HB 117 is being proposed in response to A Special Report on the Department of Commerce and Economic Development, Alaska Science and Technology Foundation, Grant Procedures; completed by Legislative Budget and Audit (084589-99) and released September 30, 1998.

The purpose of the audit was to determine the adequacy and reasonableness of ASTF grant procedures, both as they applied to grant proposals in general, and to determine if assets purchased with ASTF grant funds are disposed of at the end of the grant in an appropriate manner.

HB 117 forces the ASTF to comply with some of the findings and recommendations of the September 30, 1998 audit. This proposed legislation would allow board members to perform peer reviews of grant proposals under $20,000 by board members if the board members are recognized as impartial experts in the relevant areas. Currently, ASTF only submits grant proposals over $20,000 for peer review from board members.

HB 117 also requires the state to take a security interest in patents, copyrights and other intellectual properties that are developed as part of the grant project. Under this provision the grantees also must submit an annual certified financial statement until repayment (if required by grant provisions) of the grant has occurred (see audit recommendation # 3).

This proposed legislation would help the Alaska Science and Technology Foundation move forward using good business practices. The work that the Foundation does is important to Alaska and its future. However the ASTF is overseeing large amounts of state money and must be accountable. Good business practices will assure a strong future for the Alaska Science and Technology Foundation.

Thank you for your consideration of the legislation. I urge the committee's favorable response.