Legislature(1995 - 1996)
1995-04-20 Senate Journal
Full Journal pdf1995-04-20 Senate Journal Page 1106 SB 161 SENATE BILL NO. 161 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "An Act relating to the financing of technological developments by public corporations of the state; and relating to the financing of the Kodiak launch complex, the Fairbanks satellite ground station space park, and a low-rank coal water fuel technology project." was read the first time and referred to the Finance Committee. Zero fiscal note published today from Department of Commerce and Economic Development. Governor's transmittal letter dated April 20: Dear President Pearce: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill that would improve the ability of public corporations of the state to finance technological developments. This bill amends AS37.17 to facilitate the Alaska Science and Technology Foundation's (ASTF) development of commercial uses for technological developments, among its other purposes. These amendments will assist state agencies and public corporations such 1995-04-20 Senate Journal Page 1107 SB 161 as the Alaska Aerospace Development Corporation (AADC) and the Alaska Industrial Development and Export Authority (AIDEA) in technology-related development projects. ASTF would be able to provide guidance through its established peer review system and grant review process, as well as financial assistance to projects meeting its technological and business criteria. Existing AS37.17.090(d) requires that at least 50 percent of the ASTF endowment income that is distributed by ASTF in a fiscal year must be for grants of $100,000 or less. Section 3 of the bill would exempt two grants to AIDEA or AADC from that requirement. Absent this exemption, ASTF would be limited to providing only minor financial assistance to projects of potentially great benefit to the state. One of the two grants is for development of the Kodiak launch complex and Fairbanks satellite ground station space park. The second grant is for development of low-rank coal water fuel technology. It is anticipated that the grants from ASTF for these projects may be phased in. Section 5 of the bill also provides ASTF with more flexibility to ensure a fair financial return to the state based upon the value derived by the grantee from the ASTF grant. The bill replaces the current narrow language of AS37.17.090(g), restricting ASTF to a return from "royalties, licenses, and patents", with broader language acknowledging that grantees can gain significant economic benefit from an ASTF grant without ever earning income from royalties, licenses, and patents. For example, ASTF could receive a return from AADC for the operation of the Kodiak launch facility. Section 5 provides ASTF with additional protection for its investments by the addition of language allowing ASTF to take a security interest in, and own, patents, copyrights, and other intellectual property to secure payment of sums owed to ASTF under a grant agreement. The bill continues to require that the revenue received by ASTF be paid into the principal of the endowment, subject to AS37.07. The bill allows ASTF to tailor each "return" provision to the specific circumstances of the grantee. Under this provision, ASTF is able to receive a fair return where the grantee is going to manufacture and sell its own products based upon ASTF technology. ASTF is also able to receive a fair return based upon the growth in the grantee's business based upon the ASTF grant. 1995-04-20 Senate Journal Page 1108 SB 161 The bill improves ASTF's ability to protect sensitive commercial information it receives through the grant process. Section 4 of the bill amends AS37.17.090(f) to allow the board of ASTF to adopt administrative regulations necessary to protect trade secrets and other proprietary information submitted to ASTF from disclosure under AS09.25.110 - 09.25.120. These regulations would be adopted by the board under standards developed to protect the interests of the state and the prospective grantees. The bill also contains a section authorizing AIDEA to issue up to $20,000,000 in bonds to finance the development of the Kodiak rocket launch complex and the Fairbanks satellite ground stations, or to finance these projects by other means available to AIDEA. This section also includes a limitation that the board of directors of AIDEA and AADC must each determine that there is sufficient commercial interest and financial viability to support the debt service and costs of the facility before money may be expended for any phase of construction. I urge your prompt consideration and passage of this bill. Sincerely, /s/ Tony Knowles Governor