Legislature(2017 - 2018)CAPITOL 106

02/23/2018 08:00 AM EDUCATION

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Audio Topic
08:01:01 AM Start
08:01:54 AM Presentation: the Power of the University of Alaska Research
08:58:48 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Joint with Senate EDC
+ Presentation: The Power of University of Alaska TELECONFERENCED
Research by Larry Hinzman, Vice Chancellor for
Research, UAF
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE EDUCATION STANDING COMMITTEE                                                                             
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                       February 23, 2018                                                                                        
                           8:01 a.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE EDUCATION STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Harriet Drummond, Chair                                                                                         
 Representative Justin Parish, Vice Chair                                                                                       
 Representative Jennifer Johnston                                                                                               
 Representative Chuck Kopp                                                                                                      
 Representative David Talerico                                                                                                  
                                                                                                                                
SENATE EDUCATION STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Gary Stevens, Chair                                                                                                    
 Senator Cathy Giessel                                                                                                          
 Senator Shelley Hughes                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
HOUSE EDUCATION STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Ivy Spohnholz                                                                                                   
 Representative Lora Reinbold (alternate)                                                                                       
 Representative Geran Tarr (alternate)                                                                                          
                                                                                                                                
SENATE EDUCATION STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator John Coghill                                                                                                           
 Senator Tom Begich                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: THE POWER OF UNIVERSITY ALASKA RESEARCH                                                                           
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LARRY HINZMAN, Ph.D., Vice Chancellor for Research                                                                              
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Presented Power of University Research.                                                                   
                                                                                                                                
PETER WEBLEY, Ph.D., Research Associate Professor                                                                               
University of Alaska Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Presented Power of University Research.                                                                   
                                                                                                                                
GEORGE ROE, Researcher                                                                                                          
Alaska Center for Energy and Power                                                                                              
Institute of Northern Engineering                                                                                               
University Alaska Fairbanks                                                                                                     
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Presented Power of University Research.                                                                   
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:01:01 AM                                                                                                                    
                                                                                                                                
CHAIR  GARY STEVENS  called the  joint meeting  of the  House and                                                             
Senate  Education  Standing  Committees  to order  at  8:01  a.m.                                                               
Present at the  call to order were Senators  Giessel, Hughes, and                                                               
Stevens  and Representatives  Drummond,  Johnston, and  Talerico.                                                               
Representative Kopp and Parish joined shortly thereafter.                                                                       
                                                                                                                                
^Presentation: The Power of the University of Alaska Research                                                                   
  PRESENTATION: THE POWER OF THE UNIVERSITY OF ALASKA RESEARCH                                                              
                                                                                                                              
8:01:54 AM                                                                                                                    
                                                                                                                                
CHAIR STEVENS announced the presentation  the Power of University                                                               
of Alaska Research.                                                                                                             
                                                                                                                                
LARRY HINZMAN,  Ph.D., Vice  Chancellor for  Research, University                                                               
of Alaska  Fairbanks, Fairbanks, Alaska,  said he had  three main                                                               
points:                                                                                                                         
                                                                                                                                
        1. Research is important to Alaska industry. Research is                                                                
          an industry for the state of Alaska and highly                                                                        
          relevant. They take on practical issues and resolve                                                                   
          important problems for the state.                                                                                     
        2. Research and innovation are important to drive the                                                                   
          economy and diversification of the economy.                                                                           
        3. Investment in education will drive Alaska's economy.                                                                 
                                                                                                                                
8:03:51 AM                                                                                                                    
                                                                                                                                
DR. HINZMAN said  he is advocating for the Board  of Regents $341                                                               
million  budget  request.  That includes  $3.7  million  to  grow                                                               
world-class  research,  distributed  across the  three  campuses.                                                               
They  are conducting  thousands  of research  projects. Since  FY                                                               
[fiscal year]  10, research revenue  generated by  the University                                                               
of  Alaska (UA)  has exceeded  $1 billion  dollars to  the state.                                                               
That is  direct money  coming into  the state. That  is a  lot of                                                               
good  jobs, but  it  is a  drop  in the  bucket  compared to  the                                                               
residual impact, the other benefits that come from research.                                                                    
                                                                                                                                
