Legislature(2017 - 2018)SENATE FINANCE 532

04/13/2017 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ HB 137 ST. COUNCIL ON THE ARTS: PUBLIC CORP. TELECONFERENCED
Moved SCS HB 137(FIN) Out of Committee
+= SB 78 PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY TELECONFERENCED
Moved CSSB 78(FIN) Out of Committee
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."                                                                          
                                                                                                                                
9:18:59 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon read  the  bill title  for  HB 137  (see                                                                    
above). She recalled that the  committee heard the companion                                                                    
bill,  SB  66, on  March  24,  2018.  She invited  the  bill                                                                    
sponsor to the table.                                                                                                           
                                                                                                                                
REPRESENTATIVE HARRIET  DRUMMOND, SPONSOR, informed  that HB
137  was sponsored  by the  House  Education Committee.  The                                                                    
committee  had  unanimously   consented  to  sponsoring  the                                                                    
legislation  as  a  committee  bill.  It  passed  the  House                                                                    
unanimously. She read a portion of the sponsor statement:                                                                       
                                                                                                                                
     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                                                                    
     climate.                                                                                                                   
                                                                                                                                
Representative Drummond  understood that the  Senate Finance                                                                    
Committee had already  heard the Senate version  of the bill                                                                    
and  would not  go into  detail  about the  bill unless  the                                                                    
chair directed her to.                                                                                                          
                                                                                                                                
Senator von  Imhof asked  if there was  a difference  in the                                                                    
two bills.                                                                                                                      
                                                                                                                                
KRISTEN KRANENDONK, STAFF,  REPRESENTATIVE HARRIET DRUMMOND,                                                                    
stated that  the version before  the committee was  the same                                                                    
as the  Senate version.  However, she thought  the committee                                                                    
had an amendment to offer.                                                                                                      
                                                                                                                                
Senator  Olson noted  Representative  Drummond's mention  of                                                                    
quasi-privatization.  He  asked if  she  had  looked at  any                                                                    
other places to receive funds  aside from the private sector                                                                    
allowed by the bill.                                                                                                            
                                                                                                                                
Representative  Drummond deferred  to  the  Chairman of  the                                                                    
State Council on the Arts.                                                                                                      
                                                                                                                                
9:22:00 AM                                                                                                                    
                                                                                                                                
BENJAMIN  BROWN, CHAIR,  STATE COUNCIL  ON THE  ARTS, stated                                                                    
that  there were  earned  income  opportunities and  program                                                                    
receipts such  as the license  plate program that  passed in                                                                    
the  prior  year. There  would  be  a two-round  competitive                                                                    
process to select a license  plate to celebrate the arts. He                                                                    
opined the project would generate  funds. He had also talked                                                                    
with  other  legislators,  including Senator  Hughes,  about                                                                    
other  ways  of looking  for  earned  income. He  noted  the                                                                    
possibility of using  the temporary art bank  to provide art                                                                    
to  non-governmental offices  for compensation.  In addition                                                                    
to  asking  for foundation  funds,  the  council saw  earned                                                                    
income as a possibility going forward.                                                                                          
                                                                                                                                
Senator Olson asked  if Mr. Brown could  discuss whether the                                                                    
loan   program  was   something  the   council  planned   on                                                                    
participating in.                                                                                                               
                                                                                                                                
Mr. Brown did not know of  any other state that had a public                                                                    
art bank  that used it as  a service to the  private sector.                                                                    
However, it was certainly  something the council was willing                                                                    
to  look at.  He thought  the problem  was that  the private                                                                    
sector was  not seeking  to expend  funds on  decorating its                                                                    
buildings  in the  current  economic  climate. He  suggested                                                                    
that it  was possible in  the future.  He was hoping  to use                                                                    
the  resources  from the  National  Assembly  of State  Arts                                                                    
Agency to  see if  there was an  example from  another state                                                                    
Alaska could replicate.                                                                                                         
                                                                                                                                
