Legislature(2009 - 2010)BARNES 124

02/09/2010 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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08:07:29 AM Start
08:07:58 AM Presentation by Deputy Commissioner Curtis Thayer, Department of Commerce, Community, & Economic Development
09:11:02 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Curtis Thayer, Deputy Commissioner, DCCED TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                        February 9, 2010                                                                                        
                           8:07 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bob Herron, Co-Chair                                                                                             
Representative Cathy Engstrom Munoz, Co-Chair                                                                                   
Representative John Harris                                                                                                      
Representative Wes Keller                                                                                                       
Representative Charisse Millett                                                                                                 
Representative Sharon Cissna                                                                                                    
Representative Berta Gardner                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION BY DEPUTY COMMISSIONER CURTIS THAYER~ DEPARTMENT OF                                                                
COMMERCE, COMMUNITY, & ECONOMIC DEVELOPMENT                                                                                     
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CURTIS THAYER, Deputy Commissioner                                                                                              
Department of Commerce, Community, & Economic Development                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a presentation of DCCED.                                                                        
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:07:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  BOB  HERRON called  the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:07  a.m.                                                               
Representatives Munoz,  Herron, Cissna,  Keller, and  Harris were                                                               
present  at  the call  to  order.   Representatives  Millett  and                                                               
Gardner arrived as the meeting was in progress.                                                                                 
                                                                                                                                
^Presentation  by Deputy  Commissioner Curtis  Thayer, Department                                                               
of Commerce, Community, & Economic Development                                                                                  
 Presentation by Deputy Commissioner Curtis Thayer, Department of                                                           
          Commerce, Community, & Economic Development                                                                       
                                                                                                                              
8:07:58 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON announced  that the only order  of business would                                                               
be a  presentation by the  new deputy commissioner  of Department                                                               
of Commerce, Community, & Economic Development (DCCED).                                                                         
                                                                                                                                
8:09:10 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON related  to the committee that  Curtis Thayer has                                                               
been a leader in economic  and business development for more than                                                               
15 years.   Mr. Thayer was born in Anchorage,  grew up in Alaska,                                                               
and graduated  from the University  of Alaska Fairbanks.   He has                                                               
extensive  experience in  energy  development, including  working                                                               
for Enstar.  Mr. Thayer has  also spent many years in Washington,                                                               
D.C., working  for the Committee  on Resources in the  U.S. House                                                               
of  Representatives for  U.S. Congressman  Don  Young.   Co-Chair                                                               
Herron reviewed the various organizations  of which Mr. Thayer is                                                               
a  member, including  the Resource  Development  Council and  the                                                               
Alliance.    In  conclusion,  Co-Chair Herron  related  that  Mr.                                                               
Thayer is a Top 40 Under 40 award winner.                                                                                       
                                                                                                                                
CO-CHAIR HERRON then inquired as  to why Mr. Thayer is interested                                                               
in this job at this particular time.                                                                                            
                                                                                                                                
8:10:28 AM                                                                                                                    
                                                                                                                                
CURTIS  THAYER,  Deputy  Commissioner,  Department  of  Commerce,                                                               
Community,  &  Economic  Development,  in  response  to  Co-Chair                                                               
Herron, pointed out  that it's a unique time in  Alaska, which he                                                               
characterized as  a crossroads.   He further  offered that  he is                                                               
interest in this  position at this time because  the commerce and                                                               
economic development piece of DCCED  has been missing for several                                                               
years.  He  noted that he had a conversation  about that with the                                                               
governor's office  and then was  asked if he would  be interested                                                               
in taking a role, which seemed to be a good challenge.                                                                          
                                                                                                                                
MR. THAYER then paraphrased from  the following written statement                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
        Thank you Representative Herron & Munoz and the                                                                         
        Community & Regional Affairs Committee.  It is a                                                                        
     pleasure  to be  here  today to  share  our vision  for                                                                    
     economic development in Alaska.                                                                                            
                                                                                                                                
     Governor Parnell and his  administration are working to                                                                    
     change  the  direction  of   state  government  and  to                                                                    
     position Alaska for economic growth.   He believes that                                                                    
     the  best thing  government can  do is  foster economic                                                                    
     development, is to  know when to lend a  hand, and know                                                                    
     when to simply get out of the way.                                                                                         
                                                                                                                                
     I  share his  belief that  the best  way to  accomplish                                                                    
     this is  for state  government to work  toward creating                                                                    
     an  environment  that  is conducive  to  private-sector                                                                  
     investment  and sustainability.   The  state plays  its                                                                    
     most critical  role in laying the  economic foundations                                                                  
     for such an environment by:                                                                                                
                                                                                                                                
