Legislature(2011 - 2012)HOUSE FINANCE 519

03/01/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

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08:10:51 AM Start
08:10:57 AM Confirmation: Department of Commerce, Community & Economic Development, Commissioner
08:52:43 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Location Change --
Joint with House EDT
+ Confirmation Hearing: TELECONFERENCED
Susan Bell, Commissioner, Dept. of Commerce,
Community,& Economic Development
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, INTERNATIONAL                                                               
                       TRADE AND TOURISM                                                                                      
                         March 1, 2011                                                                                          
                           8:10 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                            
 Representative Cathy Engstrom Munoz, Chair                                                                                     
 Representative Neal Foster, Vice Chair                                                                                         
 Representative Alan Austerman                                                                                                  
 Representative Alan Dick                                                                                                       
 Representative Dan Saddler                                                                                                     
 Representative Sharon Cissna                                                                                                   
HOUSE ECONOMIC DEVELOPMENT, INTERNATIONAL TRADE AND TOURISM                                                                     
 Representative Bob Herron, Chair                                                                                               
 Representative Neal Foster                                                                                                     
 Representative Reggie Joule                                                                                                    
 Representative Cathy Engstrom Munoz                                                                                            
 Representative Steve Thompson                                                                                                  
MEMBERS ABSENT                                                                                                                
HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                            
 Representative Berta Gardner                                                                                                   
HOUSE ECONOMIC DEVELOPMENT, INTERNATIONAL TRADE AND TOURISM                                                                     
 Representative Kurt Olson, Vice Chair                                                                                          
 Representative Wes Keller                                                                                                      
 Representative Berta Gardner                                                                                                   
 Representative Chris Tuck                                                                                                      
COMMITTEE CALENDAR                                                                                                            
CONFIRMATION HEARING(S):                                                                                                        
Department of Commerce, Community & Economic Development, Acting                                                                
     Susan Bell - Juneau                                                                                                        
     - CONFIRMATION(S) ADVANCED                                                                                                 
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
SUSAN BELL, Acting Commissioner                                                                                                 
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:     Speaking   as   the  appointed   Acting                                                             
Commissioner of DCCED, reviewed her background.                                                                                 
ACTION NARRATIVE                                                                                                              
8:10:51 AM                                                                                                                    
CHAIR CATHY ENGSTROM MUNOZ called  the joint meeting of the House                                                             
Community and  Regional Affairs Standing Committee  and the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism  to order  at 8:10  a.m.   Representatives Austerman,                                                               
Foster,  Dick,  Saddler,  Munoz,  Herron,  Thompson,  Joule,  and                                                               
Cissna were present at the call to order.                                                                                       
^Confirmation:   Department  of  Commerce,  Community &  Economic                                                               
Development, Commissioner                                                                                                       
 Confirmation Hearing(s):  Department of Commerce, Community &                                                              
           Economic Development, ACTING COMMISSIONER                                                                        
8:10:57 AM                                                                                                                    
CHAIR MUNOZ  announced that the  only order of business  would be                                                               
the confirmation  hearing of the Susan  Bell, Acting Commissioner                                                               
of the Department of Commerce, Community & Economic Development.                                                                
8:11:10 AM                                                                                                                    
SUSAN   BELL,  Acting   Commissioner,  Department   of  Commerce,                                                               
Community  &  Economic  Development   (DCCED),  speaking  as  the                                                               
appointed Acting  Commissioner of  DCCED, informed  the committee                                                               
that she has  been a Southeast Alaska resident for  a little over                                                               
20  years.   Although she  was  originally from  Nome and  stayed                                                               
there until  she was  six years  old, she mainly  grew up  in the                                                               
Fairbanks  area.    Prior  to  taking  her  current  position  as                                                               
appointed commissioner,  Acting Commissioner  Bell worked  in the                                                               
governor's office.   She  said that  working in  state government                                                               
provided her  the opportunity to  get to know the  department and                                                               
the  issues.   With  a  little over  a  year-and-a-half in  state                                                               
government, Acting Commissioner  Bell said she felt  new to state                                                               
government in many  ways.  Prior to working  in state government,                                                               
Acting Commissioner Bell was a  principal with the McDowell Group                                                               
for  8.5 years.   During  her time  with the  McDowell Group  she                                                               
