Legislature(1999 - 2000)

01/14/2000 01:40 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
GENERAL SUBJECT(S):  REVIEW OF DEPARTMENTS ACCOMPLISHMENTS                                                                      
    ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT                                                                                    
     AUTHORITY (AIDEA)                                                                                                          
    DEPARTMENT OF LAW                                                                                                           
    ALASKA SCIENCE AND TECHNOLOGY FOUNDATION                                                                                    
                                                                                                                                
The following overview was taken in log note format.  Tapes and                                                                 
handouts will be on file with the House Finance Committee through the                                                           
21st Legislative Session, contact 465-2156. After the 21st Legislative                                                          
Session they will be available through the Legislative Library at 465-                                                          
3808.                                                                                                                           
                                                                                                                                
Time Meeting Convened: 1:40 P.M.                                                                                                
                                                                                                                                
Tape(s):   HFC 00 - 7, Side 1                                                                                                   
  HFC 00 - 7, Side 2                                                                                                            
  HFC 00 - 8, Side 1                                                                                                            
                                                                                                                                
                                                                                                                                
PRESENT:                                                                                                                        
X                                                                                                                               
Representative G. Davis                                                                                                         
X                                                                                                                               
Co-Chair Therriault                                                                                                             
X                                                                                                                               
Representative Foster                                                                                                           
X                                                                                                                               
Co-Chair Mulder                                                                                                                 
X                                                                                                                               
Representative Grussendorf                                                                                                      
X                                                                                                                               
Vice Chair Bunde                                                                                                                
X                                                                                                                               
Representative Moses                                                                                                            
X                                                                                                                               
Representative Austerman                                                                                                        
X                                                                                                                               
Representative Phillips                                                                                                         
X                                                                                                                               
Representative J. Davies                                                                                                        
                                                                                                                                
Representative Williams                                                                                                         
                                                                                                                                
ALSO PRESENT:  RANDY SIMMONS, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL                                                             
DEVELOPMENT AND EXPORT AUTHORITY, DEPARTMENT OF COMMUNITY AND                                                                   
ECONOMIC DEVELOPMENT (TELECONFERENCED; BARBARA RITCHIE, DEPUTY                                                                  
ATTORNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF LAW; DEAN GUANELI,                                                              
CHIEF ASSISTANT ATTORNEY GENERAL, LEGAL SERVICES SECTION, DEPARTMENT                                                            
OF LAW; KATHRYN DAUGHHETEE, DIRECTOR, DIVISION OF ADMINISTRATIVE                                                                
SERVICES, DEPARTMENT OF LAW; JAMES KENWORTHY, PHD, EXECUTIVE                                                                    
DIRECTOR, SCIENCE AND TECHNOLOGY FOUNDATION, DEPARTMENT OF COMMUNITY                                                            
AND ECONOMIC DEVELOPMENT, ANCHORAGE (TELECONFERENCED); MARK                                                                     
BENDERSKY, GROUP PROJECTS ADMINISTRATOR, ALASKA SCIENCE AND                                                                     
TECHNOLOGY FOUNDATION, DEPARTMENT OF COMMUNITY AND ECONOMIC                                                                     
DEVELOPMENT.                                                                                                                    
                                                                                                                                
LOG                                                                                                                             
SPEAKER                                                                                                                         
DISCUSSION                                                                                                                      
                                                                                                                                
TAPE HFC 00 - 7                                                                                                                 
SIDE 1                                                                                                                          
                                                                                                                                
                                                                                                                                
000                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Co-Chair Mulder convened the House                                                                                              
Finance Committee meeting at 1:40 P.M.                                                                                          
                                                                                                                                
                                                                                                                                
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT                                                                                        
AUTHORITY (AIDEA)                                                                                                               
93                                                                                                                              
RANDY SIMMONS,                                                                                                                  
EXECUTIVE DIRECTOR,                                                                                                             
ALASKA INDUSTRIAL                                                                                                               
DEVELOPMENT AND                                                                                                                 
EXPORT AUTHORITY,                                                                                                               
DEPARTMENT OF                                                                                                                   
COMMUNITY AND                                                                                                                   
ECONOMIC DEVELOPMENT                                                                                                            
(TELECONFERENCED)                                                                                                               
Spoke to the handout which was                                                                                                  
distributed to Committee members.  [Copy                                                                                        
on File].  He addressed the mission                                                                                             
statement noting that the role of AIDEA                                                                                         
in the State of Alaska is to encourage                                                                                          
economic development and diversification                                                                                        
in Alaska - thereby creating or retaining                                                                                       
jobs in Alaska's economy by providing                                                                                           
various means of financing and assistance                                                                                       
to businesses in Alaska.                                                                                                        
240                                                                                                                             
MR. SIMMONS                                                                                                                     
Spoke to the goals of AIDEA.                                                                                                    
                                                                                                                                
