Legislature(2025 - 2026)ADAMS 519
04/24/2025 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB30 | |
| HB34 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 34 | TELECONFERENCED | |
| + | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 24, 2025
2:42 p.m.
2:42:21 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 2:42 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
Representative DeLena Johnson
Representative Jamie Allard
Representative Andy Josephson, Co-Chair
ALSO PRESENT
Representative Ky Holland, Sponsor; Hannah Lager,
Administrative Services Director, Department of Commerce,
Community and Economic Development; Corbin Morrison, Staff,
Representative Ky Holland.
PRESENT VIA TELECONFERENCE
Jared Reynolds, Executive Director, Center for Economic
Development, University of Alaska, Anchorage.
SUMMARY
HB 30 OFFICE OF ENTREPRENEURSHIP
HB 30 was HEARD and HELD in committee for further
consideration.
HB 34 AK INNOVATION COUNCIL
HB 34 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda. He suggested
moving to committee questions on HB 30.
HOUSE BILL NO. 30
"An Act establishing the office of entrepreneurship;
relating to new businesses in the state; relating to
reports concerning procurements by agencies; and
relating to initial business license fees for new
businesses in the state."
2:44:04 PM
Representative Galvin understood that there was a request
for three new positions for the Alaska Office of
Entrepreneurship. She observed that other states had
similar entrepreneurship programs but generally only
staffed one or two positions. She asked why the bill
requested three positions rather than one or two.
REPRESENTATIVE KY HOLLAND, SPONSOR, responded that the
staffing had undergone changes during the bill's
development. He noted that a past version of the bill
included six staff positions identified as necessary by the
Department of Commerce, Community, and Economic Development
(DCCED). He stated that after working with the department,
taking feedback, and examining the scope of the proposal in
comparison to similar offices in other states, the number
had been reduced to three positions.
Representative Holland clarified that the bill itself did
not specify the staffing level or structure because the
bill was focused on policy. He suggested that
representatives from the department could provide further
detail on the assessment of the workload and staffing
needs. He relayed that most other states already had
stronger economic and business development functions in
place and their entrepreneurship offices were built on
existing structures. In contrast, Alaska's programs had
previously been scaled back which left the state in a
rebuilding phase. He explained that the three positions
represented a foundational step to restore capacity rather
than simply adding onto a fully developed structure. He
reiterated that the department could provide more details.
2:46:54 PM
HANNAH LAGER, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, agreed
with Representative Holland's description. She explained
that the work in Alaska was being built from the ground up.
Representative Galvin understood that the work was still in
the design phase. She noted that one of the positions had
been specified as a research analyst and asked what the
scope of the position was.
Ms. Lager responded that the research analyst would
primarily focus on the reporting requirements in the bill.
She clarified that analyzing the impact on new businesses
was a significant undertaking and there was a short
timeline for the initial report. She added that the
analysis would continue throughout the year and would
involve reviewing different data sources to evaluate how
economic actions affected small businesses.
Representative Galvin noted that she did not have the
fiscal notes in front of her, but she recalled that one of
the fiscal notes included a request for $500,000 [FN1 by
the Department of Administration (DOA), control code
Ztaay](copy on file), which she believed was tied to the
reporting requirements. She asked why the research analyst
would carry out the reporting work and why the fiscal note
reflected such a high cost for producing the report.
Ms. Lager replied that there were two separate reporting
requirements in the bill. One was the responsibility of
DOA, while the other was the responsibility of DCCED.
Co-Chair Foster relayed that some committee members needed
to attend another meeting soon. There was time for one more
question before the committee needed to move on to the next
bill.
Representative Hannan recalled that between 2016 and 2019,
DCCED had an Office of Economic Development and that the
positions within the office had later been moved to the
Office of the Governor. She asked if any of the positions
still existed at the department or in the governor's
office. She assumed some coordination would be necessary.
Ms. Lager responded that several of the positions had been
deleted during structural changes. She stated that she was
uncertain what positions remained in the Office of the
Governor. She recalled that possibly two positions still
existed in the office. One of the positions within DCCED
still remained and was located in the Commissioner's
Office. She explained that the duties covered by the
position included the International Trade Assistance
Program grant, as well as several other grant programs. She
added that the Commissioner's Office also provided direct
business assistance, helped businesses connect with
different divisions, and supported marketing for the
department.
Representative Hannan explained that she was trying to
determine the extent of the rebuilding effort. She asked
whether the department would need to start over in order to
rebuild the function of the positions or if there were
still staff in place dedicated to economic development who
could incorporate entrepreneurial development into their
work.