        · Enhancing transportation systems                                                                                      
        · Improving workforce development and training at                                                                       
          all levels                                                                                                            
        · Developing Alaska's energy and other resources                                                                        
        · Removing barriers that inhibit opportunity and                                                                        
          growth.                                                                                                               
                                                                                                                                
     In  the Office  of Economic  Development, we  know that                                                                    
     jobs are a fundamental part  of the quality of life for                                                                    
     Alaska families.   We also  know that to  be successful                                                                    
     in  bringing jobs  to Alaskans,  the state  must create                                                                    
     the conditions that make economic  growth possible.  We                                                                    
     do  this  by  reaching  out  to  all  stakeholders  and                                                                    
     letting the private sector do what it does best.                                                                           
                                                                                                                                
     With  the assistance  of the  Legislature, and  through                                                                    
     meaningful  public-private  partnerships, we  can  work                                                                    
     together toward the common goal  of a prosperous future                                                                    
     for   ourselves,  for   our  children,   and  for   our                                                                    
     grandchildren.                                                                                                             
                                                                                                                                
     As deputy  commissioner of the Department  of Commerce,                                                                    
     Community, &  Economic Development, I have  been tasked                                                                    
     with,  among other  duties,  overseeing  the Office  of                                                                    
     Economic   Development.      With   my   private-sector                                                                    
     background and  understanding of the business  world, I                                                                    
     am committed  to fostering the  kind of  robust public-                                                                    
     private  partnership  that  will lead  to  growing  and                                                                    
     diversifying our economy.                                                                                                  
                                                                                                                                
     Already,  we  have compiled  a  list  of more  than  70                                                                    
     potential  projects,  large  and small  that  can  help                                                                    
     build the foundation for future  growth that will bring                                                                    
     sustainable jobs  and provide  a boost to  our economy.                                                                    
     Some of  these are smaller scale  projects that involve                                                                    
     tweaking an  existing program or  adding a  new element                                                                    
     that will help us toward realizing larger goals.                                                                           
        · Integration       and        streamlining       of                                                                    
          regulatory/permitting processes;                                                                                      
        · Formalization of a corporate calling program;                                                                         
        · Bringing all [economic development] ED-related                                                                        
          loan and grant programs under one authority to                                                                        
          help bring attention to them and facilitate their                                                                     
          use;                                                                                                                  
        · Establishment of a small business development                                                                         
          program                                                                                                               
        · Expansion of tourism marketing credit program;                                                                        
        · Bringing more attention to Alaska Grown/Made in                                                                       
          Alaska programs;                                                                                                      
        · Hiring   a   business   outreach   specialist   to                                                                    
          interface with [Alaska  Industrial Development and                                                                    
          Export  Authority] AIDEA  and  the private  sector                                                                    
          and help government work at  the speed of business                                                                    
          whenever possible.                                                                                                    
                                                                                                                                
     These items  are but a  few of the ways  we're breaking                                                                    
     down silos  and looking  for interagency  synergies and                                                                    
     efficiencies.  They will  help us aggressively reassert                                                                    
     the  state's  role   in  creating  a  business-friendly                                                                    
     climate  conducive to  private-sector investment.   The                                                                    
     governor has gotten the ball  rolling by proposing $100                                                                    
     million per  year for  the next  five years  to address                                                                    
     deferred  maintenance  needs on  infrastructure  around                                                                    
     the state.   In addition  to the immediate shot  in the                                                                    
     arm to the  construction industry, these infrastructure                                                                    
     improvements  can  pave  the  way  toward  responsible,                                                                    
     sustainable development that has  the capacity to raise                                                                    
     real income  and improve  the quality  of life  for all                                                                    
     Alaskans.                                                                                                                  
                                                                                                                                
     Economic development  is neither  a destination,  nor a                                                                    
     checklist  of activities.   It  is  an ongoing  process                                                                    
     requiring  constant adjustment  and quick  responses in                                                                    
     an environment that  is never static.  To  help us keep                                                                    
     pace, we  are in  the process of  hiring a  manager for                                                                    
     the  Office of  Economic Development  and have  several                                                                    
     dynamic candidates  willing to  take on  this position.                                                                    
     The  new  manager  will be  tasked  with  working  more                                                                    
     closely  with AIDEA  to  promote,  develop and  advance                                                                    
     economic  growth and  diversification, especially  with                                                                    
     AIDEA's capacity to provide  various means of financing                                                                    
     and investment.                                                                                                            
                                                                                                                                
     Business and  community leaders can  expect to  see and                                                                    
     hear  more  from  AIDEA  -  particularly  the  two  new                                                                    
     development  officers who  are tasked  with identifying                                                                    
     opportunities   and  strategizing   on  financing   and                                                                    
     technical resources  within and  outside of AIDEA.   We                                                                    
     are   excited  about   the  synergies   here  and   the                                                                    
     opportunities they will bring.                                                                                             
                                                                                                                                