MR. SIMMONS                                                                                                                     
1. Provide business-financing assistance                                                                                        
throughout Alaska through AIDEA's                                                                                               
Credit programs by participating in                                                                                             
or guaranteeing bank originated                                                                                                 
loans.                                                                                                                          
2. Continue to develop, operate and                                                                                             
maintain AIDEA-owned development                                                                                                
projects that support private sector                                                                                            
investment and create or maintain                                                                                               
jobs for Alaskans.                                                                                                              
360                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Questioned AIDEA's credit rating and how                                                                                        
that would effect the State's                                                                                                   
credibility.                                                                                                                    
388                                                                                                                             
MR. SIMMONS                                                                                                                     
Stated that the State would not be                                                                                              
affected by that credit rating.  He                                                                                             
referenced Page 4 of the handout which                                                                                          
outlines AIDEA's programs.                                                                                                      
He noted that Page 5 outlines the                                                                                               
strategies and recent accomplishments of                                                                                        
AIDEA.  AIDEA provided approximately $40                                                                                        
million dollars in financing with                                                                                               
financial institutions to support and                                                                                           
diversify Alaska's economy; participate                                                                                         
or guarantee $5 million dollars in small                                                                                        
rural loans and assist, participate or                                                                                          
guarantee $3 million dollars in export-                                                                                         
related financing.  Additionally, the                                                                                           
strategy is to create at least 350 new                                                                                          
jobs for Alaskans by providing financial                                                                                        
assistance to economic development                                                                                              
projects that meet defined criteria for                                                                                         
feasibility and financial success.                                                                                              
640                                                                                                                             
MR. SIMMONS                                                                                                                     
Continued, the second strategy actually                                                                                         
produced 180 new jobs in FY99.  All                                                                                             
tolled, new projects should total 850 new                                                                                       
jobs within the State this year.  The                                                                                           
Ketchikan shipyard alone will facilitate                                                                                        
80 new direct jobs at that facility.                                                                                            
769                                                                                                                             
MR. SIMMONS                                                                                                                     
Spoke to the mining expansion of the Red                                                                                        
Dog mine which created 100 new jobs.                                                                                            
803                                                                                                                             
REPRESENTATIVE                                                                                                                  
FOSTER                                                                                                                          
Questioned if $80 million had been                                                                                              
authorized two years ago.                                                                                                       
820                                                                                                                             
MR. SIMMONS                                                                                                                     
Reported that project had not yet been                                                                                          
started.  It was recognized that a better                                                                                       
facility would be a deepwater port. He                                                                                          
pointed out that AIDEA is researching                                                                                           
other monies for that project.  If                                                                                              
successful, AIDEA  will pay for the                                                                                             
initial dredging.                                                                                                               
884                                                                                                                             
MR. SIMMONS                                                                                                                     
The next project is the Healy Clean Coal                                                                                        
Project proving the technology and                                                                                              
producing emissions substantially below                                                                                         
permit requirements.                                                                                                            
941                                                                                                                             
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Pointed out that it is claimed that it                                                                                          
takes more people than projected to                                                                                             
operate the plant.                                                                                                              
973                                                                                                                             
MR. SIMMONS                                                                                                                     
Commented that AIDEA has been operating                                                                                         
the plant and that the quality of the                                                                                           
coal has provided an inconclusive test.                                                                                         
1049                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Inquired if the plant would continue to                                                                                         
operate with the current lawsuits.                                                                                              
1078                                                                                                                            
MR. SIMMONS                                                                                                                     
Acknowledged that the agency has been                                                                                           
informed that the plant should not                                                                                              
operate during the time of the lawsuit.                                                                                         
1105                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Questioned if any other agencies had                                                                                            
requested to operate it.                                                                                                        
1123                                                                                                                            
MR. SIMMONS                                                                                                                     
Explained that the price of power was                                                                                           
increasing in the Railbelt areas and that                                                                                       
the short-term answer is "no".  He added                                                                                        
that it is expected that this plant will                                                                                        
be more costly to operate than the                                                                                              
Railbelt power for approximately 9 years.                                                                                       
1185                                                                                                                            
CO-CHAIR THERRIAULT                                                                                                             
Asked what was scheduled to happen with                                                                                         
the bond payback.                                                                                                               
1198                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that the bonds will be paid off                                                                                         
and that "who pays" will be decided                                                                                             
through the lawsuit.                                                                                                            
1214                                                                                                                            
MR. SIMMONS                                                                                                                     
The last project is the Snettisham                                                                                              
Hydroelectric project.  That project was                                                                                        
brought in under budget and slightly                                                                                            
ahead of schedule. Four submarine cables                                                                                        
for the project were successfully                                                                                               