DR.  HINZMAN reviewed  information  showing that  research is  an                                                               
important Alaskan industry:                                                                                                     
                                                                                                                                
        • In 2017, UA had over $148 million in external research                                                                
          expenditures                                                                                                          
        • The $24 million in state research funding was                                                                         
          multiplied by 6                                                                                                       
        • $90 million in direct wages and salaries; about 1250                                                                  
          direct jobs                                                                                                           
        • Another $27 million indirect income, 350 jobs from                                                                    
          multiplier effects of direct employment                                                                               
        • $70 million in purchases, contracted services, travel,                                                                
          student aid and equipment                                                                                             
                                                                                                                                
DR.  HINZMAN  said they  count  expenditures,  not income,  as  a                                                               
comparison point to other universities across the nation.                                                                       
                                                                                                                                
He pointed out  the multiplier by 6 for state  research, and that                                                               
the base funds  of $24 million are needed to  create and maintain                                                               
research.                                                                                                                       
                                                                                                                                
He  presented a  chart  that  showed the  UA  research return  on                                                               
investment  was 6.2  in FY  17,  6.2 dollars  returned for  every                                                               
dollar invested. The return does vary  from year to year for each                                                               
institute.                                                                                                                      
                                                                                                                                
DR. HINZMAN made  the following points to show  that research and                                                               
quality education are completely integrated.                                                                                    
                                                                                                                                
        • Research opportunities attract outstanding faculty.                                                                   
        • Research is integral to a curriculum that reflects the                                                                
          most up-to-date knowledge.                                                                                            
        • Undergraduate and graduate student involvement in                                                                     
          research.                                                                                                             
        • Quality research institutions attract out-of-state                                                                    
          students and retain outstanding resident students.                                                                    
          Builds a pipeline of outstanding students who become                                                                  
          employees of Alaska businesses and institutions.                                                                      
                                                                                                                                
He  said  that the  faculty  who  get  the highest  reviews  from                                                               
students  are the  faculty strongly  engaged in  research because                                                               
they offer  the latest technology,  are the most advanced  in the                                                               
sciences.                                                                                                                       
                                                                                                                                
DR.  HINZMAN  made  the  following points  to  show  how  central                                                               
research is to education. He  noted that the University of Alaska                                                               
produces more publications  and citations on the  Arctic than any                                                               
other institution in the world.                                                                                                 
                                                                                                                                
        • Both graduate and undergraduate students are a key                                                                    
          part of our research activities.                                                                                      
        • 40% of Fairbanks campus undergraduates participate in                                                                 
          research. 164 of 964 total UAF graduate students are                                                                  
          graduate research assistants.                                                                                         
        • UAF Publications with student authors are more than                                                                   
          40% of the total                                                                                                      
                                                                                                                                
8:10:15 AM                                                                                                                    
                                                                                                                                
DR. HINZMAN said one of  the greatest values in engaging students                                                               
in  research is  teaching  them  to think,  teaching  them to  be                                                               
creative,  and teaching  them to  make things  work. One  student                                                               
told him that a day in the  field is like watching 24 episodes of                                                               
MacGyver.                                                                                                                       
                                                                                                                                
He explained  that Undergraduate Research and  Scholarly Activity                                                               
(URSA) was  started in 2012  and is dedicated to  giving students                                                               
research  opportunities. He  gave  examples of  students who  did                                                               
research in  chemistry and  biology. URSA  also awards  grants to                                                               
arts students.  These opportunities bring students  to Alaska and                                                               
keep them in Alaska.                                                                                                            
                                                                                                                                
