04/05/2001 09:18 AM Senate FIN

                                                                                                                                
     SENATE BILL NO. 136                                                                                                        
     "An Act relating to resource development and to grants for the                                                             
     purpose of promoting resource development from appropriations                                                              
     of a portion of the revenue derived from the extraction of                                                                 
     certain state natural resources."                                                                                          
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Senator Austerman moved  for adoption of CS SB 136, 22-LS0083\S as a                                                            
work draft.                                                                                                                     
                                                                                                                                
PAT CARTER,  staff to Senator  Pearce, detailed  the changes  in the                                                            
committee substitute  made to address concerns voiced  by the Senate                                                            
Finance Committee.                                                                                                              
                                                                                                                                
Mr. Carter pointed  out the Resource Development Fund  and oversight                                                            
board  of  directors  were moved  from  the  Department  of  Natural                                                            
Resources   into   the  Department   of   Community   and   Economic                                                            
Development.  He explained  this would  reduce  the cost  associated                                                            
with administrating  and processing the grants since  the Department                                                            
of Community  and Economic  Development is  regularly involved  with                                                            
grant activities.                                                                                                               
                                                                                                                                
Mr. Carter informed that  in the committee substitute, 20 percent of                                                            
the  Resource  Development  Fund  would  be  allocated  to  the  New                                                            
Business Incentive  Fund, which he described as an  unfunded program                                                            
created several  years prior. He reminded  the Committee  the intent                                                            
of  the New  Business  Incentive Fund  is  to attract  companies  to                                                            
Alaska to "build on our resource base."                                                                                         
                                                                                                                                
Mr. Carter stated  that in an attempt to increase  the efficiency of                                                            
the Board,  the membership  is reduced from  seven to five  seats in                                                            
the committee  substitute.  He listed  the membership  seats as  one                                                            
held  by  the  commissioner  of  the  Department  of  Community  and                                                            
Economic   Development,    and   the   remaining   seats   held   by                                                            
representatives  of the resource industry,  one each from  forestry,                                                            
mining, oil and gas, appointed by the governor.                                                                                 
                                                                                                                                
Mr.  Carter  next told  of  a requirement  added  in  the  committee                                                            
substitute  stipulating  that  grants  are awarded  in  a  "matching                                                            
format". He explained  the grants would require matching  funds from                                                            
the recipient  to demonstrate that industry would  help support this                                                            
program.  He  noted  that  a  particular  match  percentage  is  not                                                            
established  in  the committee  substitute  because  some  companies                                                            
could contribute more then could others.                                                                                        
                                                                                                                                
Mr. Carter continued that  a grant limit of $500,000 is contained in                                                            
the committee  substitute. He commented this is because  of concerns                                                            
voiced that  any grant above this  amount should receive  a separate                                                            
legislative appropriation.                                                                                                      
                                                                                                                                
Mr. Carter  pointed  out that a  preference was  granted to  Alaskan                                                            
non-profit corporations in the committee substitute.                                                                            
                                                                                                                                
Mr.  Carter   also  noted  the  committee   substitute  includes   a                                                            
stipulation  that  the  funds could  not  be  used for  election  or                                                            
campaign purposes  or for specific lobbying efforts  at the state or                                                            
local level.                                                                                                                    
                                                                                                                                
Without  objection   the  committee  substitute,   version  "S"  was                                                            
ADOPTED.                                                                                                                        
                                                                                                                                
Senator Austerman  stated that his earlier concerns  were alleviated                                                            
with the changes made in the committee substitute.                                                                              
                                                                                                                                
Senator Green  asked if the grants could be awarded  to a for-profit                                                            
organization.                                                                                                                   
                                                                                                                                
Mr. Carter answered they could not under the current language.                                                                  
                                                                                                                                
Senator Green requested  an example of a non-profit corporation that                                                            
would receive the grants.                                                                                                       
                                                                                                                                
Mr. Carter  gave an  example of  the Miners  Association that  might                                                            
wish to perform a public  relations campaign to promote the industry                                                            
and   educate   about   substantial   improvements   to   production                                                            
procedures.                                                                                                                     
                                                                                                                                
Senator  Green  asked if  this  program  in any  way  duplicates  or                                                            
conflicts  with activities  of  the  Alaska Science  and  Technology                                                            
Foundation (ASTF) or other organizations.                                                                                       
                                                                                                                                
Mr. Carter  replied he  did not believe  so. He  shared that  it was                                                            
originally  considered  whether  the grants  would  be administered                                                             
through  the  ASTF. However  the  intent  of  this program  is  that                                                            
participants would not  be required to hire a grant writer, which is                                                            
required of most organizations currently working with the ASTF.                                                                 
                                                                                                                                
Senator  Hoffman asked  if there  was a  requirement  that the  non-                                                            
profit organizations expend  the grant funds to only promote generic                                                            
products.  Specifically,  he wanted to  know if  a grant to  promote                                                            
fish products could be used to promote salmon only.                                                                             
                                                                                                                                
Mr. Carter replied that  the language was drafted to be as simple as                                                            
possible.  He stated that  he had not considered  different  fishing                                                            
user groups.                                                                                                                    
                                                                                                                                
Senator  Austerman  asked if  this  legislation  excludes  fisheries                                                            
resources.                                                                                                                      
                                                                                                                                
Mr. Carter replied that  it does not. He explained that this program                                                            
is  not  specifically  intended  for  fisheries-related   industries                                                            
because  the Alaska  Seafood Marketing  Institute  (ASMI)  addresses                                                            
this resource.  He qualified  that the proposed  grant program  does                                                            
not exclude fisheries.                                                                                                          
                                                                                                                                
Senator Austerman  asked if  the revenue  from the fishing  industry                                                            
would be used to fund this program.                                                                                             
                                                                                                                                
Mr. Carter assured it does not and that general funds are used.                                                                 
                                                                                                                                
AT EASE 9:59 AM / 10:00 AM                                                                                                      
                                                                                                                                
Co-Chair Kelly ordered the bill HELD in Committee.                                                                              
                                                                                                                                
AT EASE 10:00 AM / 6:00 PM