installed.  The savings resulted in an                                                                                          
electrical rate reduction.                                                                                                      
1265                                                                                                                            
MR. SIMMONS                                                                                                                     
Stated that the third strategy would                                                                                            
increase efficiencies and provide a                                                                                             
return to the general fund.                                                                                                     
1289                                                                                                                            
MR. SIMMONS                                                                                                                     
The strategy has provided a $18 million                                                                                         
dividend to the General Fund for FY00,                                                                                          
and declared an $18.5 million dollar                                                                                            
dividend for FY01.  Additionally, it                                                                                            
created a partnership with banks and the                                                                                        
private sector, amended regulations to                                                                                          
eliminate archaic requirements in AIDEA's                                                                                       
Credit programs.                                                                                                                
1342                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Inquired where the Polaris Fund fit into                                                                                        
this scheme.                                                                                                                    
1356                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that that fund was created in                                                                                           
1993, which was a capitalization venture.                                                                                       
As a result from mergers in investment                                                                                          
capital, they picked up AOL and Preview                                                                                         
Travel.  Out of the $6 million dollar                                                                                           
investment, the State still has about                                                                                           
$500 thousand dollars remaining in that                                                                                         
fund.                                                                                                                           
1434                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Understood that the fund was to be used                                                                                         
for venture capitalist within the State.                                                                                        
1450                                                                                                                            
MR. SIMMONS                                                                                                                     
Agreed that the fund did not accomplish                                                                                         
what it was intended to do.                                                                                                     
1462                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Clarified that he understood that at the                                                                                        
time of the purchase, it was a good move                                                                                        
for the State.                                                                                                                  
1479                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked who was the manager of that fund                                                                                          
now.                                                                                                                            
1490                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that the fund was managed by Jim                                                                                        
Yarmon in Anchorage, however, was based                                                                                         
outside the State.                                                                                                              
1503                                                                                                                            
MR. SIMMONS                                                                                                                     
Pointed out that AIDEA employees now run                                                                                        
Alaska Energy Authority (AEA). AEA's                                                                                            
mission is to operate and maintain                                                                                              
existing state-owned power projects that                                                                                        
tap Alaska's natural resources to achieve                                                                                       
the lowest reasonable consumer power                                                                                            
costs; and assist in the development of                                                                                         
safe, reliable and effective energy                                                                                             
systems throughout Alaska that are                                                                                              
financially viable and environmentally                                                                                          
sound.   AEA consists of two sections,                                                                                          
the large projects and the rural                                                                                                
projects.                                                                                                                       
1565                                                                                                                            
MR. SIMMONS                                                                                                                     
Spoke to the large projects referencing                                                                                         
Page 9 of the handout.                                                                                                          
1. maintained and administered AEA's $1                                                                                         
billion facilities, maximizing                                                                                                  
services and revenues and minimizing                                                                                            
unscheduled outages.                                                                                                            
2. Lake Tyee hydroelectric project.                                                                                             
3. Inspected and completed Terror Lake                                                                                          
tunnel repairs.                                                                                                                 
4. Installed spill containment and                                                                                              
updated procedures for the Four Dam                                                                                             
Pool projects.                                                                                                                  
5. Continued to administer outstanding                                                                                          
AEA long-term debt in excess of $300                                                                                            
million dollars and continued to                                                                                                
administer special trust funds                                                                                                  
related to the facilities.                                                                                                      
6. Refinanced Bradley Lake Hydroelectric                                                                                        
long-term debt, providing                                                                                                       
approximately $3.3 million dollars in                                                                                           
savings to the Railbelt utilities.                                                                                              
1675                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Asked if a resolution was closer for the                                                                                        
transference of the Four Dam Pool.                                                                                              
1691                                                                                                                            
MR. SIMMONS                                                                                                                     
Acknowledged that there is an offer on                                                                                          
paper for that facility.  That community                                                                                        
is offering $60 million dollars in cash                                                                                         
on closing and would remove all the                                                                                             
liabilities.  He also noted that there is                                                                                       
a private sector company that is willing                                                                                        
to pay $80 million dollars cash.                                                                                                
1735                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Asked who that company was.                                                                                                     
1739                                                                                                                            
MR. SIMMONS                                                                                                                     
Stated that the communities in that area                                                                                        
have first option and that their offer is                                                                                       
a viable offer.  The private sector has                                                                                         
only submitted a Letter of Interest.                                                                                            
1783                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked if that offer was from the Gravel                                                                                         
Group.                                                                                                                          
1797                                                                                                                            
MR. SIMMONS                                                                                                                     
Noted that it was not.  It was put                                                                                              
forward by a private group from down in                                                                                         
the lower 48 and that they had hired Mr.                                                                                        