2:51:27 PM
Co-Chair Foster announced that the committee would set HB
30 aside and take it up again later so members would have
the opportunity to ask further questions.
HB 30 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 34
"An Act establishing the Alaska Innovation Council;
and relating to financial disclosures for members of
the Alaska Innovation Council."
2:52:08 PM
CORBIN MORRISON, STAFF, REPRESENTATIVE KY HOLLAND,
introduced the PowerPoint presentation "House Bill 34 v. H:
Alaska Innovation Council" dated April 10, 2025 (copy on
file). He explained that the bill established the Alaska
Innovation Council (AIC), a strategic initiative designed
to accelerate the growth of emerging industries and
diversify Alaska's economy. He stated that the council
would serve as a statewide resource to identify barriers,
recommend solutions, and support entrepreneurs, innovators,
and investors. He remarked that Alaska's economy was overly
dependent on a few key industries. The bill was a proactive
step toward long-term prosperity by aligning with the
state's economic development strategies and empowering
communities to lead in areas such as technology, energy,
and sustainable development. He noted that startups and
young businesses had been the driving force behind most
private sector job growth in Alaska. The bill ensured that
the state created an environment where new businesses could
thrive and Alaskans could be supported in building their
futures in the state.
Mr. Morrison continued that AIC would deliver an annual
plan to guide policy and investment decisions. He stated
that the council would help benchmark progress to maintain
focus on outcomes such as job creation, business growth,
and increased investment in Alaska. He stated that the bill
established a foundation for a more resilient and
opportunity-rich future.
Representative Holland added that the bill provided a
macroeconomic perspective and was an effort to elevate the
state's focus by creating a space to bring together
industry, the university, and key community stakeholders to
develop a long-term strategy. He stated that the goal was
to identify Alaska's distinctive innovative opportunities
and align resources to prepare for future economic
opportunities.
Representative Holland continued to slide 2 and relayed
that the state's comprehensive economic development
strategy was a "roll-up" of U.S. Comprehensive Economic
Development Strategy (CEDS) documents. He explained that
the strategy outlined the need to continue supporting
Alaska's economic engines, but also called for more effort
in diversifying the economy and investing in high-growth
emerging sectors such as mariculture, food systems, seafood
technologies, outdoor technologies, logistics, and blue
ocean industries. The emerging sectors created innovation
opportunities both by supporting existing economic engines
and by developing new businesses. Some examples of existing
businesses were 60 Hertz and Beaded Stream, which added
capacity to the state's existing economic activity, and
Alpine Fit and Ermine Skate, which were manufacturing new
value-added products. He explained that the efforts reduced
imports, provided import substitution, and created exports
that reached markets beyond Alaska.
Representative Holland emphasized that jobs in the emerging
sectors were the jobs of the future. He stated that
innovation-based investments had fueled two-thirds of
economic growth in the U.S. since World War II and had
accounted for approximately 90 percent of Alaska's net job
creation. He stressed that the bill would create
opportunities that would encourage Alaskans to remain in
the state, particularly young people and families.
2:56:24 PM
Representative Holland continued on slide 3 and remarked
that AIC's primary purpose was to diversify and support
emerging sectors. He observed that the sectors all worked
in separate focus areas and all activities were critical
for helping startups and creating innovation opportunities.
He emphasized that there was a need to bring sectors
together to develop a unified focus in order to ensure that
the state moved in a direction that would create the jobs
of the future.
Representative Holland advanced to slide 4 and shared that
the State of Entrepreneurship Report was part of a broader
stream of work that included the Economic Development
Strategy, the Seafood Task Force, the Energy Security Task
Force, and the Choose Anchorage Plan. He observed that
although Alaska had seen a series of economic development
initiatives, there had not yet been a venue to bring the
efforts together to determine how to align the visions and
plans to advance the economy.
Representative Holland continued to slide 5 and explained
that AIC was designed as a 12-member body to bring together
government, industry, academia, labor, and investment
capital sectors in order to assess distinctive
opportunities and competitive advantages for Alaska. He
stated that the council would develop a CEDS that would
help inform both the governor and the legislature regarding
opportunities for investment and ways to improve support
for initiatives. He added that the council would also
produce an innovation index to measure progress and compare
Alaska's standing to national metrics.
Representative Holland moved to slide 6 and explained that
the council's role was also to bring policy makers and key
industries together to support accelerated
commercialization and to ensure that work was carried out
on both statewide and regional levels. He noted that the
current version of the bill reflected several changes from
the original draft [Version LS0230\G to Version LS0230\H].