managed  a wide  array of  projects throughout  the state,  which                                                               
provided  insight into  many  of  the issues  and  people she  is                                                               
working with as acting commissioner.   Prior to her time with the                                                               
McDowell Group,  Acting Commissioner Bell was  the Vice President                                                               
of Goldbelt.   The aforementioned  provided a  unique opportunity                                                               
for   Acting  Commissioner   Bell  to   work  for   a  for-profit                                                               
corporation  with a  unique combination  of  economic and  social                                                               
responsibilities.  Acting Commissioner Bell  related that she was                                                               
also fortunate  to have  a long career  in the  visitor industry,                                                               
which started  when she  was attending  college in  the Interior.                                                               
During her  time working  in the visitor  industry she  worked in                                                               
business  operations,  management,  and marketing  all  of  which                                                               
provided skill sets that are  transferable and applicable to lots                                                               
of businesses.                                                                                                                  
8:14:28 AM                                                                                                                    
REPRESENTATIVE SADDLER  inquired as  to what  Acting Commissioner                                                               
Bell would identify  as the strengths and  weaknesses in Alaska's                                                               
economy.  He further inquired as  to what she would do to address                                                               
ACTING  COMMISSIONER   BELL  opined  that  Alaska   was  somewhat                                                               
insulated  from   the  2008  economic  crash.     While  Alaska's                                                               
unemployment was  higher than normal,  it wasn't  the precipitous                                                               
decreases  in  terms of  employment  or  decline in  the  housing                                                               
market.  In  terms of the recovery of the  nation, it's important                                                               
to  realize  that sometimes  Alaska  doesn't  participate in  the                                                               
pickup.  Therefore, she opined  that it's important for the state                                                               
to think  about Alaska's  competitiveness and  responsiveness and                                                               
position itself  well during  the change.   She  then highlighted                                                               
the  tremendous  challenge  the  state  faces  from  the  federal                                                               
government.   As a  resource state it's  important for  Alaska to                                                               
preserve  the decision-making  authority and  basic functions  of                                                               
the state.   Acting Commissioner Bell further  opined that Alaska                                                               
is well  positioned with great  resources and people to  grow and                                                               
diversify the state's economy.   The aforementioned requires good                                                               
communication and nimble  responses.  She expressed  the need for                                                               
DCCED  to be  as  effective as  possible in  terms  of using  its                                                               
marketing, financing, and business development tools.                                                                           
8:17:03 AM                                                                                                                    
CHAIR HERRON asked  if of the seven questions  he provided Acting                                                               
Commissioner Bell there was one of particular interest.                                                                         
ACTING  COMMISSIONER  BELL answered  that  the  question that  is                                                               
worth  addressing   is  the  relationship  of   the  Division  of                                                               
Community & Regional Affairs (DCRA)  within DCCED.  Approximately                                                               
11  years ago  the Department  of Community  & Regional  Affairs,                                                               
with a  staff of about 200,  was combined with the  Department of                                                               
Commerce  and Economic  Development  [to form  the Department  of                                                               
Commerce, Community & Economic Development].   Although there are                                                               
examples of  why that combination  is working well,  there remain                                                               
areas for  improvement.  She  then highlighted that DCRA  and the                                                               
Division   of  Economic   Development   have  complimentary   and                                                               
interrelated  roles  and  working   toward  the  common  goal  of                                                               
economic  opportunity.   With  DCRA  housed  in DCCED  there  are                                                               
excellent  opportunities for  collaboration.    For example,  the                                                               
Division  of  Economic Development  staff  has  worked with  DCRA                                                               
staff with regard  to grant opportunities or  other resources for                                                               
economic  development projects,  such as  for fish  plants.   She                                                               
provided  other  examples  of the  collaborative  efforts  within                                                               
DCCED.    She  then  highlighted two  projects  with  overarching                                                               
applications throughout  the department:   Village  Resume, which                                                               
is funded by the Denali  Commission as a demonstration project to                                                               
determine  whether  contractors  understand  the  employment  and                                                               
other  resources available  within a  community; Connect  Alaska,                                                               
which is  a broadband project.   Acting Commissioner  Bell opined                                                               
that  it's  beneficial  to have  existing  working  relationships                                                               
within the  department.  Although  she acknowledged  that there's                                                               
the  opportunity  to  grow,  there  is  much  value  in  how  the                                                               
department currently works.                                                                                                     
8:21:46 AM                                                                                                                    
