HB 71-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM  5:56:58 PM CHAIR DUNLEAVY announced the consideration of HB 71. "An Act requiring the Department of Commerce, Community, and Economic Development to file an annual report to the legislature regarding statewide and regional economic development projects and regional development organizations; extending the termination date of the Alaska regional economic assistance program; and providing for an effective date." 5:57:32 PM REPRESENTATIVE SHELLY HUGHES, sponsor of HB 71, explained that there are 12 Alaska Regional Development Organizations (ARDOR) across the state. The program will expire June 30, 2013, and HB 71 extends the expiration date to July 1, 2016. The bill also requires the Department of Commerce, Community and Economic Development (DCCED) to prepare an annual report to the legislature as a means of improving accountability of the ARDORs. The report will include information about how each ARDOR is using state funds to improve the economic health of the particular region, about statewide and regional projects and activities of the ARDORs, and individual information about finances, work plans, strategies, and projects. She explained that ARDORs serve as the state's contribution to economic development in the urban and rural areas throughout the state. ARDORs are based on the premise that the best strategy for regional economic development is a locally driven initiative using local leaders who know the regional conditions, challenges, and opportunities. They are best suited to work in partnerships with the state and other entities. She opined that this was an effective model where local businesses can pool resources across multiple communities to work on the projects, develop partnerships, and provide needed technical assistance. 5:59:38 PM SENATOR OLSON asked how these organizations are measured to ensure that the state's money is being spent for worthwhile endeavors. REPRESENTATIVE HUGHES explained that the individual ARDORS provide reports to DCCED and as they apply for grants each year they are expected to provide certain plans and meet certain criteria. To alleviate concerns about the success of the program she requested an audit through the Legislative Budget and Audit Committee. That is one reason that the extension is for three years as opposed to five years. The audit and the new, required reports to the legislature will improve accountability of the individual ARDORs. She acknowledged that some could use improvement. SENATOR OLSON asked about the penalties for nonperformance. REPRESENTATIVE HUGHES replied the ARDOR could be denied a subsequent grant, but she was unaware of any other penalties. SENATOR OLSON commended the sponsor for requesting the audit. 6:02:06 PM LORENE PALMER, Director, Division of Economic Development, Department of Commerce, Community and Economic Development (DCCED) introduced herself and Nicole Grewe, the manager of the ARDOR program. She stated that the DCCED supports the reauthorization of the ARDOR program and believes that the model using local leaders continues to be sound. However, refinements are needed. She said ARDORs are a vital extension of DCCED, and the department relies on them to report on the strengths and challenges in their region. That information helps DCCED form programs, initiatives, and policies to assist the individual ARDORs. DCCED funnels programs through the ARDORS to help local businesses with technical assistance, marketing assistance, and loan programs all of which help economic development efforts. She highlighted that DCCED has worked hard to help each ARDOR to be successful, but each performs differently because each region is vastly different. She reiterated support for the legislation. 6:04:30 PM MERRILL SANFORD, Mayor, City and Borough of Juneau stated that he was a board member of Southeast Conference (SEC), the ARDOR for all of Southeast Alaska. This ARDOR communicates with more than 30 communities from Yakutat to Metlakatla and receives up to $65,000 per year for the program. This ARDOR has been very successful in its efforts to further economic development over the region. One of the larger projects has been the Ketchikan dry dock, which should bring needed jobs to that community. SEC has also worked to bring back timber industry jobs and to develop mariculture potential. He emphasized that SEC brings large and small communities together to further economic development. CHAIR DUNLEAVY noted that public testimony was open. 6:08:08 PM BRYANT HAMMOND, Director, Community Planning and Development, Kawerak Inc., said he was speaking on behalf of the Bering Straits Development Council (BSDC), the ARDOR for the Bering Straits region. He explained that BSDC serves 16 communities and 20 federally recognized tribes and provides economic development, community planning, and small business assistance to the region. He described the specific duties of the energy development specialist, the business planning specialist, the e-commerce technician, the grant writing specialist, and the planning and development specialist for the BSDC ARDOR. He noted that much the ARDOR funding goes toward the latter position. Some of the local projects are Lemonade Day Alaska, a strategic energy plan, tax assistance services in each community, and a sustainable teen center in Savoonga based on locally generated revenue streams. He concluded that the ARDOR program is vital in the Bering Straits region. 6:11:51 PM DENISE BRAND, Grants Writer-Coordinator, Fairbanks North Star Borough, testified in support of HB 71. She said being an ARDOR has been very valuable for the community. The local commission meets monthly to address critical economic issues such as the cost of energy, maintaining military presence in the Interior, and sustainable agriculture projects. Through its ARDOR, the Fairbanks North Star Borough has been able to update its comprehensive economic development strategy, initiate geothermal exploration, and complete the biomass cluster project. She reiterated support for reauthorizing the ARDOR program. 6:13:25 PM BILL POPP, President and CEO, Anchorage Economic Development Corporation (AEDC), testified in support of HB 71. He said that the ARDOR program is an important component of the AEDC budget. The funds are used for business retention and expansion and to attract national and international investment opportunities throughout Southcentral and the Interior. He said this program is also an important part of the efforts to promote entrepreneurship within the community of Anchorage and the Southcentral region. An important aspect of the program is to provide core seed funding to the ARDORS serving the rural regions. They can use that to attract other funding to leverage the difficult effort of economic and community development in many of the communities that they serve. He reiterated support for HB 71. 6:15:28 PM MARILYN HEDDELL, Director, Prince William Sound Economic Development District, voiced support for the ARDOR program. It has sponsored many projects in the region including harbor improvements, a new cold storage plant in Valdez, new tsunami sirens, and educational and cultural programs throughout the region. These grant funds are crucial to the way of life in Prince William Sound. 6:16:32 PM CHAIR DUNLEAVY closed public testimony. SENATOR MICCICHE disclosed that he was a former board member of the Kenai Peninsula Economic Development District and a supporter of the ARDOR program. CHAIR DUNLEAVY stated he would hold HB 71 in committee and take action on it on Saturday, barring any problems.