Gravel to help with the deal.                                                                                                   
1821                                                                                                                            
MR. SIMMONS                                                                                                                     
Addressed the rural energy program and                                                                                          
its' accomplishments.                                                                                                           
1. Acquired a $10 million dollar grant                                                                                          
from the Denali Commission to upgrade                                                                                           
bulk fuel storage projects.                                                                                                     
2. Completed bulk fuel storage projects                                                                                         
and upgrades in 13 communities                                                                                                  
totaling $8.9 million.                                                                                                          
3. Continued to design work on 22 bulk                                                                                          
fuel projects totaling $23.6 million                                                                                            
with a projected construction date of                                                                                           
2001.                                                                                                                           
1906                                                                                                                            
REPRESENTATIVE                                                                                                                  
FOSTER                                                                                                                          
Requested a list of those communities                                                                                           
affected.                                                                                                                       
1919                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Inquired how well was the circuit rider                                                                                         
program working.                                                                                                                
1937                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked how the improvements would be                                                                                             
measured.                                                                                                                       
1958                                                                                                                            
MR. SIMMONS                                                                                                                     
Offered to provide that information at a                                                                                        
later date to Committee members.  He                                                                                            
explained that there is a rural plan at                                                                                         
this time which is assessing the rural                                                                                          
energy segment of the plan which will                                                                                           
guarantee that the money requested will                                                                                         
go to the community with the highest                                                                                            
need.  That information will be                                                                                                 
continually upgraded.                                                                                                           
2002                                                                                                                            
REPRESENTATIVE                                                                                                                  
FOSTER                                                                                                                          
Questioned if this would be a continuing                                                                                        
priority.                                                                                                                       
2015                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that for safety issues, the                                                                                             
problems will be in the $200 million                                                                                            
dollar range and that the rural power                                                                                           
system upgrades are more difficult to                                                                                           
determine.  He acknowledged that there                                                                                          
are safety problems in those areas.                                                                                             
2062                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Advised that the Denali Commission                                                                                              
participation had been $43 million                                                                                              
dollars.                                                                                                                        
2076                                                                                                                            
REPRESENTATIVE                                                                                                                  
FOSTER                                                                                                                          
Referenced the photo in the handout.                                                                                            
2089                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Asked the measurement used to determine                                                                                         
how efficient these programs are.                                                                                               
2107                                                                                                                            
MR. SIMMONS                                                                                                                     
Agreed that information is important.                                                                                           
2118                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Reminded members that 10 years ago, the                                                                                         
total amount needed to address these                                                                                            
concerns was $250 million dollars.                                                                                              
2136                                                                                                                            
MR. SIMMONS                                                                                                                     
Agreed that was the correct number at                                                                                           
that time.                                                                                                                      
2156                                                                                                                            
REPRESENTATIVE                                                                                                                  
FOSTER                                                                                                                          
Asked what happened to the Mark Air                                                                                             
hangar.                                                                                                                         
2167                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that during the period of                                                                                               
bankruptcy, AIDEA acquired back those                                                                                           
facilities.  They have been slowly sold                                                                                         
off.  There has been a loss of $2 million                                                                                       
dollars from monies collected on those                                                                                          
facilities.  He added that only 2.69% of                                                                                        
the AIDEA portfolio is in the delinquency                                                                                       
rate.                                                                                                                           
2234                                                                                                                            
REPRESENTATIVE                                                                                                                  
AUSTERMAN                                                                                                                       
Advised that the Kodiak hangar facility                                                                                         
was deteriorating and becoming dangerous.                                                                                       
2252                                                                                                                            
MR. SIMMONS                                                                                                                     
Replied that AIDEA has been negotiating                                                                                         
with the City of Kodiak to purchase that                                                                                        
facility.  It is worth less than it was,                                                                                        
but it still has value.                                                                                                         
2274                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Questioned the idea of the loss on the                                                                                          
Kodiak facility.                                                                                                                
2296                                                                                                                            
MR. SIMMONS                                                                                                                     
Explained how the selling of securities                                                                                         
are listed on the books.                                                                                                        
2350                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Recommended using language "additional                                                                                          
loss" as it would provide better clarity                                                                                        
on these issues.                                                                                                                
2360                                                                                                                            
MR. SIMMONS                                                                                                                     
Reiterated that to date, AIDEA has taken                                                                                        
a $2 million dollar loss on the Mark Air                                                                                        
closure.                                                                                                                        
                                                                                                                                