     In a  free market economy,  the government does  not do                                                                    
     the  planning.    Citizens should  be  able  to  create                                                                    
     economic wealth and experience a  high quality of life.                                                                    
     But   the  state   can,  and   should,  be   an  active                                                                  
     participant in  the creation of a  long-term vision and                                                                  
     economic framework.   To that  end we are  also excited                                                                    
     to be doing  what we can to advance  the Alaska Forward                                                                    
     project, a comprehensive  economic development strategy                                                                    
     for   the  state   being  undertaken   by  the   Alaska                                                                    
     Partnership for Economic Development.                                                                                      
                                                                                                                                
     This  is important  as we  strive for  self-sufficiency                                                                    
     and a significant  reduction in imports to  Alaska.  In                                                                    
     turn,  this reduces  the leakage  of  money outside  of                                                                    
     Alaska.  This is a  critical piece of the puzzle, since                                                                    
     the state's  current economic model allows  more wealth                                                                    
     to leave the state than remains here.                                                                                      
                                                                                                                                
     We have great  potential in this state.   No one doubts                                                                    
     this.  But we must plan  to maximize our potential.  We                                                                    
     must plan  to succeed.  And  we must invest in  our own                                                                    
     success.   But we must  do it with a  guiding principle                                                                    
     in mind:   When Alaska  money is spent, it  must create                                                                    
     opportunity for Alaskans.                                                                                                  
                                                                                                                                
     Alaska had a great and  prosperous run for its first 50                                                                    
     years.   Despite our  current challenges,  Gov. Parnell                                                                    
     believes we  can make  the next  50 years  even better.                                                                    
     And with  your help,  we WILL do  better.   Because the                                                                    
     challenges  we  face  today breed  the  opportunity  of                                                                    
     tomorrow.                                                                                                                  
                                                                                                                                
MR.  THAYER then  noted that  the committee  should have  a chart                                                               
relating  the organization  of the  department and  another chart                                                               
that  reviews the  various aspects  of the  Division of  Economic                                                               
Development.                                                                                                                    
                                                                                                                                
8:16:38 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON recalled an earlier  conversation with Mr. Thayer                                                               
in  which Mr.  Thayer  told him  that he  was  approached by  the                                                               
commissioner and the  governor regarding this position.   He then                                                               
inquired as  to Mr. Thayer's  personal mission statement  for the                                                               
position of deputy commissioner of DCCED.                                                                                       
                                                                                                                                
MR. THAYER expressed hope to  have better alignment and direction                                                               
with  the  Office  of  Economic Development  (OED)  and  move  it                                                               
forward.  He related his  understanding that OED staff hasn't had                                                               
guidance  from   [the  department   heads]  or   the  legislature                                                               
regarding what to  do.  Mr. Thayer said that  he wants to advance                                                               
OED  to do  something meaningful  and something  that produces  a                                                               
strong work  product.   In further  response to  Co-Chair Herron,                                                               
Mr. Thayer  said that OED  has good  employees.  He  informed the                                                               
committee  that OED  has  a budget  of $3.3  million  of which  a                                                               
little  over $300,000  is in  general  funds.   The division  was                                                               
tasked with  the film office  and has one employee  for forestry,                                                               
one employee  for fisheries, and  three employees for  tourism to                                                               
make economic development in the  state work.  The aforementioned                                                               
is a huge  task, particularly when one considers  that fishing is                                                               
the  state's second  largest industry  and only  one employee  is                                                               
dedicated  to it  in  OED.   However,  the  film  office has  two                                                               
employees.     Mr.   Thayer  pointed   out  that   both  of   the                                                               
aforementioned  are  legislatively  driven.   The  aforementioned                                                               
situation means  that OED has  to work with other  departments to                                                               
find synergies  to promote economic  development.  He  noted that                                                               
[the department]  won't ask for  more funds or  employees because                                                               
it wants to determine what it  can do with the existing resources                                                               
and the best ideas from its employees.                                                                                          
                                                                                                                                
8:20:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MUNOZ inquired  as  to  the top  priorities  of the  70                                                               
projects.   She further  inquired as to  which of  the priorities                                                               
can be implemented fairly quickly.                                                                                              
                                                                                                                                
