HB 271-AIDEA: MEMBERSHIP; RESPONSIBILITIES  3:46:31 PM CHAIR KREISS-TOMKINS announced that the next order of business would be HOUSE BILL NO. 271, "An Act relating to the Alaska Industrial Development and Export Authority; and providing for an effective date." 3:47:18 PM REPRESENTATIVE ANDY JOSEPHSON, Alaska State Legislature, prime sponsor of HB 271, clarified an incorrect statement he had made in error during the last bill hearing. He said he had erroneously believed that there were lawsuits pending from former Alaska Industrial Development and Export Authority (AIDEA) employees. He reported that although there was no pending litigation, there was an investigation involving alleged procurement decisions, verbal abuse, harassment, preferential loans, loan forgiveness, etcetera. He claimed that if the report he was referencing was correct, there were 18 people who had left AIDEA in the last 22 months under less than favorable circumstances. 3:49:42 PM CHAIR KREISS-TOMKINS opened public testimony on HB 271. 3:50:35 PM DAN CANNON stated his support for HB 271. He opined that AIDEA was an institution that had not evolved with the times. Further he characterized the immense economic power held by AIDEA as troubling, as there was little oversight or public accountability. He believed that the bill proposed necessary initial steps to help build transparency and accountability. 3:51:50 PM JOHN SONIN provided testimony unrelated to HB 271. 3:54:41 PM GABRIEL KITTER, said he had been closely watching AIDEA's involvement in the West Susitna Access Project, as he was a property owner and avid user of the area. He believed that AIDEA was unaffected by the shareholders' overwhelming opposition to the project, adding that overall, the institution's lack of public awareness and transparency to their projects was frightening. He commented on the lack of public outreach and characterized AIDEA as giving off a "mob-like feeling." He believed that AIDEA had grown into a political arm to overpower and overreach without public input for political and financial gain. He opined that reform was long overdue. 3:57:30 PM ARLEIGH HITCHCOCK opined that AIDEA was in desperate need of reform, as the board was allowed to make decisions to spend millions on projects that were bad for Alaskan communities and strongly opposed by the members of those communities. They commented on the lack of legislative oversight and sufficient public input, as well as inaccessible meetings that were subject to change at the last minute. They provided several examples. They characterized AIDEA's outreach to Tribes and communities as "horrible and disrespectful at best, and illegal at worst." 4:00:27 PM ANNA GODDUHN stated her support for HB 271. She believed that AIDEA needed public accountability to set priorities that were in the best interest of Alaskans instead of mega projects that served to enrich the few over the many. 4:01:26 PM MARGI DASHEVSKY expressed her support for HB 271 and encouraged the committee to strengthen the bill by adding amendments that addressed the board's illegal use of executive session. She highlighted AIDEA's record of violating the Open Meetings Act; further, she pointed out that the recent changes made by the institution in response to increased public scrutiny, such as posting meeting times on the website, were superficial. She shared several examples of AIDEA's misuse of executive session and argued that that the average of 2-5 days of public notice was not adequate for the public decisions of the magnitude in political nature that they continued to make. She opined that HB 271 was necessary to ensure that going forward, AIDEA played to the historical strengths of the lender and focused on issuing loans and bonds to small, locally owned businesses. 4:04:01 PM REPRESENTATIVE TARR requested that the previous testifiers follow up with written testimony that detailed their personal experiences with ADIEA. 4:04:35 PM MARGARET STERN stated her support for HB 271. She said she had been closely watching AIDEA and the West Susitna Access Project and was upset by how the institution had conducted itself. She suggested that AIDEA had waisted state money, failed to reach out to stakeholders, and disregarded public comment. She highlighted her concerns specific to the West Susitna Access Project. She reiterated her support for the bill to hold AIDEA accountable to the Alaskan public. 4:06:02 PM LOIS EPSTEIN, President, LNE Engineering and Policy, opined that the same concerns the legislature had about the Alaska Permanent Fund Corporation (APFC) Board of Trustees applied to the AIDEA board, as board members were appointed by the governor and not subject to legislative confirmation. She stated her "unconditional" support for HB 271, specifically the provision that increased analysis in legislative approval required for AIDEA investments of over $10 million. She believed that the provision would ensure that AIDEA was making financially sound, rather than politically driven, investments. 