TAPE HFC 00 - 7                                                                                                                 
SIDE 2                                                                                                                          
                                                                                                                                
000                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Invited AIDEA to work closely with the                                                                                          
Subcommittee.                                                                                                                   
                                                                                                                                
                                                                                                                                
DEPARTMENT OF LAW                                                                                                               
071                                                                                                                             
BARBARA RITCHIE,                                                                                                                
DEPUTY ATTORNEY                                                                                                                 
GENERAL, CIVIL                                                                                                                  
DIVISION, DEPARTMENT                                                                                                            
OF LAW                                                                                                                          
Referenced the handout.  [Copy on File].                                                                                        
Ms. Ritchie noted that the mission of the                                                                                       
Department of Law was to protect the                                                                                            
State's sovereignty; prosecute crime;                                                                                           
represent and advise the State in all                                                                                           
civil matters; and provide other legal                                                                                          
services to State government.  She added                                                                                        
that the mission of the Civil Division of                                                                                       
the Department of Law was to:                                                                                                   
1. Protect the human, financial, and                                                                                            
natural resources of the State by                                                                                               
providing legal advice, prosecution                                                                                             
and defense; and                                                                                                                
2. The state's sovereignty and                                                                                                  
guarantees of statehood.                                                                                                        
250                                                                                                                             
MS. RITCHIE                                                                                                                     
She added that the Division protects the                                                                                        
public interest through mediating public                                                                                        
disputes.  It is a challenge to balancing                                                                                       
of the public's interests.                                                                                                      
418                                                                                                                             
MS. RITCHIE                                                                                                                     
Addressed the performance measures of the                                                                                       
Department.  She noted that SB 169                                                                                              
contained mission statements for the                                                                                            
Department.  She believed that the                                                                                              
Criminal Judgements area will meet the                                                                                          
established target of $3 million dollars.                                                                                       
In child support division, the Department                                                                                       
has been able to address about 800 cases.                                                                                       
The backlog is being addressed and there                                                                                        
is a better handle on the situation.                                                                                            
623                                                                                                                             
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Questioned how that measure was                                                                                                 
established.                                                                                                                    
661                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Noted that these measures were                                                                                                  
established internally and that they                                                                                            
would be worked on in the Subcommittee                                                                                          
level.                                                                                                                          
699                                                                                                                             
MS. RITCHIE                                                                                                                     
Added that those were criminal fines and                                                                                        
that there are other ways to measure                                                                                            
success.                                                                                                                        
730                                                                                                                             
MS. RITCHIE                                                                                                                     
Stressed that this area contains a high                                                                                         
volume of cases and that the Department                                                                                         
is working more closely with the Division                                                                                       
of Child Support Enforcement to avoid                                                                                           
litigation so as to better address the                                                                                          
situation.                                                                                                                      
832                                                                                                                             
CO-CHAIR MULDER                                                                                                                 
Inquired what percentage of the whole was                                                                                       
being addressed.                                                                                                                
850                                                                                                                             
MS. RITCHIE                                                                                                                     
Explained that completion means reaching                                                                                        
a result.  Initially, it was intended to                                                                                        
mean 15% above the 688-target level.  She                                                                                       
acknowledged that the Department is                                                                                             
attempting to reach 800.                                                                                                        
896                                                                                                                             
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked what does resolve mean.                                                                                                   
910                                                                                                                             
MS. RITCHIE                                                                                                                     
Explained that it depends on the type of                                                                                        
case.                                                                                                                           
1009                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Commented that is not a satisfactory                                                                                            
measure and that there needs to be a                                                                                            
completion number provided.                                                                                                     
1037                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Agreed that the goal will differ from the                                                                                       
practical possibilities.  He added that a                                                                                       
percentage could show a more reasonable                                                                                         
number.                                                                                                                         
1097                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Asked how many child support arrears had                                                                                        
been submitted to the Department from the                                                                                       
total number that exists.                                                                                                       
1129                                                                                                                            
MS. RITCHIE                                                                                                                     
Did not know that answer.                                                                                                       
1161                                                                                                                            
VICE CHAIR BUNDE                                                                                                                
Asked the average length of a time it                                                                                           
took to reach each settlement.                                                                                                  
1229                                                                                                                            
MS. RITCHIE                                                                                                                     
Spoke to the concern that Vice Chair                                                                                            
Bunde voiced regarding the loss of the                                                                                          
Katie John case and the loss of State                                                                                           
sovereignty.  She stated that it would be                                                                                       
premature to say that case was lost.  The                                                                                       
Court has taken action in pending                                                                                               
subsistence cases and understood that                                                                                           
this is an appealable order.  The judge                                                                                         
has taken appropriate action.                                                                                                   
1323                                                                                                                            
REPRESENTATIVE                                                                                                                  
GRUSSENDORF                                                                                                                     
Noted that the case referenced by Vice                                                                                          
Chair Bunde was one of many cases and                                                                                           
that the State has won most of them.                                                                                            
