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