CHAIR HERRON mentioned HB 160,  which addresses tourism marketing                                                               
to encourage people to come to  Alaska and market fish.  However,                                                               
there's a  need to  go beyond  that.   Chair Herron  then related                                                               
that 52 percent  of Canadians believe the Arctic  is important to                                                               
their  identity, whereas  2 percent  of Americans  believe Alaska                                                               
and the Arctic  are important.  Therefore, he inquired  as to how                                                               
to market  Alaska, beyond  tourism and purchasing  fish, to  be a                                                               
better place for country.                                                                                                       
ACTING  COMMISSIONER BELL  began  by relating  that the  question                                                               
speaks to an  area that the department has been  discussing.  She                                                               
then  highlighted the  state's contract  with the  Alaska Seafood                                                               
Marketing  Institute  (ASMI) as  well  as  the smaller  marketing                                                               
programs  of  Made in  Alaska,  Silver  Hand, and  Alaska  Grown.                                                               
Acting Commissioner Bell  concurred with the need for  more of an                                                               
overarching presence  for Alaska.   As the department  enters the                                                               
next budget cycle, it will  review its internal resources as well                                                               
as  the  possibility  of  realigning  some  of  the  department's                                                               
programs.     It's  critical,  she   opined,  to   ensure  people                                                               
understand what the  state has to offer.   Furthermore, the state                                                               
needs to  think more  globally with  regard to  the image  of the                                                               
state  such  that  the  state  is  competitive,  responsive,  and                                                               
proactive  in terms  of positioning  the state  for economic  and                                                               
community  development.     The   department  has   had  internal                                                               
discussions, which she expected would  be more robust in the next                                                               
budget cycle.                                                                                                                   
CHAIR HERRON  recalled that  the governor  has said  HB 160  is a                                                               
priority for him,  which Chair Herron interpreted as  part of the                                                               
overarching  approach  of  painting   a  better  picture  of  the                                                               
importance of Alaska.                                                                                                           
8:25:58 AM                                                                                                                    
REPRESENTATIVE  AUSTERMAN inquired  as  to  how DCCED  interfaces                                                               
with  ADF&G  to develop  underutilized  or  non utilized  fishing                                                               
industry  resources.     He  related  that   approximately  2,500                                                               
permits/applications  for  mainly economic  development  projects                                                               
are languishing in  DNR.  He then inquired as  to how DCCED works                                                               
with  other departments  to  address some  of  the problems  with                                                               
economic development.                                                                                                           
ACTING COMMISSIONER  BELL answered  that there  are a  few formal                                                               
ways in  which DCCED  engages as  commissioners, such  as through                                                               
the various subcabinets  and a group led by  the attorney general                                                               
that focuses  on various projects  across departments.   One such                                                               
project,  worked on  in conjunction  with ADF&G,  DCCED, and  the                                                               
Department of  Law (DOL), focuses  on the Endangered  Species Act                                                               
and the  biological information necessary  as well as  the social                                                               
impacts.  She  related that as DCCED's team  came together, there                                                               
has been a commitment and  leadership from the governor to ensure                                                               
the department works together.   Acting Commissioner Bell relayed                                                               
confidence that DCCED will breakdown  some of the barriers, silos                                                               
to accomplish work.  With regard  to the DNR permits, she related                                                               
that Commissioner Sullivan  is very focused on  that, although it                                                               
will  take staff  resources  and a  culture  change.   Addressing                                                               
issues  across department  lines  will be  more  tangible as  the                                                               
administration proceeds.                                                                                                        
REPRESENTATIVE  AUSTERMAN remarked  that many  of the  fixes, DNR                                                               
permitting in  particular, are  fairly easy.   He  then suggested                                                               
that DNR  could make  some simple  regulation changes  to address                                                               
the five-year  timeframe requirement  for permits.   For example,                                                               
when [Kodiak]  was interested in building  a dock it was  told it                                                               
would take five years to obtain  a lease.  Although [DNR] said it                                                               
could provide  a permit,  the dock  would have  to be  built such                                                               
that  it could  be taken  down in  24 hours.   However,  a simple                                                               
regulation  change could  require a  bond to  take the  dock down                                                               
rather  than the  24-hour requirement.   He  suggested that  such                                                               
changes could be led by commissioners.                                                                                          
8:31:32 AM                                                                                                                    
REPRESENTATIVE  DICK remarked  that  by the  time information  or                                                               