He pointed out that the original bill cast a wide net
similar to the larger Alaska Workforce Investment Board
(AWIB), but feedback prompted the design to be contracted
down to 12 members. He clarified that AIC membership would
include entrepreneurs and key stakeholders. He added that
he had used the Oregon Innovation Council framework as a
model for AIC. He remarked that the Alaska council would be
more narrowly focused than Oregon.
Representative Holland highlighted that additional
adjustments were made to allow the council to meet
electronically or telephonically, which would help reduce
costs for travel and staffing. He stated that more
attention was given to the investment capital available as
part of the annual report. He reiterated that the framework
was modeled based on plans in other states but tailored to
Alaska's needs.
2:59:43 PM
Representative Holland continued to slide 8 and reiterated
that AIC would allow various plans and efforts to be
coordinated. He noted that successful innovation efforts in
other states were built at the intersection of
strengthening the market economy to create private sector
jobs and aligning the growth with the civic economy, which
supported schools and public services. He stated that the
council's work would align with regional economic
development throughout the state.
Representative Holland moved to slide 9 and explained that
the expected outcome of the bill included accelerating the
creation of new jobs to encourage Alaskans to remain in the
state, building future growth opportunities, and reversing
a stagnant GDP trend that had persisted for 15 years.
Representative Holland continued to slide 10 and stated
that sectors such as clean energy, manufacturing, and
critical minerals offered additional opportunities. He
emphasized that creating a CEDS for Alaska would be central
to aligning industry and academic priorities, particularly
in research and technology transfer. He added that
identifying new products and services would be critical.
Representative Holland moved to slide 11 and reiterated
that many of the pieces existed in a fragmented way, and
the council was intended to bring the pieces together into
a unified plan that the governor, agencies, and the
legislature could use to guide investments and efforts.
3:02:23 PM
Co-Chair Foster suggested proceeding with the fiscal notes.
Ms. Lager shared that the first fiscal impact note from
DCCED was for OMB component 1027 with the control code
TQlKy. She explained that the request was within the
commissioner's office and included $350,500 of general
funds to support personal services, contractual services,
and commodities. She explained that the personal services
request covered the hiring of one program manager to
support the council's activities, including support for the
board, facilitation of deliverables, reporting, and
liaising with other organizations and agencies to ensure
that data needs were met. She added that contractual costs
included research, data analysis, analytics, report writing
support, and development and maintenance of an innovation
index. She noted that other costs included statewide and
departmental core services, such as general operating
expenses and setup costs for the new position.
Ms. Lager relayed that the next note from DCCED was a zero
fiscal impact note within Alaska Industrial Development and
Export Authority (AIDEA) for OMB component 1234 and with
the control code GLROD. She explained that the fiscal note
was no longer applicable since the relevant section had
been removed from the bill.
Co-Chair Foster suggested that that committee could move to
questions while it waited for the invited testifier to come
online.
Representative Stapp asked for a simplified explanation of
the bill. He shared that his understanding was that the
bill created a council to review regional economic plans
and then develop pathways for regional economic
development.
Representative Holland responded that page 3, line 11 of
the bill provided a framework for the council's work. He
noted that AIC would review the many existing individual
business plans and work on commercialization, identify
areas of distinct or emerging advantage for the state, and
support startup capital and entrepreneurship efforts. He
stated that the council would provide much needed
visibility. He observed that many business plans were
developed, but the plans often remained on paper and the
council would help operationalize the plans. For example,
the Choose Anchorage plan was an initiative that could be
advanced through the help of the council.
Representative Holland continued that page 4 of the bill
focused on identifying and expanding industry and core
research strengths that the state could invest in to
promote the growth of emerging industries. He emphasized
that the goal was to follow through on existing plans and
provide staff support within DCCED to advise the
legislature on resource allocation. He added that he hoped
the council would convene stakeholders and subject matter
experts to determine how to build the future economy that
he envisioned for Alaska. He stressed that the intent was
to move beyond simply writing plans and begin bringing
individuals with the necessary resources into the same
room. He remarked that the work was exciting and that while
many existing plans showed promise, his goal was to turn
the sentiment of "this would be great" into "this is
great."
3:07:43 PM
Representative Stapp commented that he liked the idea of
moving beyond studies to real action. He observed that
within the legislature there was a running joke about
funding the "study industry," where studies were funded,
reviewed, and then set aside without implementation, only
for the process to repeat later. He asked whether
Representative Holland had been able to quantify the amount
of resources invested in CEDS and similar plans that had
not been acted upon.
