Legislature(1993 - 1994)

03/22/1993 09:07 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                 
  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                 

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