1356                                                                                                                            
MS. RITCHIE                                                                                                                     
Replied that there are many issues being                                                                                        
addressed through a series of cases.                                                                                            
Judge Holland requested to deal with that                                                                                       
case and that the Department is actively                                                                                        
litigating.                                                                                                                     
1431                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
The legislation has had a sterling                                                                                              
record. He stressed that this is a tough                                                                                        
issue.                                                                                                                          
1435                                                                                                                            
MS. RITCHIE                                                                                                                     
Acknowledged that it would be helpful to                                                                                        
have a context for the numbers and to                                                                                           
significantly reduce the amount of time                                                                                         
before action. There has been greater                                                                                           
focusing on the meeting deadlines. The                                                                                          
direct access to Child Support                                                                                                  
Enforcement Division computer system has                                                                                        
helped the Department and that the                                                                                              
internal case management systems has                                                                                            
allowed better case management and review                                                                                       
of the caseload.                                                                                                                
1523                                                                                                                            
MS. RITCHIE                                                                                                                     
Spoke to the accomplishments in other                                                                                           
areas. She noted that the $180 thousand                                                                                         
dollars of statutory designated program                                                                                         
receipts for consumer protection has                                                                                            
aided services and the development of a                                                                                         
consumer complaint package. She added                                                                                           
that a web page will be in place in the                                                                                         
next week with links to other information                                                                                       
sources.                                                                                                                        
1676                                                                                                                            
MS. RITCHIE                                                                                                                     
Spoke to working with new car dealers for                                                                                       
advisory approach to business practices.                                                                                        
Ms. Ritchie stated that discount                                                                                                
advertisements can be misleading and that                                                                                       
the new and used car dealers will receive                                                                                       
the advisory.                                                                                                                   
1757                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Observed that this would be a good                                                                                              
approach.                                                                                                                       
1772                                                                                                                            
MS. RITCHIE                                                                                                                     
Discussed the South East-Alaska propane                                                                                         
anti-trust case. Consumers will receive a                                                                                       
payment for overpayment reimbursements.                                                                                         
Ms. Ritchie discussed other cases                                                                                               
relating to the anti-trust case. She                                                                                            
pointed out the Safeway purchase of                                                                                             
Alaskan stores and how that was relative.                                                                                       
1894                                                                                                                            
MS. RITCHIE                                                                                                                     
Spoke to gas price investigation. The                                                                                           
Department has found that Alaska has the                                                                                        
highest tax excluded from gas prices in                                                                                         
the nation. This realization has lead to                                                                                        
litigation against several oil companies.                                                                                       
1982                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Reminded members that the Department's                                                                                          
intent to develop a web page, resulting                                                                                         
from the BP/Arco merger.                                                                                                        
2020                                                                                                                            
MS. RITCHIE                                                                                                                     
Stated that was not so. The BP/Arco                                                                                             
merger did not affect the web page.                                                                                             
2044                                                                                                                            
MS. RITCHIE                                                                                                                     
Continued, with additional resources, the                                                                                       
caseload per attorney has been brought to                                                                                       
50-70 cases in child support area. She                                                                                          
acknowledged that coordination with other                                                                                       
agencies has improved, and that the                                                                                             
Department's emphasis is on getting                                                                                             
backlogs through the system.                                                                                                    
2108                                                                                                                            
MS. RITCHIE                                                                                                                     
Spoke to the cases on Statehood defense                                                                                         
located in Glacier Bay and the Tongass.                                                                                         
2124                                                                                                                            
DEAN GUANELI, CHIEF                                                                                                             
ASSISTANT ATTORNEY                                                                                                              
GENERAL, CRIMINAL                                                                                                               
DIVISION, DEPARTMENT                                                                                                            
OF LAW                                                                                                                          
Explained that the Criminal Division does                                                                                       
not have investigators. There are three                                                                                         
stages of cases for that Division.  The                                                                                         
first type are those that come from the                                                                                         
police.                                                                                                                         
The mission of the Criminal Division is                                                                                         
to:                                                                                                                             
1. Prosecute crime;                                                                                                             
2. Uphold convictions through appellate                                                                                         
and post-conviction proceedings and                                                                                             
3. Provide effective representation for                                                                                         
state criminal justice agencies.                                                                                                
2250                                                                                                                            
MR. GUANELI                                                                                                                     
Noted that the number of violent crime                                                                                          
cases has decreased.  However, one area                                                                                         
which has not dropped is that of drug                                                                                           
offenses.  That area has increased and it                                                                                       
does spill over into other areas of                                                                                             
crime.                                                                                                                          
He listed some of the accomplishments for                                                                                       
the Criminal Division:                                                                                                          
1. A program has been started by a                                                                                              
nurse in Homer to addresses sexual                                                                                              
assaults;                                                                                                                       
2. Applied for scholarships for                                                                                                 
specialized training;                                                                                                           
3. Federal funding for the violence                                                                                             
against women act;                                                                                                              
4. Volunteer program started in the                                                                                             
office which acts as a good public                                                                                              
relations tool.                                                                                                                 
                                                                                                                                