concepts  move  from  the  legislature  to  the  location,  often                                                               
there's  a breakdown.   He  related  that once  the programs  and                                                               
grants reach  the small rural  areas, constituents  complain that                                                               
they  are  competing against  their  own  government.   In  other                                                               
situations, government  actually funds  the very  dysfunction the                                                               
local area is  trying to rid itself of.   Therefore, he expressed                                                               
the need  to have accountability.   Representative  Dick inquired                                                               
as to  whether a [process]  can be developed such  that residents                                                               
in  the area  of a  project  have an  avenue to  speak with  [the                                                               
departments]  regarding implementation  at  the  local level  and                                                               
whether it's working.                                                                                                           
ACTING  COMMISSIONER BELL  mentioned  that Representative  Dick's                                                               
discussions with  herself and  Mr. Ruby  have led  to discussions                                                               
regarding the  department's roles,  particularly in  the Division                                                               
of   Community   &   Regional  Affairs.      The   division   has                                                               
sustainability    measures    and     audits,    which    provide                                                               
accountability.  She  then turned attention to  the importance of                                                               
regional hubs  from which it's  easier to understand  the reality                                                               
of the smaller surrounding communities.                                                                                         
8:35:38 AM                                                                                                                    
REPRESENTATIVE  JOULE highlighted  that since  the Alaska  Native                                                               
Claims  Settlement Act  (ANCSA) Alaska  Native Corporations  have                                                               
grown  to  a  position  from which  they  contribute  heavily  to                                                               
Alaska's economy.   He  then inquired  as to  the future  role of                                                               
DCCED with these corporations.                                                                                                  
ACTING COMMISSIONER  BELL recalled her  prior roles in  which she                                                               
worked  with Goldbelt  Corporation and  the McDowell  Group where                                                               
she   had  the   opportunity  to   engage  with   the  for-profit                                                               
corporations.   She then  informed the  committee that  DCCED has                                                               
increased  its  engagement  with  ANCSA  corporations,  community                                                               
leaders,  and  business  leaders   in  order  to  understand  and                                                               
compliment their needs.  To  a lesser degree, DCCED has increased                                                               
its engagement  with communities.   She pointed out that  many of                                                               
the  ANCSA  corporations  are engaged  in  multiple  disciplines,                                                               
which provides  a diversification that's valuable  to understand.                                                               
Although the  dividends and  employment opportunities  that ANCSA                                                               
corporations  provide  to  their shareholders  are  smaller,  the                                                               
educational    opportunities   they    offer   are    tremendous.                                                               
Personally,  as a  shareholder of  Bering  Strait and  Sitanasuak                                                               
Native Corporations,  she related that  she is proud of  what the                                                               
corporations  are doing.    In terms  of  the department,  Acting                                                               
Commissioner Bell  expressed the  need for  the department  to be                                                               
engaged  at the  regional level  as  well as  the village  level,                                                               
which she characterized as a  key piece of DCCED's strategy going                                                               
8:39:50 AM                                                                                                                    
REPRESENTATIVE  FOSTER  mentioned  his  appreciation  for  Acting                                                               
Commissioner  Bell's diverse  background in  the urban  and rural                                                               
environments and  her work experience  in the private  and public                                                               
sectors  as well  as with  Native corporations.   With  regard to                                                               
engaging  with the  Native corporations,  he recalled  seeing the                                                               
state interface with NANA Corporation and the film industry.                                                                    
ACTING  COMMISSIONER   BELL  informed  the  committee   that  the                                                               
department  has  the  Economic  Advisory  Council,  which  is  an                                                               
informal group  that would function  as a sounding board  for her                                                               
and DCCED's directors.   The council includes a  number of Native                                                               
corporation leaders.  Having sat in  on and reviewing some of the                                                               
transition  team reports,  she recalled  that many  of the  ANCSA                                                               
corporations were part of that.   The ANCSA corporations are part                                                               
of the  fabric of  Alaska's economy and  are valued.   Therefore,                                                               
there's no question  that the ANCSA corporations will  be part of                                                               
the department's engagement going forward.                                                                                      
8:41:46 AM                                                                                                                    
REPRESENTATIVE CISSNA related that  her recent travels have taken                                                               
her to rural  Alaska, where she has viewed the  tribal aspect [of                                                               
rural  Alaska].   She opined  that  it seems  that DCCED  doesn't                                                               
focus on  the tribal part [of  rural Alaska] as it  partners with                                                               
the ANCSA  corporations.  The  tribal health  [organizations] are                                                               
