Alaska

Economic policy

The Alaska Industrial Development and Energy Authority (AIDEA), a public corporation of the state created, provides long-term financing for capital investments and loans for most commercial and industrial activities, including manufacturing, small business, tourism, mining, commercial fishing, and other enterprises. In 1985 its mission was extended to provide financing for infrastructural projects to support private enterprise in Alaska. In 2002, a prominent example of the latter was the Delong Mountain Transportation System, a 52-mile rail system built to support the Red Dog lead and zinc mine. In 2000, economic development projects included the Gateway Alaska project that undertook reconstruction of the Ted Stevens Anchorage International Airport and surrounding roads. The Diamond Center Hotel in south Anchorage, begun in 2000 and completed in 2002, and to be operated by the Seldovia Native Association (SNA) and to feature native art, was financed with the help of the AIDEA. Under the AIDEA's Conduit Revenue Bond Program, designed to facilitate access to the state bond market, Hope Community Resources in 2002 was able to borrow to expand its facilities for providing services for the developmentally disabled. In 1999 the Rural Development Initiative Fund, created in 1992 to help small businesses not eligible for traditional commercial finance, was transferred to the AIDEA where, in 2002, it was being restructured to improve finance options for small business. The AIDEA also has oversight over the Alaska Energy Authority which was created in 1976 and which has responsibility for two major programs, the Alaska Rural Energy Plan and the Statewide Energy Plan. The rural population poses a challenge to economic development of the state, which the state government has begun to address by broadening the utilities infrastructure and by subsidizing energy costs. For the ten years 1992 to 2002, the AIDEA claimed credit for helping to create 3,400 permanent jobs and 3,700 temporary jobs, and for helping to mobilize about $222 million for business finance. The Alaska Science and Technology Foundation (ASTF), created in 1988, has as its mission the improvement of the state economy through investments in science and technology. Due to state budget problems, an original appropriation of $10.5 million for the ASTF was reduced to $5.8 for FY2003. The state imposes no taxes on income, sales, gross receipts or inventories. It offers an investment tax credit for the development of gas-processing projects and for the mining of minerals and other natural deposits, except oil and gas.