Legislature(2017 - 2018)HOUSE FINANCE 519

03/30/2017 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 137                                                                                                            
     "An Act  redesignating the Alaska State  Council on the                                                                    
     Arts   as  a   public   corporation  and   governmental                                                                    
     instrumentality of  the state; defining the  powers and                                                                    
     duties  of  the  Alaska  State  Council  on  the  Arts;                                                                    
     providing  exemptions  from  certain statutes  for  the                                                                    
     Alaska  State Council  on the  Arts; making  conforming                                                                    
     amendments; and providing for an effective date."                                                                          
3:27:59 PM                                                                                                                    
KRISTIN KRANENDONK, STAFF, REPRESENTATIVE HARRIET DRUMMOND,                                                                     
read from prepared remarks.                                                                                                     
     House  Bill  137   quasi-privatizes  the  Alaska  State                                                                    
     Council on  the Arts  (ASCA) by  restructuring it  as a                                                                    
     public  corporation  in  order  to  help  the  ASCA  to                                                                    
     continue  its work  with self-employed  Alaskan artists                                                                    
     and  art  businesses  during these  challenging  fiscal                                                                    
     times. This new status will  allow the ASCA to increase                                                                    
     its  ability to  leverage  funds from  non-governmental                                                                    
     contributors and better adapt  to the shifting economic                                                                    
     This  bill  adds  Alaska  State  Council  on  the  Arts                                                                  
     employees  to  exempt  employee status.  Currently  the                                                                  
     ASCA  has 4  full  time employees,  and Rep  Drummond's                                                                  
     office  reached out  to those  employees and  they were                                                                  
     all  supportive  of  this change.  This  section  makes                                                                  
     those employees exempt from the State Personnel Act.                                                                       
     The bill  adds artists' submission made  in response to                                                                    
     an  inquiry  initiated  by  the ASCA  to  the  list  of                                                                    
     records that  are exempt  from public  inspection. This                                                                    
     does not include artists awarded a commission however.                                                                     
     The bill adds appropriate  board member language needed                                                                    
     to  create "trustees"  since  the  corporation will  be                                                                    
     governed  by  a  board  of trustees.  And  it  replaces                                                                    
     language that  entitles trustees  to be  reimbursed for                                                                    
     travel expenses  at the same  rate as members  of other                                                                    
     state boards.                                                                                                              
     HB137 also adds "literary  arts" as a field represented                                                                    
     within the board  and replaces "educational" objectives                                                                    
     with  "strategic"  objections  as  it  relates  to  the                                                                    
     councils ability to enter into contracts.                                                                                  
     Other   changes  include   exemption  from   the  State                                                                    
     Procurement  Code, while  still  providing for  formal,                                                                    
     appropriate    procurement    protocols    for    ASCA.                                                                    
     Restructuring will  keep ASCA's operating  budget under                                                                    
     the   Executive    Budget   Act   for    openness   and                                                                    
     transparency.  Transition  language will  allow  ASCA's                                                                    
     advisory  committees,  and   the  public  process  will                                                                    
     remain in  place as ASCA administers  grants, programs,                                                                    
     and services.                                                                                                              
     Finally there  is transition language in  the bill that                                                                    
     will also allow Council members  to remain on the board                                                                    
     until their  term is over  and allow  current employees                                                                    
     to remain on staff.                                                                                                        
     The  effective date  for this  legislation  is July  1,                                                                    
     The State Council  on the Arts wants to  ensure that it                                                                    
     is in a position to  expand its important work to serve                                                                    
     all  Alaskans. Private  funders across  the nation  are                                                                    
     increasingly   approaching  ASCA   to  offer   support.                                                                    
     Carefully  considered  restructuring efforts  have  the                                                                    
     potential  to   allow  the   Council  to   advance  the                                                                    
     opportunity to  grow the development  base, as  well as                                                                    
     reduce its reliance on State funds.                                                                                        
     HB137  will  improve  the ability  of  the  Council  to                                                                    
     leverage  non-state  funding   and  represents  a  real                                                                    
     opportunity to  realign ASCA to  better perform  in the                                                                    
     environment which exists in Alaska today.                                                                                  
3:32:13 PM                                                                                                                    
BEN BROWN, CHAIR,  ALASKA STATE COUNCIL ON  THE ARTS, agreed                                                                    
with Ms.  Kranendonk's remarks. He elaborated  that the bill                                                                    
represented over a  year's efforts by all of  the members of                                                                    
the council and staff,  and partners at Rasmussen Foundation                                                                    
and other  foundation partners. He believed  the legislation                                                                    
was carefully crafted.                                                                                                          
Co-Chair Foster OPENED public testimony.                                                                                        
ALICE  BIOFF,  KAWERAK,  INC.,  NOME  (via  teleconference),                                                                    
spoke  in  support  of  the legislation.  She  read  from  a                                                                    