He  said that  BLaST, Biomedical  Learning and  Student Training,                                                               
also  began  a few  years  to  get  more students  in  biomedical                                                               
fields.   BLaST  provides   mentored   research  experiences   to                                                               
students. Just  two days ago  they were reviewed by  the National                                                               
Institutes of Health and the reviews were glowing.                                                                              
                                                                                                                                
DR.  HINZMAN said  graduate students  are essential  to research.                                                               
They  play a  big role.  They bring  ideas and  enthusiasm. Their                                                               
training in  the latest  techniques is good  for the  state. They                                                               
come out  with a strength  and confidence and  understanding that                                                               
benefits local industries.                                                                                                      
                                                                                                                                
He  described two  examples of  graduate student  research, Thilo                                                               
Klenz,   Ph.D.  student   in   Oceanography,  thesis:   comparing                                                               
lagrangian   drifter  statistics   in   a   numerical  model   to                                                               
observations;  and Stanley  Edwin, Ph.D.  student in  Atmospheric                                                               
Sciences, thesis: air quality in Interior Alaska villages.                                                                      
                                                                                                                                
He shared a map of  Alaska showing locations of graduate research                                                               
on  economic  geology,  many  of  them  related  to  mining,  and                                                               
geothermal springs and  coal, oil, and gas. Some  of the research                                                               
was done before  the mines or geothermal  springs were developed,                                                               
which helps  with the development  of those resources.  When done                                                               
afterwards,  they help  characterize  what  processes drove  that                                                               
development to help development in other regions.                                                                               
                                                                                                                                
8:17:24 AM                                                                                                                    
                                                                                                                                
PETER WEBLEY, Ph.D., Research  Associate Professor, University of                                                               
Alaska Fairbanks, Fairbanks, Alaska, said  he is an ambassador of                                                               
the  Office of  Intellectual  Property  and Commercialization  at                                                               
UAF.  His  presentation   focus  is  on  the   $1.6  million  for                                                               
Contribute to Alaska's Economic Development  in the FY19 Board of                                                               
Regents budget request.  He noted that Dr. Hinzman  had said that                                                               
research  revenue  generated  by  the University  of  Alaska  has                                                               
exceeded $1  billion dollars  to the state  since FY10.  He added                                                               
that the commercial  potential from university-developed research                                                               
is  astronomically  larger than  that  from  the ability  to  get                                                               
licensing fees,  the ability  to transfer  technology out  of the                                                               
university  environment,  to grow  new  companies  and bring  new                                                               
companies to work with Alaskans, and build the economy.                                                                         
                                                                                                                                
He  said that  as an  ambassador  of the  Office of  Intellectual                                                               
Property,  he  connects with  the  tech  transfer office  at  the                                                               
university. The idea  is to take research projects  and move them                                                               
into the commercial  market. These could be  working with startup                                                               
companies  directly from  academics, students  and staff,  at the                                                               
university or  working with an existing  company to commercialize                                                               
that work.                                                                                                                      
                                                                                                                                
DR. WEBLEY  said that  the aim  of the office  is to  cultivate a                                                               
culture of innovation  at the university, to  take research ideas                                                               
and  move them  forward.  The aim  of that  is  to diversify  the                                                               
economy,  to   take  funded-research   projects  and   develop  a                                                               
capability to bring additional funding  into the state and employ                                                               
people in the state of Alaska.                                                                                                  
                                                                                                                                
He shared that he  is a transplant who came to  Alaska in 2005 as                                                               
a postdoctoral research  scientist. He thought he  would stay for                                                               
two years and then return to  the United Kingdom, but Alaska grew                                                               
on him and  he is forming a company. Research  brings people here                                                               
and research keeps people here.                                                                                                 
                                                                                                                                
He said  the office is starting  a Lean Launch Workshop.  This is                                                               
about a new approach  on how to take an idea  and form a company.                                                               
In two or  three days someone can form a  company. In addition to                                                               
university staff  and advisors, someone from  Stanford who helped                                                               
design the  process is  coming to teach  that in  Fairbanks. This                                                               
will foster new collaborations that can lead to new companies.                                                                  
                                                                                                                                