MR.  THAYER  said that  projects  that  were  on the  shelf  were                                                               
assembled.  He  explained that he wanted to share  that list with                                                               
the  administration   and  the   legislature  to   determine  the                                                               
priorities.   These projects range  from billion  dollar projects                                                               
to  small  projects.   He  noted  that  the department  has  loan                                                               
programs  that  have   been  on  the  books   for  years  without                                                               
legislative  funding.   Therefore, there  needs to  be review  of                                                               
those loan  programs to determine  if those loan  programs remain                                                               
necessary  and if  so,  to seek  funds for  those  programs.   In                                                               
further response  to Co-Chair Munoz,  Mr. Thayer said  he intends                                                               
to  compile   a  list  of   projects  to  share  with   both  the                                                               
administration  and the  legislature in  order to  determine what                                                               
can be  accomplished.  The  OED needs a business/action  plan for                                                               
the  next  few years  as  well  as  tools measuring  whether  the                                                               
division is succeeding.                                                                                                         
                                                                                                                                
8:22:28 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  recalled her travels throughout  the state                                                               
where she  has discovered communities trying  to perform economic                                                               
development  with  the  available   resources.    However,  these                                                               
communities  aren't able  to obtain  the  investment and  bonding                                                               
that's imperative  to provide heat, electricity,  and obtain fuel                                                               
let  alone build  wealth.   She  opined that  the more  important                                                               
piece   to   her  is   the   sustainable   aspect  [of   economic                                                               
development], which  would provide a  decent quality of  life for                                                               
future  generations.   She  noted that  she  most recently  heard                                                               
Representative   Austerman   discuss  the   aforementioned,   and                                                               
therefore she  asked if Mr. Thayer  had approached Representative                                                               
Austerman.                                                                                                                      
                                                                                                                                
MR.  THAYER  confirmed that  he  has  spoken with  Representative                                                               
Austerman.  In  fact, the earlier mentioned  board charts include                                                               
a  position   for  a   business  development   specialist,  which                                                               
Representative Austerman  identified as an important  position to                                                               
have  in  OED.    Mr.  Thayer informed  the  committee  that  the                                                               
governor's  office was  approached  regarding this  need and  the                                                               
position has  been filled.   There have been  other conversations                                                               
with the governor's office and  the commissioner regarding how to                                                               
restructure OED.   He noted that  much of what was  in the report                                                               
[provided  by Representative  Austerman] is  being reviewed.   He                                                               
further noted that the economic  development models used in other                                                               
states don't exactly fit Alaska,  although pieces of those models                                                               
can be utilized in Alaska.                                                                                                      
                                                                                                                                
8:25:15 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON pointed out Mr.  Thayer has direct oversight over                                                               
four  divisions  and  OED.    He then  asked  if  Mr.  Thayer  is                                                               
performing triage  on OED.   He further  asked if the  other four                                                               
divisions need attention at the same level as OED.                                                                              
                                                                                                                                
MR. THAYER  responded that  OED needs the  most work  because the                                                               
division  lacks a  manager.   The  process to  fill this  manager                                                               
position is occurring.  With  regard to the other four divisions,                                                               
Mr. Thayer related his belief  that three divisions are operating                                                               
very  well.    However,  he  is  working  with  the  Division  of                                                               
Corporations,  which  takes  14-16  weeks  to  process  corporate                                                               
licenses  and  biannual reports.    In  order to  better  promote                                                               
economic development, the division  is working toward achieving a                                                               
two-week  turn around  for processing  paperwork.   He attributed                                                               
the lengthy  processing time to  an employee shortage as  well as                                                               
an outdated computer system that will be replaced.                                                                              
                                                                                                                                
8:27:10 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HARRIS  reviewed the  history of DCCED,  which was                                                               
formed by merging the Department  of Community & Regional Affairs                                                               
and  the Department  of Commerce.   He  recalled that  when DCCED                                                               
came to  fruition there was  concern that rural Alaska,  both its                                                               
social and economic  interests, would be forgotten.   Is that the                                                               
case, he asked.                                                                                                                 
                                                                                                                                
MR. THAYER, drawing from his experience  in the short time he has                                                               
been with the  department, opined that there is  a great emphasis                                                               
on the community  and regional affairs aspect  of the department.                                                               
The  weak link  has been  OED.   The regulatory  agencies of  the                                                               
Division of Banking & Securities,  the Division of Insurance, and                                                               
the Division of Investments have  managed to do very well through                                                               
the   changes  of   the  department.     However,   the  economic                                                               
development  aspect  of the  department  has  fallen short.    He                                                               
pointed  out  that  the  general   fund  dedicates  $300,000  for                                                               
economic  development.   Therefore,  Mr. Thayer  opined that  the                                                               
community and regional affairs mission has been successful.                                                                     
                                                                                                                                
8:30:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HARRIS inquired  as  to what  DCCED  is doing  to                                                               
facilitate relations with rural Alaska.                                                                                         
                                                                                                                                