prepared statement:                                                                                                             
     Dear Honorable Committee Chair and Committee members,                                                                      
     My  name  is Alice  Bioff,  resident  of Nome,  Alaska,                                                                    
     currently  employed  at  Kawerak, Inc.  and  an  Alaska                                                                    
     State Council on the Arts  (ASCA) council member. Thank                                                                    
     you all  for the opportunity  to testify in  support of                                                                    
     HB137. I am testifying today  in my capacity as an ASCA                                                                    
     council  member. I  am a  tribal member  of the  Native                                                                    
     Village of  Koyuk, and  grew up there  and in  Nome. My                                                                    
     family and I have lived in  Nome for the last 17 years.                                                                    
     For  much  of  that  time,  I  have  been  employed  by                                                                    
     Kawerak,   Inc.,   the   regional   Native   non-profit                                                                    
     consortium of  tribes for the Bering  Strait region, as                                                                    
     a Business Planning Specialist.                                                                                            
     Through  our work  here at  Kawerak, I  am honored  and                                                                    
     privileged  to work  with  artist entrepreneurs  within                                                                    
     our   communities.   We    provide   direct   technical                                                                    
     assistance  offering  tools  and  resources  to  assist                                                                    
     artists continue  their work  so that they  can sustain                                                                    
     themselves,  their families  and their  communities. It                                                                    
     is through  this work  that I  have seen  firsthand how                                                                    
     important  it   is  for  these  artists   who  live  in                                                                    
     communities    with    very     few    resources    and                                                                    
     infrastructure,  to   grow  their   businesses  through                                                                    
     opportunities  such  as  those  that  become  available                                                                    
     through ASCA and others.                                                                                                   
     Artist Entrepreneurs  are economic  development drivers                                                                    
     in their  communities and the  Alaska State  Council on                                                                    
     the Arts supports these  communities through their work                                                                    
     and  advocacy. With  their partnerships,  resources and                                                                    
     programs,   we  see   a   bright   future  and   growth                                                                    
     opportunity to support all artists across the State.                                                                       
     Through  the  restructuring  initiative,  we  see  ASCA                                                                    
     services  continued  and  strengthened to  support  the                                                                    
     artists through  improved ability  to react  to funding                                                                    
     opportunities   and  better   represent,  support   and                                                                    
     advance the artists by offering  the tools and services                                                                    
     needed to strengthen an  already existing and important                                                                    
     economy.   This  is   critical  to   strengthening  and                                                                    
     sustaining  our  rural  communities  in  this  fiscally                                                                    
     challenging time.                                                                                                          
     HB137 streamlines the process  ASCA will use to present                                                                    
     opportunities  to artists  all  over Alaska,  including                                                                    
     those artists  we have  worked with  for years  here in                                                                    
     the  Bering Strait  region. From  my perspective,  this                                                                    
     will  be  a great  benefit  for  all artists  including                                                                    
     those in rural Alaska.                                                                                                     
3:36:09 PM                                                                                                                    
ANDREA  NOBLE-PELANT,   EXECUTIVE  DIRECTOR,   ALASKA  STATE                                                                    
COUNCIL  ON  THE  ARTS, EAGLE  RIVER  (via  teleconference),                                                                    
testified  in support  of the  legislation. She  shared that                                                                    
she was a council member for  11 years. She offered that the                                                                    
council's  purpose  was  to  support  and  advance  Alaska's                                                                    
creative  industries and  its  cultural infrastructure.  She                                                                    
believed a  thriving arts community created  a ripple effect                                                                    
around the  state and connected the  population. The council                                                                    
was  in   existence  for   51  years   and  was   ready  for                                                                    
organizational  change.  She  noted that  Alaska's  creative                                                                    
industries was  growing due to  targeted public  and private                                                                    
investment in  the state's cultural infrastructure  over the                                                                    
past  10   years,  experiencing   rapid  growth   in  grants                                                                    
programs,  and  public  private  partnerships.  The  council                                                                    
worked  on national  and international  levels on  projects,                                                                    
initiatives,  and policies  through  arts organizations.  In                                                                    
addition,  the  council  provided  professional  development                                                                    
throughout the  state. She commented  that the  bill enabled                                                                    
the council's  staff to manage  projects in a  timely manner                                                                    
and   increased   its   work    across   sectors   such   as                                                                    
transportation,   healthcare,   economic  development,   and                                                                    
tourism. She  mentioned that  the council's  mission evolved                                                                    
to "expand  access to  arts experiences;"  art as  a process                                                                    
versus  art as  a  product. The  council's programs  reached                                                                    
military  service  members  for   treatment  of  PTSD  (Post                                                                    
Traumatic  Stress  Disorder)  and  incarcerated  individuals                                                                    
learning  how to  create art  for post-release  success. The                                                                    
council assisted  teachers who wanted  to live and  teach in                                                                    