Representative Holland replied that he had not attempted to
quantify the resources. He explained that he preferred to
focus on doing the work directly. He noted that when he
tallied the volunteer hours that he and others had spent on
developing the council, the total came to approximately
50,000 hours. He emphasized that the high number of
volunteer hours demonstrated how much individuals were
willing to invest in order to make progress. He
acknowledged that the University of Alaska and the state
had done valuable work in advancing economic development in
Alaska. However, the next step was to accelerate the work
by convening stakeholders a few times each year to align
the efforts of each sector and amplify the benefits. He
reported that more than half of young people and many
families were leaving the state because they did not see
opportunities in Alaska. He stressed that opportunities
existed in the state and noted that the startups he had
worked with had no difficulty finding employees. He relayed
that the goal was to link and leverage existing work via
AIC in order to expand the efforts.
Co-Chair Foster noted that the invited testifier was now
available.
3:10:45 PM
JARED REYNOLDS, EXECUTIVE DIRECTOR, CENTER FOR ECONOMIC
DEVELOPMENT, UNIVERSITY OF ALASKA, ANCHORAGE (via
teleconference), explained that the Center for Economic
Development (CED) conducted applied research, economic
development, and technical assistance throughout Alaska and
operated several entrepreneurship programs. He relayed that
he had many years of personal experience working directly
with science-based companies with the potential to scale
and introduce new innovations.
Mr. Reynolds stated that the center was responsible for
publishing the aforementioned State of Entrepreneurship
report and he wanted to share additional data points to
provide context. He explained that Alaska's economy was at
an inflection point. The state ranked twentieth for young
employer firm density, but it lagged significantly in
commercializing research and scaling technology-driven
firms. He noted that Alaska's share of Small Business
Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) awards was consistently among the lowest in
the nation. He added that only 3 percent of Alaska's firms
had more than two employees annually, which trailed
innovation leaders in other states by double digits. He
highlighted that Alaska ranked forty-ninth in the number of
patents granted per 1,000 residents and had similarly low
rankings in venture capital investment.
Mr. Reynolds suggested that the numbers told an important
story. He noted that Alaska was a state of entrepreneurs
where many companies were started, but the state struggled
to innovate, commercialize, and scale at a pace that
retained promising companies and kept talent and
intellectual property in the state. He explained that HB 34
could help address the challenges. The bill could align
research and development with market needs by bringing
together researchers and private industry. The focus should
be on sectors where Alaska had comparative advantages, such
as Arctic technology, mariculture, critical minerals, and
forestry.
Mr. Reynold added that the bill could also help capitalize
the formation of capital. He emphasized that entrepreneurs
could not scale without access to capital, which was a
significant barrier in Alaska. He pointed out that funding
was needed at every stage of growth, including research,
venture capital, angel investment, and seed funding. The
council could streamline innovation policy by tracking
metrics such as patent filings, investment, and export
revenue, allowing lawmakers to evaluate what worked and
make adjustments. He noted that similar efforts had been
successful in states such as Utah, Colorado, and North
Carolina, and that even small victories in could increase
investment. For example, improving the state's SBIR and
STTR funding rates could support dozens of proof-of-concept
projects, scalable companies, and high-quality jobs.
Representative Tomaszewski noted that in the summary of
changes document (copy on file), the number of council
members had shifted from 12 to 19, yet the version of the
bill he had in front of him still listed 19 positions. He
suggested that the language might need to be updated to
reflect the correct number. He observed that the bill
contained a specific list of individuals that would be
eligible for appointment to the council and he wondered if
it might be too restrictive. He asked Representative
Holland if he had considered the potential difficulty of
filling the positions. He remarked that identifying 12
qualified appointees could be challenging, let alone 19.
3:16:28 PM
Representative Holland responded that he was looking at
Version H [Version LS0230\H] which stated that the council
had 12 members. He agreed that it would be a challenge to
find qualified members, but he knew the innovation
ecosystem and he was confident that he could find qualified
people. He emphasized that specifying categories of
expertise of each council member ensured that there would
be expertise in innovation, startups, and commercialization
on the council, rather than members having general business
backgrounds. He added that he was open to further
suggestions.
Representative Tomaszewski observed that his copy of the
bill still listed 19 members and suggested that the bill
might need cleanup.
Representative Hannan clarified that page 2, line 2, item 3
designated seven members appointed by the governor. She
added that the following paragraphs delineated the seven
categories. She noted that when the seven were combined
with the additional listed positions, the total equaled 12
members, not 19. She admitted that she initially miscounted
the number in the same way before re-reading the bill.
HB 34 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the meeting agenda for the
following day.
ADJOURNMENT
3:20:04 PM
The meeting was adjourned at 3:20 p.m.
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