Legislature(1993 - 1994)
04/08/1993 08:20 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 142
An Act relating to the Alaska regional economic
assistance program; and providing for an effective
date.
Co-chair Pearce directed that SB 142 be brought on for
discussion.
Senator Jacko explained that the Alaska regional economic
assistance program was statutorily established in 1988. It
currently includes 13 ARDORs funded through the Dept. of
Commerce and Economic Development. ARDORs are nonprofit
organizations that provide a link and effective delivery
system between private, state, and federal economic
development resources for local residents and small
businesses.
The bill effects three changes in the law. The current
$50.0 maximum each ARDOR may receive is increased to $100.0.
Present law also requires a dollar-for-dollar match. The
proposed bill provides flexibility in state match
requirements based upon the capability of each organization
to raise matching funds. Under section 3 of the bill,
contracts between state agencies and ARDORS are exempt from
the state procurement process. Language within secs. 1 and
2 limits the civil tort liability of ARDOR board members and
staff.
Senator Jacko explained that current funding for ARDORs,
particularly in rural Alaska, is inadequate to ensure a
necessary level of operation. Hence need for the above-
noted increase from $50.0 to $100.0.
A total of $1.4 million annually will be needed for the 13
designated ARDORs and the new ARDOR being organized in the
Matansuka-Susitna Borough. There is $650.0 in the
Governor's FY 94 operating budget. The $750.0 fiscal note
brings the total to $1.4 million.
Senator Jacko directed attention to a sectional analysis for
the bill as well as accompanying letters of support.
CHRIS GATES, Director, Division of Economic Development,
Dept. of Commerce and Economic Development, and TOM LAWSON,
Business/Regional Development, Division of Economic
Development, Dept. of Commerce and Economic Development,
came before committee. Mr. Gates spoke in support of the
legislation, advising that it would "help local economic
development organizations do their job better in rural and
urban Alaska."
Mr. Gates explained that the 13 existing ARDORs are
functioning well. He noted potential for new organizations
in Mat-Su and the Tanana area near Fairbanks. Approximately
93% of Alaska's population is presently represented by
ARDORs. It is the only "ground-up" based economic
development tool between the state and local entities.
There are in excess of 200, local board members attempting
to create jobs and development within their areas. He
pointed to a listing of projects and jobs and specifically
noted businesses and economic activity in rural communities.
ARDORs are also involved in the schools, teaching basic
business fundamentals to students.
In response to a request from Senator Jacko, Mr. Gates
explained that section 3 of the bill allows the state to
contract with ARDORs "to do specific projects or specific
economic development things within the communities without
going through the normal competitive bidding situations."
He then presented several examples of contractual
arrangements.
Speaking to limited liability provisions, Mr. Gates
explained that they protect volunteer board members from
liability relating to hazards associated with the physical
facility.
Co-chair Frank voiced his belief that ARDORs meet needs in
certain areas but questioned need for an additional
organization in Fairbanks which already has a borough
government, city government, the Fairbanks industrial
development corporation, small business assistance center at
the University of Alaska, etc. He suggested that ARDORs
may well serve rural and regional needs. However, it does
not appear to make sense to establish them within organized
and developed municipalities.
Co-chair Pearce attested to beneficial activities by the
Anchorage ARDOR which markets the international airport and
works with the city and state to bring industry to
Anchorage. Co-chair Frank questioned whether the state
should be funding well organized ARDORs in Anchorage,
Fairbanks, and the Southeast Conference. Mr. Gates voiced
support for the organizations, stressing that the small
amount of state funding is a catalyst for federal grants and
private moneys. The state funds approximately 16% while the
ARDORs garner federal and private moneys totalling 84%. The
Fairbanks ARDOR has provided technical assistance to 472
businesses and nonprofits. Mr. Gates next listed some of
the projects in Fairbanks. Both Co-chair Frank and Senator
Sharp took exception to the claim that the ARDOR had
assisted with the hospital expansion project. Co-chair
Frank noted that the hospital foundation has been active for
thirty years and probably did not need assistance. Senator
Sharp suggested that ARDOR connection to many projects
merely consists of an ARDOR representative on the board. He
questioned whether the ARDOR had actively participated in
economically beneficial aspects of the organizations.