MR.  THAYER  answered  that  he   has  focused  on  the  economic                                                               
development   aspect  of   DCCED  because   Mike  Black,   Deputy                                                               
Commissioner,  DCCED,  focuses  on  the  community  and  regional                                                               
affairs aspect of the department.                                                                                               
                                                                                                                                
REPRESENTATIVE HARRIS expressed concern  that most of the natural                                                               
resources in  Alaska are  located in rural  Alaska while  most of                                                               
the jobs  in the state  are located in  urban Alaska.   He opined                                                               
that it's easy to take for  granted those who have to live around                                                               
resource  development, such  as mining,  timber, or  oil and  gas                                                               
exploration.   However, those  living in  these rural  areas have                                                               
needs  and concerns  as well.   Therefore,  Representative Harris                                                               
emphasized that  he wants  to ensure  that DCCED  doesn't neglect                                                               
those needs.  He surmised that  DCCED will play an important role                                                               
in the Pebble Mine, which  is the largest display of nonrenewable                                                               
resource in the state situated  by the state's largest display of                                                               
a renewable  resource.  He  asked if  Mr. Thayer can  ensure that                                                               
those living near these resources won't be taken for granted.                                                                   
                                                                                                                                
MR. THAYER replied yes.                                                                                                         
                                                                                                                                
8:33:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  highlighted the  out migration  from rural                                                               
Alaska and  the high cost  of energy in  rural Alaska.   She then                                                               
pointed out  that often the  [upheaval] in rural  communities can                                                               
be seen  in health issues, such  as suicide and violence.   Since                                                               
the  state obtains  its resources  from rural  Alaska, the  state                                                               
could learn  a great  deal from  those in  rural Alaska  who have                                                               
been successful in terms of sustainability.                                                                                     
                                                                                                                                
8:35:37 AM                                                                                                                    
                                                                                                                                
MR.  THAYER, in  response  to Representative  Gardner, agreed  to                                                               
provide a copy of his notes to the committee.                                                                                   
                                                                                                                                
8:36:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT  inquired  as  to  the  direction  Alaska                                                               
Travel  Industry Association  (ATIA) is  heading and  whether the                                                               
legislature can help.                                                                                                           
                                                                                                                                
MR.  THAYER related  that DCCED  is  in the  process of  renewing                                                               
ATIA's grant  application.   He noted  that he  has met  with Ron                                                               
Peck, President  & Chief Operating  Officer, ATIA,  regarding how                                                               
ATIA  and  DCCED  can  work  together.    He  then  informed  the                                                               
committee of  the recently formed trade  association, Alaska Act,                                                               
with  the cruise  ships  in  which the  suggestion  was made  for                                                               
Alaska to participate in Sea Trade,  a trade show, in Miami.  For                                                               
the first time, ASMI, Alaska  Act, and ATIA are all participating                                                               
in a Sea  Trade.  The aforementioned is one  example of the state                                                               
projecting a united voice rather than a segmented voice.                                                                        
                                                                                                                                
8:38:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT recalled  that  the state  had a  healthy                                                               
marketing  program in  the past,  and expressed  hope that  DCCED                                                               
would continue  conversations regarding  how the  legislature can                                                               
help with  tourism.  She then  turned to the film  office and the                                                               
tax  credits  that  will  be  utilized in  this  industry.    She                                                               
inquired as to how the tax credits will be utilized in Alaska.                                                                  
                                                                                                                                
MR. THAYER  related that the  film office has been  successful in                                                               
getting companies  interested in  Alaska and  prequalifying them.                                                               
However,  the film  office needs  to focus  on getting  people to                                                               
actually purchase  those credits.   There  is $15-$16  million in                                                               
potential film  credits yet there  was less than $100,000  out in                                                               
the  market.   Therefore,  the  film  office  is working  on  its                                                               
marketing  plan for  selling film  credits in  Alaska.   The film                                                               
office  is  utilizing  the  program  Reel  Scout,  which  can  be                                                               
utilized to identify film locations.   Mr. Thayer opined that the                                                               
film office  is looking  very good, although  some work  needs to                                                               
continue.                                                                                                                       
                                                                                                                                
8:41:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT   related  that   when  she   spoke  with                                                               
producers  at  CSG, they  didn't  know  Alaska had  tax  credits.                                                               
Therefore, she inquired as to how  the film office is getting the                                                               
message out to the industry that Alaska has tax credits.                                                                        
                                                                                                                                
MR.  THAYER  reminded the  committee  that  of the  $3.3  million                                                               
overall budget for economic development,  the film office is only                                                               
one  recipient.   Therefore, it's  a matter  of priorities.   The                                                               
film  office  is  participating  in a  meeting  in  Los  Angeles,                                                               
California, during which it will have  a booth to help market the                                                               
tax credits.   He suggested  that perhaps the  [department] could                                                               
work  with  ATIA  and  ASMI  to  utilize  synergies  between  the                                                               
organizations to market Alaska.                                                                                                 
                                                                                                                                