4:08:40 PM CHAIR KREISS-TOMKINS closed public testimony. He invited questions from committee members. 4:09:18 PM REPRESENTATIVE TARR asked whether the bill sponsor had considered how to address the issues regarding public notice and sporadic meeting time changes. REPRESENTATIVE JOSEPHSON applauded her interest in that subject. He noted that the bill would require AIDEA to conducts its business through resolution rather than motion; further, the bill would expand the notice requirement for amendment adoption and regulation repeal to 30 days and considerably expanded the opportunity for public testimony [on page 3 of HB 271]. REPRESENTATIVE TARR asked whether the bill clarified the timeline for issuing public notice. She pointed out that people take time out of their day to participate in public hearings, which becomes difficult if the meeting times change sporadically. She said she felt a responsibility to make the process easier. CHAIR KREISS-TOMKINS aligned himself with Representative Tarr's comments. 4:12:13 PM REPRESENTATIVE KAUFMAN directed attention to a supporting document, titled "Additional Information Letter of Clarification AIDEA" [included in the committee packet]. He characterized the letter as a categorical rebuttal and asked whether it could be addressed by the bill sponsor. REPRESENTATIVE JOSEPHSON reviewed the letter from AIDEA. REPRESENTATIVE KAUFMAN inquired about item 4 on page 2 of the document, which addressed AIDEA's attention to local interests. REPRESENTATIVE JOSEPHSON argued that the existing personnel guidelines were insufficient. He believed that there should be a provision in AIDEA's bylaws and state statute that outlined personnel policy and the hiring of the executive director. 4:15:36 PM REPRESENTATIVE KAUFMAN pointed out that item 5 on page 2 of the letter contended that AIDEA was a political subdivision of the Department of Commerce, Community & Economic Development (DCCED) and had official personnel guidelines that followed the policy established by the Department of Administration (DOA). He asked whether the bill sponsor was asserting that there should be additional personnel guidelines. REPRESENTATIVE JOSEPHSON answered yes. He recalled receiving feedback regarding the ongoing investigation, which suggested that the standard for termination was arbitrary. He opined that the existing statute was inadequate and less robust than other agencies' [personnel policies]. REPRESENTATIVE KAUFMAN sought to confirm that Representative Josephson believed that DCCED's [personnel policy] standards were inadequate. REPRESENTATIVE JOSEPHSON said he would have to delve into the issue in more detail. He maintained that the turnover of 18 individuals based on a feeling of workplace harassment was indicative of an agency that operated differently from other agencies. CHAIR KREISS-TOMKINS sought to confirm that AIDEA had 80 employees. REPRESENTATIVE JOSEPHSON said approximately. He shared his understanding that AIDEA was composed of 25-30 direct employees with the addition of "other arms," such as the Alaska Energy Authority (AEA). CHAIR KREISS-TOMKINS asked, "If 18 is the numerator, what is the denominator?" REPRESENTATIVE JOSEPHSON answered 82. REPRESENTATIVE KAUFMAN expressed his interest in hearing from an AIDEA representative at the next bill hearing. 4:19:24 PM REPRESENTATIVE EASTMAN directed attention to Section 9 of the bill and asked why the threshold for oversight was set at $10 million. He opined that the $10 million figure seemed high. REPRESENTATIVE JOSEPHSON said the intent was to avoid tying the hands of the agency. He believed that the threshold of $10 million was adequate for functions such as lending; however, it became problematic when AIDEA intervened in projects that were opposed by many Alaskans. He conveyed that there was a sense of "a lack of fair play" in terms of the way in which AIDEA operated, which the bill aimed to reform. REPRESENTATIVE EASTMAN turned to Section 10 of the bill, which directed AIDEA to prioritize projects that furthered arctic policy and energy policy. He asked which portion of the authority's projects captured those two categories. REPRESENTATIVE JOSEPHSON deferred to Ms. Sorum-Birk. 4:23:21 PM ELISE SORUM-BIRK, Staff, Representative Andy Josephson, Alaska State Legislature, on behalf of Representative Josephson, prime sponsor, shared her understanding that AIDEA invested quite a bit in the development of renewable and non-renewable energy resources. She commented on areas in which AIDEA could improve upon, such as positive investments in [indisc.] climates for strategic infrastructure and safe and secure maritime transport. REPRESENTATIVE EASTMAN asked what would happen to outstanding projects that weren't prioritized under Section 10 and therefore, didn't receive funding. MS. SORUM-BIRK contended that AIDEA already used broad discretion in choosing which projects to fund. She said section 10 was simply asking them to consider certain attributes when funding projects overall. CHAIR KREISS-TOMKINS announced that HB 271 was held over.