Legislature(1993 - 1994)
03/22/1993 09:07 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 154 An Act relating to the economic development grant program; and providing for an effective date. Co-chair Pearce directed that SB 154 be brought on for discussion, further directed attention to the Senate Labor and Commerce version, and noted need for a new fiscal note from the Dept of Commerce and Economic Development pertaining to that version. Senator Jacko, sponsor of the legislation, explained that the bill would establish an economic development grant program within the Dept. of Administration to fund municipal projects based on economic development criteria. The Senate Labor and Commerce version creates specific criteria municipalities and regional development organizations (ARDORS) must meet to obtain grants appropriated by the legislature. Eligibility will be determined by an evaluation committee headed by the Office of Management and Budget. The committee will work with the departments of Commerce and Economic Development, Community and Regional Affairs, and other agencies to prioritize applications. Applications must be submitted to the Governor by October 1. After ranking by the evaluation committee, the recommended projects will be submitted to legislative finance committees which will in turn recommend to the respective bodies which projects should be funded. Grant funding may only be used for construction of capital projects to increase economic opportunities for municipalities. Changes to the original bill, effected in Senate Labor and Commerce Committee, replaced the Dept. of Commerce and Economic Development with the Dept. of Administration as the administering agency. An additional change created the evaluation committee to ensure multi-departmental review. Senator Jacko next pointed to page 2, lines 7 through 20, of the bill and noted the six items of criteria to be use in evaluating projects. He then noted that CSSB 154 (L&C) is not intended as a replacement or substitute for "other capital funding programs" elsewhere within the legislative process. It is intended as a separate program whereby municipalities and their instrumentalities may access grant funds based solely on economic criteria. Co-chair Pearce referred to discussion in Senate Labor and Commerce Committee regarding inclusion of language allowing instrumentalities of municipalities to submit projects and receive funding. The Co-chair said that she had port authorities in mind during that discussion. She then asked if the Senate Labor and Commerce version would allow for that type of participation. Senator Jacko answered affirmatively. He added that two entities could apply for the grants: 1. ARDORS 2. Municipalities and their instrumentalities. Co-chair Pearce voiced her understanding that port authority legislation requires that port authorities be instrumentalities of municipalities. Senator Kerttula questioned transfer of administrative authority from the Dept. of Commerce and Economic Development to the Dept. of Administration. He noted that duties of the Dept. of Administration originally related to bookkeeping functions. Responsibility for pioneer, telecommunication, and other programs have been added over time. The department has thus become an advocating agency when it should remain neutral and focus on bookkeeping. He then asked why the change was made to Administration rather than Community and Regional Affairs. Senator Jacko noted that all three departments would be involved in the effort. The question is not one of advocacy so much as evaluation of criteria and the subsequent making of recommendations based on that criteria. SHELBY STASTNY, Director, Office of Management and Budget, came before committee. He voiced the administration's position that since the Dept. of Administration has already established the mechanism to administer a number of other grant programs, it was logical to place this economic development grant program under its jurisdiction as well. Senator Kelly asked if the administration supports the bill in its current form. Mr. Stastny responded affirmatively. Senator Kelly observed that changes effected in CSSB 154 (L&C) were made at the request of the administration and in conjunction with the prime sponsor. Mr. Stastny attested to the fact that the proposed bill represents "an important part of the capital structure." He then voiced disappointment that legislation containing the capital matching grants program, an integral part of the whole capital structure, was not also being heard at this time. Senator Kelly suggested that under CSSB 154 (L&C), the administration would have much latitude for capital funding. Mr. Stastny observed that neither the bill nor any other mechanism address several areas that would be covered by capital matching grants. He stressed need for an equitable dispersion of "at least some portion of the capital budget throughout all the communities and villages of Alaska." That would be difficult to accomplish under CSSB 154 (L&C). CHRIS GATES, Director, Division of Economic Development, Dept. of Commerce and Economic Development, next came before committee. He voiced his understanding that the program would be administered within available resources at the Dept. of Administration. JIM KOHLER, Executive Director, Southeast Conference, next came before committee, voicing support for the bill and appreciation to legislators who devoted time to the economic task force summit. He noted that the proposed bill reflects one of the issue brought forth at the summit. Action repeats the signal that the legislature is both conscious and desirous of specific, immediate action that will result in direct economic impact. Co-chair Pearce directed that the bill be HELD in committee pending receipt of a new fiscal note from the Dept. of Administration.