He said they  have also started the  Innovation Initiative, which                                                               
is more  internal to  the university.  It's a  place to  come and                                                               
talk about innovation  and new ideas. They have  had 30-40 people                                                               
show up  to learn about  how they can become  entrepreneurs. Next                                                               
week he will be presenting on his story and his company.                                                                        
                                                                                                                                
DR.  WEBLEY said  they are  looking  at developing  a new  course                                                               
based on Stanford's Lean Launch.                                                                                                
                                                                                                                                
CHAIR STEVENS asked him to explain the Stanford connection.                                                                     
                                                                                                                                
DR. WEBLEY  replied that  a professor  at Stanford  developed the                                                               
Lean Launch process. He is coming  up to teach that to university                                                               
faculty. Dr. Webley will be one  of the co-teachers of the course                                                               
with another ambassador of the Office of Intellectual Property.                                                                 
                                                                                                                                
SENATOR HUGHES  asked if there  is something similar going  on in                                                               
Anchorage because she would love to promote it.                                                                                 
                                                                                                                                
DR. WEBLEY answered  people in Anchorage are  coming to Fairbanks                                                               
for the workshop. They will  look at growing this capability, but                                                               
it is being housed at Fairbanks.                                                                                                
                                                                                                                                
SENATOR HUGHES said that it is worth the drive.                                                                                 
                                                                                                                                
DR. WEBLEY  said they  had an application  process for  the March                                                               
workshop. They had more applicants than space.                                                                                  
                                                                                                                                
REPRESENTATIVE JOHNSTON  said there  are similar events  going on                                                               
in Anchorage and throughout the  state. The blue ocean event just                                                               
took place  in Anchorage and this  is the week of  the Innovation                                                               
Summit in Juneau.                                                                                                               
                                                                                                                                
8:24:29 AM                                                                                                                    
                                                                                                                                
DR.  WEBLEY said  this is  the Year  of Innovation  and different                                                               
events are  going on throughout  that state, such as  OTIS (Ocean                                                               
Technology Innovation Sprint) in Anchorage.                                                                                     
                                                                                                                                
He said  the ambassadors  are researchers  who have  gone through                                                               
the  entrepreneurial  process.  Ambassadors can  give  advice  to                                                               
students, faculty, and staff  interested in entrepreneurship. The                                                               
Center  for  Innovation, Commercialization  and  Entrepreneurship                                                               
(Center  ICE), an  incubator,  has just  been  set up.  Companies                                                               
working with the university  to commercialize university research                                                               
or new  startup companies  that have come  out of  the university                                                               
will be housed  at Center ICE. People  with different backgrounds                                                               
can foster new ideas by being in the same space.                                                                                
                                                                                                                                
He showed  a graph, Alaska's  "Innovation Pipeline,"  showing the                                                               
many innovation events and projects in the state.                                                                               
                                                                                                                                
He explained  the history of his  company, V-ADAPT, Inc. He  is a                                                               
volcano researcher  by training.  They had been  developing tools                                                               
to  detect and  track  volcanic ash  for about  15  years with  a                                                               
federally funded research program.  After support ended, they saw                                                               
an  opportunity   to  commercialize   the  technology   they  had                                                               
developed. The  aviation sector had  an interest as  aircraft and                                                               
volcanic ash  do not  mix. They developed  this company  from the                                                               
developed  intellectual  property  from  the  university  with  a                                                               
three-step process:  1. Do an  invention disclosure. This  is the                                                               
invention. This is who funded the  work. These are the people who                                                               
worked  on it.  2.  That becomes  declared intellectual  property                                                               
with a list of inventors. They  had about 30 inventors working on                                                               
this project.  3. From  that, the university  had the  ability to                                                               
license the technology. The company  licensed that technology and                                                               
worked with  the market to bring  revenue in. Funds come  back to                                                               
the university and the inventors through the licensing system.                                                                  
                                                                                                                                
