03/16/1993 01:55 PM Senate L&C

  SENATOR KELLY  announced SB 154  ECONOMIC DEVELOPMENT  GRANT                 
  FUND to be up for consideration.                                             
                                                                               
  SENATOR JACKO  explained that  essentially this  legislation                 
  creates  a program within the capital  budget to address the                 
  needs for economic  development in municipalities.   It also                 
  establishes the qualifying criteria.                                         
                                                                               
  SENATOR  PEARCE  said  she  wanted  to  make sure  that  the                 
  regional port authorities and other instrumentalities of the                 
  state or municipality would be able  to own the projects and                 
  facilities.                                                                  
                                                                               
  Number 285                                                                   
                                                                               
  SHELBY STASTNY, Director, OMB, said this legislation fills a                 
  need we don't have in our current capitol funding structure.                 
                                                                               
                                                                               
  MR. STASTNY said they wanted to make  sure that the owner of                 
  the assets  was a  government entity  that has  been elected                 
  (for  accountability).  The   Department  of  Commerce   and                 
  Economic  Development would  also  need  the opportunity  to                 
  evaluate  the  project.    If  the projects  are  determined                 
  feasible  by the administration, then  it would be placed in                 
  the  governor's   capital  budget   and  forwarded  to   the                 
  legislature for further consideration, he explained.                         
                                                                               
  Number 260                                                                   
                                                                               
  SENATOR  KELLY  said  the  definition  of  a  local  elected                 
  community council made  him nervous,  because there were  so                 
  many.  MR.  STASTNY said the elected representative  for the                 
  community making the proposal was their intention.                           
                                                                               
  SENATOR JACKO said he had  discussed the proposed amendments                 
  with Mr.  Stastny earlier and didn't have  any problems with                 
  them.                                                                        
                                                                               
  SENATOR  KELLY  said  he would  have  his  staff  work on  a                 
  committee substitute and bring it back before the committee.                 
                                                                               
  Number 324                                                                   
                                                                               
  SENATOR  LINCOLN  said  there  was  one  extra step  in  the                 
  amendments where it  goes through the  Governor and then  to                 
  the legislature and in  the original bill it didn't  have to                 
  go through the Governor.   She wanted this extra step to  be                 
  looked at closely.                                                           
                                                                               
  SENATOR  SALO asked if all the amendments were adopted would                 
                                                                               
                                                                               
  the new positions  still be in  the Department of  Commerce.                 
  MR.  STASTNY  answered   that  he   had  checked  with   the                 
  Commissioner  of the  Department  of  Commerce and  Economic                 
  Development who said it could be administered with available                 
  staff.                                                                       
                                                                               
  SENATOR  SALO asked if  that meant the bill  would have a $0                 
  fiscal note.  MR.  STASTNY said he didn't think  there would                 
  be  a  need  for  funding,  but  wanted to  check  with  the                 
  Department of Administration before saying so for sure.                      
                                                                               
  SENATOR RIEGER  asked about  the $2000  application fee  and                 
  what the annual volume through this fund might be.                           
                                                                               
  Number 367                                                                   
                                                                               
  COMMISSIONER FUHS  said they  expected it  would take  extra                 
  staff to  do this  and included  an application  fee so  the                 
  money would not  come from the  general fund.   The fee  was                 
  fairly  arbitrary, he  added.   They  wanted  a high  enough                 
  figure to make sure people  were fairly serious about  their                 
  proposals.  He expected to get  between 30 - 50 applications                 
  a year.  He  explained there would be a prioritized  list of                 
  the economic development opportunities which would be funded                 
  depending on how much money was in the capital budget.   The                 
  money has to be appropriated by the legislature in any given                 
  year.                                                                        
                                                                               
  Number 384                                                                   
                                                                               
  SENATOR RIEGER asked if he  was contemplating a differential                 
  in matching requirements.  COMMISSIONER FUHS said the higher                 
  the  match,  the more  points people  would  get on  a point                 
  system.  This is not structured the same as capital matching                 
  grants.                                                                      
                                                                               
  SENATOR LINCOLN said  she wanted it  made clear that  "sweat                 
  equity" could  be used  for the  match and  not just  money.                 
  COMMISSIONER FUHS found no problem with that.                                
                                                                               
  SENATOR  JACKO  pointed  out that  this  legislation  is not                 
  intended to replace the Governor's  capital match program or                 
  any of the other capital project  programs that are in place                 
  right now.                                                                   
                                                                               
  Number 420                                                                   
                                                                               
  SENATOR   PEARCE   asked  Edgar   Blatchford,  Commissioner,                 
  Department of Community  and Regional Affairs, what  was the                 
  maximum  amount  of the  small  grants his  department does?                 
  COMMISSIONER BLATCHFORD explained  there were two grant/loan                 
  programs within his department, the federal program with its                 
  complicated requirements  and  the  smaller  state  program.                 
  Although  there is an  economic twist to  the application in                 
                                                                               
                                                                               
  the  federal process, they are  still obligated to look also                 
  at community based projects.  The amount of requests exceeds                 
  by about 20  times the amount  of money available (about  $2                 
  million).   The  small state program  is for  small economic                 
  enterprises in rural Alaska.                                                 
                                                                               
  SENATOR RIEGER said with  an economic grant fund  like this,                 
  it seemed like the legislature should be able to appropriate                 
  money to the fund allocating it  for certain projects.  Then                 
  the Department would be obligated to follow the allocations.