Senator Jacko agreed that some ARDORs are more successful
than others and that some regions of the state probably need
them more than others. He stressed need for ARDOR efforts
in rural areas. Co-chair Frank agreed.
In response to an inquiry from Co-chair Pearce, Mr. Gates
directed attention to language within section 4, requiring
the department to establish a formula that determines the
amount of the required match based upon the capability of
each organization to generate money from nonstate sources.
A sliding scale would allow rural ARDORs easier access to
funding. Urban ARDORs that can more easily generate match
moneys would work on a one-to-one match.
Co-chair Frank expressed a preference for reducing the
$750.0 fiscal note and focusing the program on areas less
capable of raising funds locally.
Discussion followed concerning organization and activities
of the Fairbanks ARDOR. Senator Sharp asked that the
department present a list of projects initiated by ARDORs
and that the list indicate whether the projects are "in a
profit making mode." Mr. Gates advised that Alaska derived
$3.5 million in private and federal economic development as
a result of ARDORs.
End, SFC-93, #55, Side 1
Begin, SFC-93, #55, Side 2
Co-chair Pearce suggested that language at section 4 specify
that the department establish a formula for determining both
the amount of the match as well as the maximum amount for
which each ARDOR could apply. She expressed concern that as
budgets become increasingly tight, $100.0 in funding for all
15 ARDORs will be more difficult to obtain. The Co-chair
further suggested that a $250.0 note be prepared to
accompany the bill, allowing the conference committee to
determine the level of funding during budget deliberations.
Mr. Gates advised that a priority for assisting ARDORs could
be established to meet the foregoing intent. Co-chair
Pearce stressed need to have something on paper to inform
each ARDOR of the amount it is eligible to receive. She
then directed attention to page 2, line 16, and suggested
that the following be added after "determines:"
both the maximum an ARDOR can apply for and
Mr. Gates explained that both the priority for funding and
the match would allow the department to prioritize scarce
resources. He then suggested adding the following at page
2, line 17, following "match:"
both determines the amount of the match required,
and the priority for funding.
Senator Rieger voiced discomfort over addition of the above
new language. He noted that the legislative opinion
regarding priorities may deviate dramatically from that of
the executive branch.
Mr. Gates explained that the department views ARDORs in
terms of three types:
1. Urban (railbelt)
2. Suburban
3. Rural
The 13 existing ARDORs are broken down into those areas.
The program could specifically target suburban and rural
ARDORs. Co-chair Pearce voiced reluctance to preclude
railbelt ARDORs. The department should be able to respond
to ARDORs that help those who are willing to help
themselves.
Discussion followed between Co-chair Pearce and Mr. Gates
concerning the method of distribution of moneys should full
funding not be provided.
Both Senators Rieger and Jacko expressed a preference that
language within section 4 remain as set forth in CSSB 142
(CRA). Senator Jacko said that if the fiscal note is
reduced to $250.0, the program would become more
competitive, and ARDORs would have to bring forth better
proposals. He said he had no problem with that.
Senator Sharp asked if any of the 13 existing ARDORs had
experienced problems coming up with the needed match. Mr.
Gates explained that Bering Straits in Nome has had "quite a
bit of difficulty . . ." He stressed that the private
sector base does not generally exist in rural areas. It is
thus difficult to raise private matches without an economy
to draw from. The department has thus endeavored to allow
in-kind, airline tickets, etc., to serve as part of the
match.
Co-chair Pearce called for additional questions or comments.
None were forthcoming. Co-chair Frank MOVED that the
committee prepare a new fiscal note to accompany the bill,
reducing funding from $750.0 to $250.0. No objection having
been raised, IT WAS SO ORDERED.
Co-chair Pearce called for additional testimony from the
public. None was forthcoming. She then queried members
regarding disposition of the bill. Co-chair Frank MOVED
that CSSB 142 (CRA) pass from committee with individual
recommendations and the $250.0 fiscal note. No objection
having been raised, CSSB 142 (CRA) was REPORTED OUT of
committee with a $250.0 SFC fiscal note for the Dept. of
Commerce and Economic Development. Co-chairs Frank and
Pearce and Senator Jacko signed the committee report with a
"do pass" recommendation. Senators Kelly, Sharp, and Rieger
signed "no recommendation."
TELECONFERENCE
| Document Name | Date/Time | Subjects |
|---|