8:30:25 AM                                                                                                                    
                                                                                                                                
DR.  WEBLEY described  two projects  of ACEP,  Alaska Center  for                                                               
Energy  and Power.  One is  the Grid  Bridging System  where ACEP                                                               
serves as a liaison to work  with utilities across the state. Mr.                                                               
Roe  will present  more on  this,  but it  is an  example of  the                                                               
university  helping  existing  companies   within  the  state  to                                                               
evaluate their  energy needs.  The second  example is  PuMA, Pump                                                               
Monitoring Apparatus, targeted at  householders to look at trends                                                               
in fuel use to evaluate when  energy use is higher than expected.                                                               
The  aim  is  savings  for   house  owners  by  bringing  in  new                                                               
technologies to smaller communities.                                                                                            
                                                                                                                                
DR. WEBLEY  said that  is only  a small overview  of some  of the                                                               
commercial capabilities  going on  at the  university. He  is one                                                               
example of  how academic research  can turn into a  company based                                                               
in Alaska.                                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSTON  said that she  is so excited  about this                                                               
because  the  state  has  never  gotten to  the  point  of  first                                                               
competition  and  then cooperation.  She  asked  about the  $14.7                                                               
million in  fixed costs on slide  2. She asked if  that above the                                                               
administrative  cost  of  the  research  grants,  what  does  the                                                               
university charge for research grants.                                                                                          
                                                                                                                                
DR. HINZMAN  asked if she was  referring to the rate  of overhead                                                               
to conduct the research.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOHNSTON answered yes.                                                                                           
                                                                                                                                
DR. HINZMAN  said that it depends  on the source of  the funding.                                                               
If  they are  conducting research  for the  state of  Alaska, the                                                               
rate  is 18  percent. If  they  are conducting  research for  the                                                               
National  Science  Foundation the  rate  is  something like  49.8                                                               
percent. It varies depending on  what the source allows. The rate                                                               
of overhead is determined every  three years through an agreement                                                               
with the Office of Naval Research.                                                                                              
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked if  the discussion about  the rate                                                               
of overhead includes the fixed costs or is that separate.                                                                       
                                                                                                                                
DR. HINZMAN  said the  fixed costs are  part of  the negotiations                                                               
with the Office  of Naval Research. The fixed  costs include fuel                                                               
costs,  maintenance,  upkeep,  janitorial,  electrical.  All  the                                                               
costs associated with running a  university have to be quantified                                                               
and negotiated with the Office of Naval Research.                                                                               
                                                                                                                                
REPRESENTATIVE JOHNSTON asked  if the $14.7 million  is just what                                                               
the state pays for fixed costs.                                                                                                 
                                                                                                                                
DR. HINZMAN  said the research  program does  not pay for  all of                                                               
the university.  The overhead  can only be  applied to  the fixed                                                               
costs  associated   with  executing  the  research   itself.  The                                                               
university provides  many other  services that  they do  need and                                                               
welcome state support for.                                                                                                      
                                                                                                                                
REPRESENTATIVE   JOHNSTON  asked   for   verification  that   the                                                               
university produces  the most publications  on the Arctic  in the                                                               
world.                                                                                                                          
                                                                                                                                
DR. HINZMAN answered yes.                                                                                                       
                                                                                                                                
REPRESENTATIVE  JOHNSTON asked  if that  is true  no matter  what                                                               
size the university, is it per capita.                                                                                          
                                                                                                                                
DR.  HINZMAN  said  the  university has  the  largest  number  of                                                               
publications in  any single year.  They did a  five-year analysis                                                               
since  the numbers  became  available. For  the  last decade  the                                                               
University of Alaska has been  the lead in publications on Arctic                                                               
research.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  JOHNSTON   asked  if   that  includes   ones  the                                                               
university has partnered with or is it sole.                                                                                    
                                                                                                                                