TAPE HFC 00 - 8                                                                                                                 
SIDE 1                                                                                                                          
                                                                                                                                
000                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Commented that publics measures success                                                                                         
with a given timeline.  He asked the                                                                                            
benchmark for the average misdemeanor.                                                                                          
084                                                                                                                             
MR. GUANELI                                                                                                                     
Agreed that observation should be looked                                                                                        
at.  He added that the public defense and                                                                                       
finances determine when a case gets                                                                                             
addressed.                                                                                                                      
143                                                                                                                             
VICE CHAIR BUNDE                                                                                                                
Asked about power point                                                                                                         
165                                                                                                                             
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Noted that the more laws made, the more                                                                                         
prisoners there will be.  He commented                                                                                          
that whatever the Legislature passes,                                                                                           
causes more work on the prison system.                                                                                          
225                                                                                                                             
                                                                                                                                
ALASKA SCIENCE AND TECHNOLOGY                                                                                                   
297                                                                                                                             
MR. BENDERSKY, GROUP                                                                                                            
PROJECT MANAGER,                                                                                                                
ALASKA SCIENCE AND                                                                                                              
TECHNOLOGY                                                                                                                      
FOUNDATION,                                                                                                                     
DEPARTMENT OF                                                                                                                   
COMMUNITY AND                                                                                                                   
ECONOMIC DEVELOPMENT                                                                                                            
Provided a handout to Committee members.                                                                                        
[Copy on File].  He referenced the                                                                                              
handout.  The mission of the Alaska                                                                                             
Science and Technology Foundation (ASTF)                                                                                        
is to build an entrepreneurial Alaska                                                                                           
economy through the development and                                                                                             
application of science and technology.                                                                                          
417                                                                                                                             
MR. BENDERSKY                                                                                                                   
Addressed the ASTF programs:                                                                                                    
1. Small individual grants                                                                                                      
($20,000/less)                                                                                                                  
2. Major individual grants                                                                                                      
(greater than $20,000)                                                                                                          
3. Group project grants                                                                                                         
4. Direct grants to teachers (up to                                                                                             
$5000)                                                                                                                          
5. Small Business Innovation Research                                                                                           
(SBIR) bridging grants (up to                                                                                                   
$50,000)                                                                                                                        
He stated that these programs contribute                                                                                        
to the mission by providing matching                                                                                            
financing to projects, growing companies,                                                                                       
and by growing infrastructure for an                                                                                            
entrepreneurial economy.                                                                                                        
534                                                                                                                             
MR. BENDERSKY                                                                                                                   
Touched upon the accomplishment of the                                                                                          
grantees:                                                                                                                       
1. Fishing and aquaculture                                                                                                      
2. Mining                                                                                                                       
3. Petroleum Products                                                                                                           
4. Forests and Forest Products                                                                                                  
5. Agricultural Products                                                                                                        
6. Public Health and Safety                                                                                                     
654                                                                                                                             
MR. BENDERSKY                                                                                                                   
Spoke to the first accomplishment which                                                                                         
has developed longer salmon shelf life                                                                                          
with sodium chlorite-implementation                                                                                             
planned by Alaska Seafood International                                                                                         
and processors.  Also, demonstrated                                                                                             
longer salmon shelf life with ozone-                                                                                            
working with processors and Department of                                                                                       
Environmental Conservation for permits.                                                                                         
ASTF has demonstrated salmon pin-bone                                                                                           
removal machines and sold 150 thousand                                                                                          
pounds of boneless fillets.                                                                                                     
Demonstrated fisheries sonar capable of                                                                                         
improved detection and species and size                                                                                         
determination.  Demonstrated high                                                                                               
survival rate of oyster seed at Kachemak                                                                                        
Bay nursery and the development of                                                                                              
technology to produce feedstocks for                                                                                            
scallops, geoducks, and cockles.                                                                                                
774                                                                                                                             
MR. BENDERSKY                                                                                                                   
Spoke to the second accomplishment:  the                                                                                        
Aeromap demonstrated desktop tool to                                                                                            
interpret data; Anchorage glass recycling                                                                                       
center; and the developing improved                                                                                             
scientific basis for interpreting total                                                                                         
dissolved solids water quality standards.                                                                                       
881                                                                                                                             
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Asked about the SPAT.                                                                                                           
886                                                                                                                             
JAMIE KENWORTHY,                                                                                                                
EXECUTIVE DIRECTOR,                                                                                                             
ALASKA SCIENCE AND                                                                                                              
TECHNOLOGY                                                                                                                      
FOUNDATION,                                                                                                                     
DEPARTMENT OF                                                                                                                   
COMMUNITY AND                                                                                                                   
ECONOMIC DEVELOPMENT                                                                                                            
(TELECONFERENCE)                                                                                                                
Explained the way the production seed was                                                                                       
grown for farm planting which then cuts                                                                                         
the mortality rate.                                                                                                             
937                                                                                                                             
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Commented that the State can grow their                                                                                         
own seed now.                                                                                                                   
951                                                                                                                             
DR. KENWORTHY                                                                                                                   
Agreed.                                                                                                                         
960                                                                                                                             
MR. BENDERSKY                                                                                                                   
Spoke to the third accomplishment of                                                                                            
petroleum products:                                                                                                             
Demonstrated in Valdez new chemical                                                                                             
process to desulfurize diesel fuel to                                                                                           
meet stricter EPA standards.                                                                                                    
995                                                                                                                             
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked where the graders were located.                                                                                           
1008                                                                                                                            
DR. KENWORTHY                                                                                                                   
Replied that they were located in Eagle                                                                                         
River.  There was 700 million board feet                                                                                        
imported into Alaska last year.                                                                                                 
1058                                                                                                                            
DR. KENWORTHY                                                                                                                   
Spoke to the places where the spruce                                                                                            