doing  an amazing  job,  she remarked.   Still,  in  many of  the                                                               
communities  she has  visited, she  has observed  that oftentimes                                                               
items are  sent to  rural Alaska  that no one  knows how  to use.                                                               
Furthermore,  oftentimes  the  safe   water  systems  and  energy                                                               
systems aren't working  together and no one knows  how they work.                                                               
Although  she has  come  to understand  that  there are  training                                                               
programs,   they  aren't   [available]   where  she's   traveled.                                                               
Representative Cissna  related that her travels  have illustrated                                                               
the large  amounts of  expenditures in  federal and  state funds,                                                               
which  aren't  coordinated.   Furthermore,  there  are  different                                                               
world views  between Bush and urban  Alaska.  She inquired  as to                                                               
how to address the differing world  views, that is a non economic                                                               
world rather  than a  monetary world.   "We've got  this economic                                                               
thing in places  where people are trying to  subsist, but they've                                                               
got too  many impediments that  are things we sent,"  she pointed                                                               
ACTING COMMISSIONER  BELL said that  while DCRA  doesn't interact                                                               
with  the breadth  of entities  Representative Cissna  mentioned,                                                               
many  of  the  government  services they  provide,  in  terms  of                                                               
technical assistance, training, and  grant administration, are at                                                               
the  tribal  government level.    Therefore,  some of  the  basic                                                               
municipal function occurs  at the tribal government  level.  Some                                                               
of  what  Representative  Cissna  mentioned  DCCED  does  address                                                               
through  the Alaska  Energy Authority  and DEC  addresses through                                                               
the Village  Safe Water program.   She then highlighted  that the                                                               
Rural  Subcabinet  through  last  year made  an  effort  to  take                                                               
commissioners  and  the  attorney  general out  to  a  number  of                                                               
communities in  the state in  order for them to  understand those                                                               
communities across  departments.   In many  instances it  was the                                                               
first time  or the first time  in a while that  commissioners had                                                               
been to those communities.   Acting Commissioner Bell agreed with                                                               
Representative  Cissna that  things can't  be done  in isolation.                                                               
To  that end,  she noted  that  [DCCED] has  worked closely  with                                                               
Commissioner Sullivan, who is completing  a document that relates                                                               
what [the  Rural Subcabinet]  saw and heard  and viewed  in other                                                               
documents.   The  DCCED has  focused  on moving  forward with  an                                                               
action plan.                                                                                                                    
8:49:06 AM                                                                                                                    
REPRESENTATIVE SADDLER  asked if  Acting Commissioner  Bell would                                                               
want  to emulate  the style  or program  of any  of the  previous                                                               
commissioners of DCCED.                                                                                                         
ACTING COMMISSIONER  BELL related  her observation that  the past                                                               
several   DCCED    commissioners   have   had    very   different                                                               
personalities,  strengths,  and energy.    She  related that  she                                                               
strives to work with the  DCCED leadership team regarding finding                                                               
synergies between  the department's community focus  and economic                                                               
development focus in order that  both sides of the department are                                                               
addressed simultaneously  as synergies across the  department are                                                               
8:51:18 AM                                                                                                                    
REPRESENTATIVE AUSTERMAN  noted that he's been  critical of DCCED                                                               
in the  past, particularly with  regard to  economic development.                                                               
However, he  related that he  is pleased with the  appointment of                                                               
Acting  Commissioner Bell  and the  governor's other  appointees.                                                               
He further related that Acting  Commissioner Bell's background in                                                               
rural  Alaska  will bode  well  for  the community  and  regional                                                               
affairs side of the department.   He concluded by thanking Acting                                                               
Commissioner Bell for the work she does.                                                                                        
8:52:01 AM                                                                                                                    
CHAIR  MUNOZ  wished Acting  Commissioner  Bell  success in  this                                                               
role.  She  noted that she has observed  Acting Commissioner Bell                                                               
in various  roles in which  she has always excelled.   Therefore,                                                               
she  opined that  the  state is  fortunate to  have  her in  this                                                               
8:52:43 AM                                                                                                                    
There being no further business  before the committees, the joint                                                               
meeting  of the  House  Community and  Regional Affairs  Standing                                                               
Committee and  House Special  Committee on  Economic Development,                                                               
International Trade and Tourism was adjourned at 8:52 a.m.                                                                      

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