Legislature(2003 - 2004)
04/09/2003 09:05 AM Senate FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 173 "An Act repealing statutes pertaining to the Alaska Science and Technology Foundation and transferring money in the foundation's endowment; repealing statutes relating to the BIDCO assistance program; repealing statutes pertaining to the international trade and business endowment and transferring money in the international trade and business endowment; transferring oversight administration of outstanding Alaska Science and Technology Foundation loans and grants to the Alaska Industrial Development and Export Authority; establishing an Alaska BIDCO assistance program to be administered by the Department of Community and Economic Development; making conforming amendments; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. Co-chair Wilken explained that this bill, which is requested by the Governor, would repeal the statutes relating to the Alaska Science and Technology Foundation (ASTF) and its programs. He specified that the BIDCO (Business and Industrial Development Corporation) assistance program would be replaced with a program within the Department of Community and Economic Development, and that oversight of the former ASTF program would be transferred to the Alaska Industrial Development & Export Authority (AIDEA). EDGAR BLATCHFORD, Commissioner, Department of Community and Economic Development read the language included in the title of the bill. He then read a portion of the Department overview titled "The Alaska Science and Technology Foundation," [copy on file], dated March 25, 2003 as follows. ASFT was created in 1988 with an endowment of more than $100 million to support grants for technology projects, knowledge projects, small business innovative research bridging grants, and direct grants to teachers. Through its endowment, ASTF has generated about $126 million in income for distribution. Between 1988 and 2002, one half of the endowment income - $63 million - has been appropriated and spent for "non-ASTF purposes": · $35 million for University of Alaska operations, Alaska Aerospace Development (AADC) Corporation operations, and International Trade and Development office operations; · $11 million was used to match federal funding for construction of the AADC's $39 million Kodiak Rocket Launch Center; and · $17 million was appropriated to the state general fund. Distributions to support core programs totaled: $25 million in technology grants, $10 million for other knowledge grants; $8 million for business partners, and $2 million in grants to math and science teachers. Foundation operating expenses totaled $13 million, equal to 35% of the $45 million spent for core purpose grants. In mid-March the Legislature passed and the Governor signed into law a supplemental appropriation reducing ASTF FY 2003 operations to amounts spent and obligated to date and included th instruction to ASTF to wind down operations by May 15. The Governor's FY 2004 budget supports the Legislative directive - no funding is provided for ASTF. Commissioner Blatchford informed the Members that due to serving on a Native tribal council, which has applied for ASTF grants, he wished to declare a potential conflict of interest on this matter. Senator Stevens asked the identity of the business partners who received the $8 million. TOM LAWSON, Director, Division of Administrative Services, Department of Community and Economic Development, specified that the partners include the BIDCO entities of: the Alaska Growth Capital; Alaska Manufacturer's Association; Alaska InvestNet; and the Alaska Hi-Tech Business Council. He stated that the money was allotted to those entities to allow them to operate various functions. Co-Chair Wilken asked for information regarding language in Section 5 (1) on page 2, line 15 of the bill that reads as follows. (1) administering the Alaska BIDCO assistance program related to loans and other financial assistance made or provided under AS 37.17.500 - 37.17.690; Mr. Lawson responded that the intent of this language is "to replicate the BIDCO program" in the Department of Community and Economic Development rather than in ASTF. He asserted that while the "shell of the program" is being transferred, there is no accompanying request for funding. He stated that further information regarding the language would be supplied. Co-chair Wilken asked that information regarding Alaska statute AS 37.17.500 be supplied to the Committee, as it is frequently referenced in the bill. Co-Chair Wilken ordered the bill HELD in Committee.