05/02/1997 04:40 PM House FIN

  SENATE BILL 177                                                              
                                                                               
       "An  Act  relating  to  the  international  trade   and                 
       business  endowment;  and  providing for  an  effective                 
       date."                                                                  
                                                                               
  STEPHANIE SZYMANSKI,  STAFF, SENATOR DRUE  PEARCE, explained                 
  that the legislation would establish an  International Trade                 
  and Business Endowment in the  Alaska Science and Technology                 
  Foundation.   The principal and income of the endowment will                 
  be invested by the Permanent Fund Corporation and net income                 
  from  the  endowment will  be  held  in a  separate  account                 
  subject to appropriation by the Legislature.                                 
                                                                               
  The  intended purpose  of the  endowment income would  be to                 
  cover  a  portion  of  the  State's  annual  expenditure  on                 
  international trade  promotion.   In the  Senate version  of                 
  FY98  budget,  it  is  envisioned  that  the  Department  of                 
  Commerce and  Economic Development,  Division  of Trade  and                 
  Tourism's  international  trade staff  and  offices  and the                 
  World Trade Center would receive  support from the endowment                 
  income.                                                                      
                                                                               
  Ms. Szymanski concluded that keeping the Department's  trade                 
  specialists  and overseas  offices  fully  funded, the  bill                 
  would make sure  the State maintains the  longstanding links                 
  with key trading partners in Asia,  the Russian Far East and                 
  elsewhere.                                                                   
                                                                               
  Representative Martin suggested that in order to receive the                 
  maximum from our  money, it should  be placed in a  treasury                 
  rather than permanent fund.                                                  
                                                                               
  JEFF BUSH, DEPUTY  COMMISSIONER, DEPARTMENT OF COMMERCE  AND                 
  ECONOMIC  DEVELOPMENT,  replied   that  there  was   nothing                 
  scientific  about  placing  the  money  in   Alaska  Science                 
  Technology Foundation (ASTF); it was decided that this would                 
  be  a safe investment with  a large foundation, and invested                 
  by the  permanent fund.   Placing  the money  was an  add-on                 
  investment in a simple way.  He acknowledged that there is a                 
  trade off with which the fund would be faced and the changes                 
  that  it will  bring.   The Department has  been comfortable                 
  with  the  permanent fund  investments  over the  years, and                 
  would be investing some money there.                                         
                                                                               
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  Mr.  Bush, in response  to Representative  Martin, explained                 
  that the money would be earned and then set-up in an account                 
  within ASTF.  It  would then be subject by  an appropriation                 
  to the Department for international trade efforts.  It would                 
  be a separately  maintained fund.   Mr. Bush noted that  the                 
  Department is in support of the bill.   He added that Alaska                 
  Center  for International  Business  (ACIB) recognizes  that                 
  there has  been  discussion regarding  the over-lapping  and                 
  lack of coordination in international trade activities.  The                 
  Administration  sees  the  bill  as   an  effort  to  better                 
  coordinate those activities.                                                 
                                                                               
  (Tape Change HFC 97-120, Side 2).                                            
                                                                               
  Mr. Bush suggested  that the  merger would  create a  better                 
  international trade  organization.  ACIB  has done a  lot of                 
  international  trade research,  whereas, the  Department has                 
  done  a lot of international  trade activities over the past                 
  years, in which they  have used ACIB for research.   To have                 
  the two groups  working together will better  coordinate the                 
  research, providing a more stable funding source.                            
                                                                               
  Representative  Martin  MOVED  to  report   SB  177  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  SB   177   was   reported   out   of  Committee   with   "no                 
  recommendation"  and  with  fiscal  notes  by the  Statewide                 
  Budget Office, the  Department of Revenue dated  4/28/97 and                 
  the Department  of Commerce and  Economic Development  dated                 
  4/22/97.