DR.  HINZMAN said  they do  collaborate  with other  institutions                                                               
around  the  world. If  a  University  of Alaska  researcher  was                                                               
included on the author list,  that is included in the publication                                                               
numbers.                                                                                                                        
                                                                                                                                
SENATOR HUGHES  referred to  the $1.6  million for  Contribute to                                                               
Alaska's Economic  Development on slide  15 of the FY19  Board of                                                               
Regents  budget request.  She prefaced  the  question by  stating                                                               
this is a big question and he may  not want to pin down a number.                                                               
She  asked,  in order  to  have  a  vision  of the  potential  of                                                               
commercialization  of research  for the  Alaska economy,  if they                                                               
were to  go all  in to  support this idea,  what amount  would be                                                               
needed.                                                                                                                         
                                                                                                                                
DR. WEBLEY  answered that he cannot  answer because he is  not an                                                               
economist but  research faculty.  He can  get the  information to                                                               
her from the director of  the Office of Intellectual Property. He                                                               
looks at it  for the personal connections and  personal growth it                                                               
would give  to the  state. It's  an area  of the  Alaskan economy                                                               
that  is untapped.  His was  the first  company developed  out of                                                               
university   intellectual   property    in   2013.   Five   other                                                               
entrepreneurs want  to do  that this  year. Once  these companies                                                               
form  they  can work  with  larger  Alaskan companies  and  large                                                               
companies outside  of the state.  It another way to  bring people                                                               
into the state who will stay  and grow the economy and become the                                                               
next generation of Alaskans.                                                                                                    
                                                                                                                                
SENATOR  HUGHES   said  she   is  drawn   by  the   potential  of                                                               
diversification for the  economy and they all  know how important                                                               
that is to the future of the state.                                                                                             
                                                                                                                                
DR.  HINZMAN   said  it  is   difficult  to  quantify   what  the                                                               
consequences, the upper  limits, are. He gave the  example of UAF                                                               
Professor [Kelly] Drew  who has done research  on hibernation and                                                               
who  is  working  with  drugs that  induce  hibernation.  If  the                                                               
metabolism of people  who have had heart attacks  or been injured                                                               
on the  battlefield can be slowed  down, the impact of  damage to                                                               
the  body can  be reduced.  The possible  consequences are  huge.                                                               
They do  not know what  the returns on  that could be.  They have                                                               
had interest  by NASA and  the European  space agency. This  is a                                                               
business that developed from Artic  science. The sky is the limit                                                               
of what could come from something like that.                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP commented  that historically,  there was  an                                                               
internal tug  of war  with the university  system. It  seems that                                                               
the university  has a  more unified approach,  which is  good for                                                               
the state nationally and for  aggressively advocating for funding                                                               
and  for projects.  It seems  that  there will  be more  students                                                               
attracted  to projects.  The slide  presentation highlighted  UAF                                                               
research  and publications,  but he  knows that  the UAA  has the                                                               
INNOVATE Award and brought the  National Science Foundation Board                                                               
to  Alaska for  the first  time two  years ago.  He asked  if Dr.                                                               
Hinzman is looking at a different  set of targets and metrics for                                                               
each research focus at each campus.  He asked how he is making it                                                               
so that there is synergy vs. not synergy.                                                                                       
                                                                                                                                
DR. HINZMAN said he agreed  with Representative Kopp 100 percent.                                                               
Increasing research capability across  the state raises all boats                                                               
and helps all  to become stronger. They've  had collaboration for                                                               
many   years   throughout   the  university   system   statewide,                                                               
particularly  in  medical  sciences  and  fisheries.  Since  they                                                               
started the Strategic  Pathways, they have invested  in trying to                                                               
quantify those metrics. A committee  is working on characterizing                                                               
metrics  that   would  allow  comparison  of   activities  across                                                               
campuses.  It is  designed  to see  where  resources are  needed,                                                               
where the best return on  investment is, where the best potential                                                               
for growth is.                                                                                                                  
                                                                                                                                