8:43:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HARRIS  asked if  Mr.  Thayer  has convinced  the                                                               
governor to attend the cruise ship conference in Miami, Florida.                                                                
                                                                                                                                
MR. THAYER  related that conversations  have been  held regarding                                                               
what the  governor and the state  can do in promoting  tourism in                                                               
Alaska.                                                                                                                         
                                                                                                                                
8:44:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HARRIS recalled that  some legislators visited the                                                               
Alaska Aerospace Launch facility in  Kodiak.  Kodiak, he related,                                                               
is concerned about the economic  viability of that project due to                                                               
the possible  loss of military contracts.   He asked if  DCCED is                                                               
working   with   the   aforementioned   facility,   the   federal                                                               
government, and others to reinstate those contracts.                                                                            
                                                                                                                                
MR. THAYER answered  yes and no.  He informed  the committee that                                                               
the commissioner has a position on  the board, but noted that he,                                                               
himself,  hadn't yet  met with  the Alaska  Aerospace Development                                                               
Corporation.                                                                                                                    
                                                                                                                                
8:46:18 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON requested  that Mr. Thayer discuss  the Office of                                                               
International Trade.                                                                                                            
                                                                                                                                
MR. THAYER  related that  the Office  of International  Trade was                                                               
brought up by Representative Austerman  and is in discussion with                                                               
the governor.   At one  point, the Office of  International Trade                                                               
was in within  the Department of Commerce and later  moved to the                                                               
Office  of the  Governor.   He  noted that  he has  met with  the                                                               
Office of International Trade because it  has to be brought in on                                                               
anything  with  international  aspects.    Therefore,  there  are                                                               
ongoing  conversations  regarding  the  role  of  the  Office  of                                                               
International Trade and where it will be located.                                                                               
                                                                                                                                
8:47:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  recalled that Alaska lost  its independent                                                               
traveler when  the state outsourced  its marketing,  although the                                                               
state gained  [more tourists]  via cruise  ships.   She indicated                                                               
the  need to  develop travel  within the  state over  the state's                                                               
various modes of  transportation in order to  capture both cruise                                                               
ship tourists and independent tourists.                                                                                         
                                                                                                                                
MR. THAYER  pointed out  that the aforementioned  is part  of the                                                               
action  items for  the tourism  staff within  OED.   He suggested                                                               
reviewing where and  how much the various  tourism entities, such                                                               
as the Alaska Railroad Corporation  and the Alaska Marine Highway                                                               
System, are  spending on  marketing in  order to  review possible                                                               
synergies with the state's marketing dollars.                                                                                   
                                                                                                                                
8:49:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CISSNA    mentioned   that   there    are   huge                                                               
possibilities with  regard to eco tourism  and historical tourism                                                               
in Alaska.                                                                                                                      
                                                                                                                                
8:50:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HERRON   surmised  that  Mr.  Thayer   will  be  making                                                               
significant  suggestions to  the  governor  and the  legislature,                                                               
which will cause changes in  regulations.  Therefore, he inquired                                                               
as to  how he views  the department's changes and  strategies and                                                               
the responsibilities  within the  regulation review process.   He                                                               
specifically inquired as to how  Mr. Thayer foresaw the things he                                                               
wants to do that don't require a statutory change.                                                                              
                                                                                                                                
MR.  THAYER  said  the  aforementioned  is  part  of  the  review                                                               
process.  At this point, he  stated that he's trying to determine                                                               
where  the various  parts of  state government  rest and  what is                                                               
necessary  to make  changes.   Determining  what changes  require                                                               
regulatory  or  statutory  changes  is  part  of  the  evaluation                                                               
process,  which,  upon completion,  will  be  brought before  the                                                               
legislature.  He  noted that although nothing  will occur between                                                               
now  and  the  end  of  session, the  hope  is  to  have  further                                                               
discussions this summer and fall regarding how to align things.                                                                 
                                                                                                                                
CO-CHAIR HERRON  expressed concern  that with  regulation review,                                                               
the cart often precedes the horse                                                                                               
                                                                                                                                
8:51:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER   encouraged  Mr.   Thayer  to   view  the                                                               
regulation review  process as a  tool.   He then returned  to the                                                               
discussion regarding the Office  of International Development and                                                               
asked if  the department  sends a  representative to  the Pacific                                                               
NorthWest Economic (PNWER) meetings.   If not, he suggested doing                                                               
so because it would be a valuable relationship.                                                                                 
                                                                                                                                
