:25:58 PM                                                                                                                    
                                                                                                                                
PATRICE   WALSH,  Chief   Examiner,  Division   of  Banking   and                                                               
Securities,   Department  of   Commerce,  Community   &  Economic                                                               
Development  (DCCED), answered  questions  in the  hearing on  HB
.    She described  the  mission  of  BIDCO as  an  assistance                                                               
program for capital for rural  and distressed areas and minority-                                                               
owned  businesses.   She gave  the example  of loans  to aviation                                                               
companies in Nome and Barrow.                                                                                                   
                                                                                                                                
3:27:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  said  she was  looking  at  the                                                               
fiscal note (FN)  and paraphrased from the  analysis [included in                                                               
committee packet]  which reads  as follows  [original punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     "The revisions  to the  Alaska Business  and Industrial                                                                    
     Development Corporation (BIDCO)  Act will eliminate the                                                                    
     annual   examination   requirement   yet   retain   the                                                                    
     division's  authority to  conduct  an examination  when                                                                    
     needed."                                                                                                                   
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked whether the change                                                                        
would fulfill the division's need for oversight.                                                                                
                                                                                                                                
MS.  WALSH answered  in  the  affirmative.   She  added that  the                                                               
division is  required to do  an examination every  twelve months.                                                               
She said the examination usually  takes about two weeks, requires                                                               
around four examiners,  and the process can average  close to $30                                                               
thousand.   She  explained that  having the  requirement to  have                                                               
exams as needed would lead to big savings for the department.                                                                   
                                                                                                                                
REPRESENTATIVE  BIRCH  disclosed that  his  son  is the  CEO  and                                                               
President of Alaska Growth Capital.                                                                                             
                                                                                                                                
3:29:30 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 340 and left it open.                                                                  
                                                                                                                                
CHAIR KITO held over HB 340.