House committee hears invited testimony on bill to create Office of Entrepreneurship

The House Labor and Commerce Committee heard invited testimony March 18 on House Bill 30, which would create an Office of Entrepreneurship to connect Alaska startups to services, coordinate existing programs and produce periodic reports on how state legislation affects new businesses.

Supporters told the committee the office aims to address slow economic growth and talent out-migration by helping homegrown businesses scale. "As of right now in the state of Alaska, our economic outlook is not, hot," said Cameron Ebersold, staff to Representative Kai Holland, who presented the bill. Ebersold said the office would "connect new businesses to services throughout the state of Alaska" and would be "required to produce an annual report on how legislation passed by this body would affect new businesses throughout the state."

The bill's backers and invited witnesses said Alaska forms many businesses but struggles to grow scalable firms. "So 33% of Alaskan businesses are less than 5 years old," said Jared Reynolds, identified as Director of the Center for Economic Development at the University of Alaska Anchorage. Reynolds said the state lags in commercialization metrics such as SBIR/STTR funding and in retaining firms that can scale beyond necessity-driven enterprises. Renee Choney Haywood, who described herself as previously serving as director for economic development at the state Division of Economic Development, testified that an office focused on startups could pick up pieces of work that previously sat inside the division and provide targeted support for early-stage firms.

Sponsor Kai Holland said the committee removed an earlier provision that would have waived business-license fees for new businesses after consultation with the department and the committee because the foregone revenue and net benefits were unclear. Holland said clarifying and narrowing the office's duties reduced staff needs in the fiscal note from an initial six positions to three and eliminated a projected roughly $2 million revenue loss tied to the fee waiver. Holland also said the bill would add elements to an existing purchasing report so the state can better see whether procurement activity favors in-state startups; that reporting will run on the current two-year cycle.

Committee members asked how the office would differ from the Department of Commerce, Community, and Economic Development. Holland and witnesses said the department performs broad business licensing and other statutory functions, but the proposed office would bring a specific, coordinated focus on startups, early-stage support and leveraging university research for commercialization. Reid and others emphasized connectivity, access to capital and a pipeline from early-stage support to accelerators and investors as areas needing improvement.

No committee action on HB 30 was taken at the hearing; the chair set an amendment deadline at 4 p.m. the following day and said the committee would return for further consideration. Invited testimony only was taken at this hearing.