MR.  THAYER noted  that  OED has  worked  with PNWER,  especially                                                               
regarding the Olympics and related activities.                                                                                  
                                                                                                                                
8:53:34 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  inquired as  to how Mr.  Thayer would  see DCCED                                                               
staff for which he is responsible being deployed in the state.                                                                  
                                                                                                                                
MR.  THAYER  informed the  committee  that  the director  of  the                                                               
Division of  Banking & Securities  is now in  Anchorage, although                                                               
the  position  was  once  based  in  Juneau.    The  Division  of                                                               
Corporations  is  based  in  Juneau  and  of  the  division's  82                                                               
employees 60  employees are based  in Juneau.   The staff  of the                                                               
Division of Insurance  is split between Juneau &  Anchorage.  All                                                               
but  four staff  of the  Division  of Investments  is located  in                                                               
Juneau.  The staff of OED  is located in the following four areas                                                               
of  the  state:   five  in  Juneau,  five  in Anchorage,  two  in                                                               
Fairbanks, and  a person in Tok.   He said that  he will continue                                                               
to review the  deployment patterns of the  department and whether                                                               
staff is deployed in the best location.                                                                                         
                                                                                                                                
8:55:19 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  inquired as  to what the  staff level  should be                                                               
given the challenges the department faces.                                                                                      
                                                                                                                                
MR. THAYER responded  that at this point the  staffing levels are                                                               
adequate, but the  analysis will continue to  determine whether a                                                               
shift in  staff levels  is necessary.   He  noted that  the [OED]                                                               
received  approval to  hire a  business  outreach individual  for                                                               
which it's  in the process  of reviewing.   He then  reminded the                                                               
committee  that OED's  manager position  is open.   Beyond  that,                                                               
there is normal staff turnover in the other divisions.                                                                          
                                                                                                                                
8:56:06 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ expressed  concern that the $50 head  tax has been                                                               
devastating  to small  businesses across  the board.   Therefore,                                                               
she encouraged  the administration to  continue to work  with the                                                               
industry to reach  a compromise that could be  brought forward to                                                               
the legislature.                                                                                                                
                                                                                                                                
8:57:10 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HERRON asked  if Mr.  Thayer believes  the support  the                                                               
Alaska  Regional Development  Organizations  (ARDORs) receive  is                                                               
adequate.                                                                                                                       
                                                                                                                                
MR.  THAYER  said  that  he  will  be  meeting  with  the  ARDORs                                                               
tomorrow, after  which he will likely  have a better answer.   At                                                               
this point,  Mr. Thayer  opined that what  the ARDORs  provide is                                                               
very important, but he didn't want  to say much more until he has                                                               
met with them.                                                                                                                  
                                                                                                                                
8:58:25 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  mentioned that private sector  evaluation of its                                                               
employees is helpful.   He then inquired as to  Mr. Thayer's view                                                               
of performance audits in which employees audit their bosses.                                                                    
                                                                                                                                
MR.  THAYER   answered  that  in   the  private  sector   he  has                                                               
participated in performance audits,  which he agreed was helpful.                                                               
Such performance audits  are helpful for the  supervisor to learn                                                               
where  he/she  can  improve.   However,  performance  audits  may                                                               
result in a supervisor being  held accountable for something that                                                               
the supervisor is enforcing per directives from his/her boss.                                                                   
                                                                                                                                
9:00:02 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  asked if any  of the models reviewed  from other                                                               
states in the December meeting peaked his interest.                                                                             
                                                                                                                                
MR.  THAYER  informed  the   committee  that  Alaska's  financial                                                               
disclosure requirements would likely  result in those best suited                                                               
for  the positions  [not  to  apply].   He  further informed  the                                                               
committee  that  the  Alaska   Forward  Initiative  has  received                                                               
$500,000  from  the  Denali  Commission   and  the  governor  has                                                               
$100,000 set aside  to advance the initiative's work  in the next                                                               
fiscal year.   The  Alaska Forward Initiative  is seeking  to put                                                               
together an  overall team/counsel to help  guide industry cluster                                                               
groups.  He related his  desire for the Alaska Forward Initiative                                                               
to move forward on the  aforementioned rather that the department                                                               
duplicating the efforts of the Alaska Forward Initiative.                                                                       
                                                                                                                                
9:01:33 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  related his understanding  that a  draft project                                                               
would be delivered to Mr. Thayer at the end of the month.                                                                       
                                                                                                                                
MR. THAYER specified that he hasn't seen the draft project yet.                                                                 
                                                                                                                                
9:01:58 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON asked  if the AIDEA needs new powers  or tools to                                                               
support economic development.                                                                                                   
                                                                                                                                