beetle project would happen in the State.                                                                                       
1088                                                                                                                            
REPRESENTATIVE                                                                                                                  
PHILLIPS                                                                                                                        
Asked why the project was scheduled for                                                                                         
Kenai.  She noted that 90% of the trees                                                                                         
there were dead from that disease.                                                                                              
1111                                                                                                                            
MR. BENDERSKY                                                                                                                   
Addressed the accomplishment of the                                                                                             
agricultural products.                                                                                                          
Alaska Fresh Cut products now selling in                                                                                        
Alaska supermarkets and increasing demand                                                                                       
for mat-Su products;                                                                                                            
Demonstrated chipability of Alaskan                                                                                             
potatoes for potential Alaskan potato                                                                                           
chip manufacturing.                                                                                                             
1199                                                                                                                            
MR. BENDERSKY                                                                                                                   
Spoke to the accomplishments to the                                                                                             
public health and safety component:                                                                                             
Put live video camera pictures of rural                                                                                         
airstrips on Internet for weather                                                                                               
observation/safety;                                                                                                             
Received EPA approval of bear repellent,                                                                                        
now on the market;                                                                                                              
Demonstrated a biotechnology based test                                                                                         
for immediate detection of paralytic                                                                                            
shellfish poisoning.                                                                                                            
1336                                                                                                                            
DR. KENWORTHY                                                                                                                   
Spoke of the requirement for the test                                                                                           
kits to become commercial.                                                                                                      
1356                                                                                                                            
REPRESENTATIVE J.                                                                                                               
DAVIES                                                                                                                          
Asked who would be the intended customers                                                                                       
for this product.                                                                                                               
1371                                                                                                                            
DR. KENWORTHY                                                                                                                   
Replied that processors or local                                                                                                
residents could purchase it.  He                                                                                                
acknowledged that it would be a simple                                                                                          
test kit tool.                                                                                                                  
1408                                                                                                                            
REPRESENTATIVE                                                                                                                  
GRUSSENDORF                                                                                                                     
Believed that the sports clam digger                                                                                            
could use it, but he could not imagine                                                                                          
how it would be used commercially.                                                                                              
1434                                                                                                                            
MR. BENDERSKY                                                                                                                   
Spoke to other accomplishment of the                                                                                            
agency.                                                                                                                         
1. Alaska Growth Capital program                                                                                                
2. Completed construction financing of                                                                                          
Kodiak Launch Facility                                                                                                          
3. Net Day                                                                                                                      
4. Assisted Seward, Homer and Kenai                                                                                             
science museums to deliver science                                                                                              
resources via the internet                                                                                                      
5. Direct grants to additional 56                                                                                               
Science and Math Teachers.                                                                                                      
1507                                                                                                                            
MR. BENDERSKY                                                                                                                   
Explained the strategies and priorities                                                                                         
that will be different for FY2001.                                                                                              
1532                                                                                                                            
MR. BENDERSKY                                                                                                                   
Did not believe that there was                                                                                                  
duplication between agencies.  He stated                                                                                        
that in the short term, there are no                                                                                            
other viable options.  ASTF has made some                                                                                       
investments in BIDCO and Alaska InvestNet                                                                                       
so as to increase the capability of the                                                                                         
private sector to do early-stage pre-                                                                                           
bankable technology and resource                                                                                                
processing deals.                                                                                                               
1611                                                                                                                            
REPRESENTATIVE                                                                                                                  
GRUSSENDORF                                                                                                                     
Referenced the 1995 survey which resulted                                                                                       
with only, a 55% response.                                                                                                      
1637                                                                                                                            
MR. BENDERSKY                                                                                                                   
Indicated that the agency does have a                                                                                           
"good idea" of what the other 45% had                                                                                           
accomplished.                                                                                                                   
1661                                                                                                                            
REPRESENTATIVE                                                                                                                  
GRUSSENDORF                                                                                                                     
Suggested that there should be another                                                                                          
category for legislative interest.                                                                                              
1676                                                                                                                            
MR. BENDERSKY                                                                                                                   
Recommended that perhaps there should be                                                                                        
more outreach.                                                                                                                  
1688                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
He asked if ARDORS was attempting to                                                                                            
assist in some of the expansion.                                                                                                
1715                                                                                                                            
DR. KENWORTHY                                                                                                                   
Explained that there are a number of                                                                                            
firms which provide support.  ASTFA has a                                                                                       
specific interest and referral on                                                                                               
products.  There is a website that helps                                                                                        
to give applicants guidelines to                                                                                                
determine which resources they should                                                                                           
take advantage of which helps to                                                                                                
effectively serve people.                                                                                                       
1783                                                                                                                            
REPRESENTATIVE G.                                                                                                               
DAVIS                                                                                                                           
Asked if there was a participation of the                                                                                       
bone-extension project.                                                                                                         
1800                                                                                                                            
DR. KENWORTHY                                                                                                                   
Stated that project failed commercially                                                                                         
because of the degree it was capitalized.                                                                                       
1824                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
Voiced appreciation to the agency for the                                                                                       
work that they had accomplished.                                                                                                
1911                                                                                                                            
CO-CHAIR MULDER                                                                                                                 
ADJOURNMENT                                                                                                                     
                                                                                                                                
The meeting adjourned at 3:50 P.M.                                                                                              
                                                                                                                                
HOUSE FINANCE COMMITTEE                                                                                                         
LOG NOTES                                                                                                                       
January 14, 2000                                                                                                                
                                                                                                                                
                                                                                                                                
H.F.C.     14     1/14/00                                                                                                       
                                                                                                                                
                                                                                                                                

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