Legislature(2003 - 2004)
04/09/2003 09:05 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= 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.
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