8:44:35 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND asked Dr. Hinzman  to describe the agreements with                                                               
the Office of Naval Research.                                                                                                   
                                                                                                                                
DR.  HINZMAN replied  that overhead  rates that  institutions are                                                               
allowed to charge are a  negotiated fee. The University of Alaska                                                               
has negotiated with the Office of  Naval Research for at least as                                                               
long  as he  has  been around,  30  or 40  years.  The rates  are                                                               
calculated upon what  the cost of doing business is.  It's a very                                                               
detailed process to provide the  evidence to quantify the cost of                                                               
all aspects  of research.  It's the  standard process  that every                                                               
university with  federal projects  must go  through. He  does not                                                               
know  why the  oversight entity  for UA  is the  Office of  Naval                                                               
Research.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  PARISH  said  the presentation  focused  on  Grow                                                               
World-class Research for $3.7 million  and Contribute to Alaska's                                                               
Economic  Development  for  $1.6   million  over  the  FY18  base                                                               
operating budget,  but there's another  $19 million in  the Board                                                               
of Regents budget  request. He asked whether he can  speak to the                                                               
impact if  the legislature just  gave the 5.3  million increment.                                                               
He asked  whether he could  still get  the full benefit  from the                                                               
$5.3   million  increment   or  would   underfunding  the   other                                                               
components interfere his mission.                                                                                               
                                                                                                                                
DR.  HINZMAN  said  the  amounts  on  the  chart,  Investment  by                                                               
Strategic Objective, on slide 15  are different components of the                                                               
budget   for   different  justifications.   Growing   world-class                                                               
research, for example,  has many components. One  is ADAC, Arctic                                                               
Domain Awareness Center,  out of UAA. The primary  sponsor is the                                                               
Department  of Homeland  Security.  The primary  customer is  the                                                               
Coast Guard. The purpose of ADAC  is to enable the Coast Guard to                                                               
be more functional in the Arctic.  One project is how to unload a                                                               
cruise ship rapidly  in the Arctic. Unfortunately,  ADAC does not                                                               
have  any base  funding. They  only have  Department of  Homeland                                                               
Security funding. Research programs like  this come and go. There                                                               
needs to be some type of  base funding to keep that entity whole.                                                               
If  that $3.7  million  were  not provided,  then  some of  those                                                               
programs  will be  lost. For  the  $2.1 million  in the  regents'                                                               
budget request for the UAF  Engineering Building Operating Costs,                                                               
much  of their  research work  is being  done in  the engineering                                                               
building, which is  a new building that is  not fully functioning                                                               
yet. They need  support to maintain the research  program in that                                                               
building. They  need utilities support  because utility  costs go                                                               
up.  The budget  is  very integrated.  The  resources brought  in                                                               
through research do  benefit the other components  of the campus,                                                               
but it  goes both ways.   The university is an  integrated whole.                                                               
They need all the components to  maintain their status as a fully                                                               
functioning university.                                                                                                         
                                                                                                                                
8:51:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSTON said  it  would be  interesting for  the                                                               
committee  to  have the  size  of  Department of  Defense  grants                                                               
coming into the university. Earlier  she had heard a comment that                                                               
the Office of  Naval Research may not be the  administrator of UA                                                               
grants in the future.                                                                                                           
                                                                                                                                
DR. HINZMAN  said he's  not involved in  the negotiations  of the                                                               
overhead rates.  The Department of  Defense (DOD)  has identified                                                               
the Arctic as  an area of heightened  strategic importance. There                                                               
is an incredible amount of activities  going on in the Artic. The                                                               
Department of  Defense has invited them  to a workshop in  May in                                                               
New Hampshire to identify what  capabilities they need to develop                                                               
to respond better  in the Arctic. The Air Force  has invited them                                                               
to a similar meeting in Seattle in May.                                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSTON said there is a partnership with Hawaii.                                                                
                                                                                                                                
