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