rural   communities   and   provided  children   and   youth                                                                    
opportunities  to  learn  through   arts  and  culture.  She                                                                    
related that HB 137 allowed  the council to be responsive in                                                                    
implementing projects that affected  its performance and the                                                                    
ability to  seek and secure private  funding. She emphasized                                                                    
that  the  council  worked  with partners  and  all  of  the                                                                    
revenues  from the  funders was  funneled back  into Alaskan                                                                    
communities in the form of grants, programs, and resources.                                                                     
3:40:08 PM                                                                                                                    
Ms.  Noble-Pelant provided  the list  of partners  including                                                                    
the  Rasmussen  Foundation,  the  Alaska  Arts  and  Culture                                                                    
Foundation,  Atwood Foundation,  National Endowment  for the                                                                    
Arts, Margaret A Cargill  Philanthropy, the SERI Foundation,                                                                    
SeaAlaska  Heritage  Institute,   Alaska  Humanities  Forum,                                                                    
Western  States Arts  Federation, and  the American  for the                                                                    
Co-Chair Foster CLOSED public testimony.                                                                                        
Representative Wilson  asked about required  matching funds.                                                                    
She asked for  evidence on whether matching funds  had to be                                                                    
GF.  Mr. Brown  answered in  the affirmative  and emphasized                                                                    
that the provision  was laid out in federal  code. He termed                                                                    
it  as "black  letter law."  He  relayed that  the state  of                                                                    
Kanas  eliminated  their  state match  and  ultimately  lost                                                                    
their  entire federal  grant. He  reported that  the council                                                                    
discussed ways to increase its  earned income that qualified                                                                    
as a state  match. He exemplified a license  plate bill from                                                                    
the previous session that included  a provision for the arts                                                                    
license plates.  The council currently had  a design contest                                                                    
for Alaskans  to design license  plates and then  sell them,                                                                    
although he did  not anticipate a large  revenue stream from                                                                    
the venture. However, it was  an example of program receipts                                                                    
that  can offset  the state  matching  funds. He  maintained                                                                    
that  private  match  money will  not  work.  Representative                                                                    
Wilson had asked the question  because she thought that some                                                                    
additional  federal dollars  were available  that the  state                                                                    
was not  receiving. Mr. Brown  replied that  the partnership                                                                    
agreement was  for a  three-year period  and the  amount was                                                                    
determined  by  the  National Endowment  for  the  Arts.  In                                                                    
addition, the council  sought merit-based competitive funds.                                                                    
He  specified  that  programs  like   Poetry  Out  Loud  and                                                                    
Creative Forces  did not require matching  funds. He assured                                                                    
the  committee  that  the  council had  done  very  well  in                                                                    
attaining funding of  all types and that  the council "would                                                                    
never leave a federal dollar on the table."                                                                                     
3:44:47 PM                                                                                                                    
Representative Pruitt asked whether  the council was able to                                                                    
utilize  private funds  to receive  more federal  funds. Mr.                                                                    
Brown responded that  over half of the  council's budget was                                                                    
derived  from  private foundation  money  and  the rest  was                                                                    
state  appropriation and  NEA match.  Any private  money was                                                                    
used over and above the funding to support its mission.                                                                         
Representative  Kawasaki asked  whether the  council was  at                                                                    
the  maximum  federal match.  Mr.  Brown  answered that  the                                                                    
council was at  "the right amount." He  elucidated that some                                                                    
states  appropriated  more  than  necessary.  Representative                                                                    
Kawasaki  asked for  verification  that the  bill would  not                                                                    
jeopardize  any  of  the National  Endowment  for  the  Arts                                                                    
match.  Mr.  Brown  replied  that  the  funds  were  not  in                                                                    
jeopardy  and assured  the committee  that he  confirmed the                                                                    
matter with the NEA.                                                                                                            
Representative  Kawasaki asked  whether  it  was typical  or                                                                    
necessary  for states  to  have a  council  or committee  to                                                                    
receive NEA funding. Mr. Brown  answered in the affirmative.                                                                    
He  elaborated that  the  state  had to  have  some sort  of                                                                    
council  containing public  members  and  within the  larger                                                                    
mandate,  states did  it differently.  Alaska  would be  the                                                                    
first state  with a  quasi-private corporation.  He reported                                                                    
that  other states  were watching  Alaska  with interest  in                                                                    
adopting  the idea.  He thought  that the  bill could  set a                                                                    
positive example for the rest of country.                                                                                       
HB  137  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair  Seaton addressed  the schedule  for the  following                                                                    

Document Name Date/Time Subjects
HB137 Supporting Document Brown.pdf HFIN 3/30/2017 1:30:00 PM
HB 137
HB137 Letter of Support Kawerak.pdf HFIN 3/30/2017 1:30:00 PM
HB 137
HB137 Sectional 3.3.17.pdf HFIN 3/30/2017 1:30:00 PM
HB 137
HB137 Sponsor 3.3.17.pdf HFIN 3/30/2017 1:30:00 PM
HB 137
HB137 Supporting Document Alaska Public Media.pdf HFIN 3/30/2017 1:30:00 PM
HB 137
HB115 Supporting Document - Draw Limit Matrix CS SB 26 (3.29.17 DOR).pdf HFIN 3/30/2017 1:30:00 PM
HB 115
SB 26
HB 115 Fiscal Note Packet.pdf HFIN 3/30/2017 1:30:00 PM
HB 115
HB 115 DOC Response to House Finance HB 115 Fiscal Note Questions.pdf HFIN 3/30/2017 1:30:00 PM
HB 115