MR. THAYER  deferred to Ted  Leonard, Executive  Director, AIDEA,                                                               
regarding  the  review  and   reorganization  process  AIDEA  has                                                               
undertaken.                                                                                                                     
                                                                                                                                
9:02:49 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON  commented that Governor  Parnell is  running for                                                               
re-election  and   his  chances   for  election   are  excellent.                                                               
Therefore, he  questioned how Mr.  Thayer saw himself  being able                                                               
to help the governor in the short-term as well as the long-term.                                                                
                                                                                                                                
MR.  THAYER said  he hasn't  had those  conversations.   He added                                                               
that economic  development is  not a partisan  issue and  thus it                                                               
shouldn't  matter who  is governor  or not  governor because  the                                                               
goal  is to  move Alaska  forward.   He said  that moving  Alaska                                                               
forward is his mission.                                                                                                         
                                                                                                                                
9:03:21 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON inquired as to  the state's largest challenges in                                                               
terms of economic development.                                                                                                  
                                                                                                                                
MR. THAYER identified the state's  largest challenges as the cost                                                               
and availability  of energy.   At the  very least,  stable energy                                                               
prices are necessary for the state's entire economy, he opined.                                                                 
                                                                                                                                
9:04:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  inquired as  to Mr.  Thayer's view  on the                                                               
development of renewable energy sources.                                                                                        
                                                                                                                                
MR.  THAYER   answered  that  where   renewable  energy   can  be                                                               
developed, it should  be developed.  Kodiak is a  good example as                                                               
it has moved  toward renewable energy.   Renewable energy options                                                               
as well  as a  gasline need to  be reviewed.   He related  to the                                                               
committee that the  second week he was in this  position, a third                                                               
party came  forward to construct  gas storage tankage in  the new                                                               
port  in Anchorage  that would  serve the  airport, the  military                                                               
base, and be a staging base  for fuel being sent to rural Alaska.                                                               
These opportunities  have to  be reviewed  and fostered  until it                                                               
reaches a point at which private industry can take it over.                                                                     
                                                                                                                                
9:05:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA acknowledged that  Alaska has reviewed what                                                               
others have  done in various  industries, which can be  useful in                                                               
industries such  as with the oil  and gas industry.   However, in                                                               
areas/industries  in which  Alaska is  in the  frontier, such  as                                                               
renewable  energy, looking  to others  may not  make sense.   For                                                               
renewable energy, Anchorage  could become a staging  area for oil                                                               
and  gas  to be  delivered  to  rural  Alaska to  maintain  rural                                                               
Alaska's dependence on  oil and gas.  Or, [the  state] could help                                                               
rural  Alaska develop  the resources  in the  area such  that the                                                               
rural areas  could become independent  as well as  wealthy, which                                                               
helps the  rest of the state  as well.  The  aforementioned isn't                                                               
the direction the state has taken  in the past, rather Alaska has                                                               
looked to outside entrepreneurs  to develop the state's resources                                                               
and  take  them   out  of  the  state.     Representative  Cissna                                                               
emphasized the need to consider  Alaska first in all the economic                                                               
development choices before the state.                                                                                           
                                                                                                                                
MR. THAYER  noted that Mr.  Haagenson, Alaska  Energy Association                                                               
(AEA),  should  have  a report  forthcoming  regarding  renewable                                                               
energy  resources and  the transition  from traditional  fuels to                                                               
renewable energy.                                                                                                               
                                                                                                                                
9:08:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR MUNOZ announced that she  and Co-Chair Herron would like                                                               
to continue  this dialogue with  Mr. Thayer.  She  requested that                                                               
Mr.   Thayer   notify   her   and   Co-Chair   Herron   regarding                                                               
opportunities in which the committee  could help with the list of                                                               
priorities.                                                                                                                     
                                                                                                                                
MR. THAYER expressed hope that the  list of 70 projects will grow                                                               
upon review  of the possibilities  and priorities.  He  agreed to                                                               
share the list with the committee.                                                                                              
                                                                                                                                
9:09:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER echoed  Co-Chair  Munoz's sentiments  with                                                               
regard to encouraging  Mr. Thayer to develop  a relationship with                                                               
all the committee members.                                                                                                      
                                                                                                                                
9:09:37 AM                                                                                                                    
                                                                                                                                
MR. THAYER thanked  the committee for its  engagement and offered                                                               
to  share  information  with  it.    In  conclusion,  Mr.  Thayer                                                               
reminded  the  committee  that economic  development  is  a  long                                                               
journey  not  a  destination  and it  requires  [the  department,                                                               
legislature, and governor] working together.                                                                                    
                                                                                                                                
9:11:02 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:11 a.m.                                                                                                          

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