DR.  HINZMAN  said  in  many  respects,  yes,  particularly  with                                                               
development and application of drones.                                                                                          
                                                                                                                                
REPRESENTATIVE  JOHNSTON  said  she's   sure  everyone  would  be                                                               
interested if there were a slide on it.                                                                                         
                                                                                                                                
REPRESENTATIVE  TALERICO  asked  Mr.  Roe to  go  over  the  Grid                                                               
Bridging System.                                                                                                                
                                                                                                                                
8:54:24 AM                                                                                                                    
                                                                                                                                
GEORGE  ROE,  Researcher, Alaska  Center  for  Energy and  Power,                                                               
Institute of  Northern Engineering, University  Alaska Fairbanks,                                                               
Fairbanks, Alaska,  said he was  a 36-year veteran of  the Boeing                                                               
Company. He came  to Alaska because of the  potential for working                                                               
on resilient  energy systems  that are  aligned with  what modern                                                               
aerospace  is doing.  Someone flying  on a  787 is  flying on  an                                                               
electrical   grid  that   has  all   the  functionality   of  the                                                               
communities of  Alaska and made  by the same  organizations. They                                                               
have opportunities  for helping  not just themselves,  but others                                                               
as they make systems that are reliable and resilient.                                                                           
                                                                                                                                
He said  they have  brought in  over $5 million  in the  last two                                                               
years from  the Office of Naval  Research which has been  used in                                                               
combination with  other organizations.  In aerospace there  is no                                                               
such thing as a stand-alone element.  A system is needed. That is                                                               
the same  for the  state of  Alaska. They  need to  work together                                                               
because  they are  up against  some challenging  things and  they                                                               
need to learn from each other, not compete.                                                                                     
                                                                                                                                
MR. ROE  said the Grid Bridging  System is a direct  request from                                                               
the Alaska  Village Electric Cooperative  to help  them integrate                                                               
renewable energy more effectively  and reduce diesel consumption.                                                               
There  are huge  opportunities for  replicating and  scaling this                                                               
with  the   58  communities  of   the  Alaska   Village  Electric                                                               
Cooperative.  He  is particularly  interested  in  the Rail  Belt                                                               
energy  system because  the state  has nested,  intertied, stand-                                                               
alone  systems   that  are   completely  representative   of  the                                                               
continental grid  in the  Lower 48.  They can be  a test  bed for                                                               
evaluating,  determining, and  developing  the  systems that  the                                                               
nation  needs, so  that when  events  happen, they  can stand  up                                                               
responses quickly  and minimize  the compromise that  results. He                                                               
believes Alaska  can be  a living  laboratory, as  Senator [Lisa]                                                               
Murkowski refers  to the  state, of the  nation's needs.  If they                                                               
can make  energy more affordable,  if they build  this innovation                                                               
culture, they  need to look  at the  communities in the  state to                                                               
build local capacity to make  sure students and local communities                                                               
have  what it  takes  to establish  businesses,  grow them,  etc.                                                               
There is so much they can do together.                                                                                          
                                                                                                                                
8:58:19 AM                                                                                                                    
                                                                                                                                
DR. HINZMAN  concluded by emphasizing  that research  helps drive                                                               
the  economy  and  increases   the  diversification  of  economic                                                               
activities. It provides a talented  and capable workforce. And as                                                               
their  [UA]  president   says,  a  great  state   needs  a  great                                                               
university.                                                                                                                     
                                                                                                                                
8:58:48 AM                                                                                                                    
                                                                                                                                
There being  no further business  to come before  the committees,                                                               
Chair  Drummond adjourned  the  joint meeting  of  the House  and                                                               
Senate Education Standing Committees at 8:58 a.m.                                                                               

Document Name Date/Time Subjects
23Feb2018_EDC_Presentation_UnivAK_Power_Of_Research.pdf HEDC 2/23/2018 8:00:00 AM
EDC_23Feb2018_Presentation_Power_of_Research_PresenterBios.pdf HEDC 2/23/2018 8:00:00 AM