Senator Olson asked about the  program receipts and asked if                                                                    
the council  was competing with  any other entities  for the                                                                    
program receipts.                                                                                                               
                                                                                                                                
Mr.  Brown   indicated  that  his   late  father   had  been                                                                    
instrumental in  founding the Children's  Trust. He  and his                                                                    
spouse had Children's Trust license  plates on both of their                                                                    
cars.  He  would have  to  get  art  plates once  they  were                                                                    
available, which  he jokingly said  would be a  conflict. He                                                                    
relayed  that private  galleries did  not rent  art, rather,                                                                    
they  sold   it.  He  did   not  see  any   possible  unfair                                                                    
competition.                                                                                                                    
                                                                                                                                
Senator Olson suggested Mr. Brown get a second car.                                                                             
                                                                                                                                
Mr. Brown replied, "Maybe a third car."                                                                                         
                                                                                                                                
Co-Chair MacKinnon reminded members  and testifiers to relay                                                                    
their remarks  through the  chair. She  asked Representative                                                                    
Drummond  if she  had a  statement on  whether the  trustees                                                                    
should be  confirmed. Alaska  had several  corporations with                                                                    
trustees confirmed by the legislature  in state statute. She                                                                    
used the examples of  Alaska Gasline Development Corporation                                                                    
(AGDC) and  the Alaska  Housing Finance  Corporation (AHFC).                                                                    
Additionally,  Alaska had  some corporations  whose trustees                                                                    
were  not  confirmed  such  as  the  Alaska  Permanent  Fund                                                                    
Corporation.                                                                                                                    
                                                                                                                                
Representative  Drummond  did not  have  an  opinion on  the                                                                    
matter. She  thought there  were 11  members on  the council                                                                    
each having  an area of  expertise defined in the  bill. The                                                                    
idea was  for the  council to  best serve  the needs  of the                                                                    
organization. Skills in the area  of art were unique to that                                                                    
business.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon asked  if Mr.  Brown had  an opinion  on                                                                    
whether the council members should be confirmed.                                                                                
                                                                                                                                
Mr. Brown  relayed that the council  had researched examples                                                                    
from other  states and  jurisdictions. Some  council members                                                                    
were appointed  by legislative bodies.  In other  states the                                                                    
governor  appointed  members  who   were  confirmed  by  the                                                                    
legislature.  The  council  concluded  that  the  number  of                                                                    
council members  and the  way in  which they  were appointed                                                                    
worked well  for Alaska and did  not need to be  changed. He                                                                    
thanked Co-Chair MacKinnon for  the example of the Permanent                                                                    
Fund Board of Trustees.                                                                                                         
                                                                                                                                
Co-Chair MacKinnon  asked the  committee if  it was  of like                                                                    
mind that  there did not  need to  be a confirmation  at the                                                                    
legislative level for the new corporation.                                                                                      
                                                                                                                                
9:27:06 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  relayed that  public testimony  had been                                                                    
heard previously.                                                                                                               
                                                                                                                                
Co-Chair  MacKinnon MOVED  to ADOPT  Amendment  1 ((copy  on                                                                    
file):                                                                                                                          
                                                                                                                                
     Page 10, lines 16-17                                                                                                       
                                                                                                                                
          Delete "an Alaska veterans' preference that is                                                                        
          consistent with the Alaska veterans' preference                                                                       
          in AS 36.30.321(f)"                                                                                                   
                                                                                                                                
          Insert "the preferences of an Alaska bidder and                                                                       
          an Alaska veteran that are consistent with the                                                                        
          preferences in AS 36.30.32 1"                                                                                         
                                                                                                                                
Vice-Chair Bishop OJBJETED for discussion.                                                                                      
                                                                                                                                
Co-Chair MacKinnon explained that  there was a preference in                                                                    
the previous  version of the  bill. The amendment  would add                                                                    
the  Alaska  bidder preference.  She  thought  if there  was                                                                    
going to be a preference the others should be included.                                                                         
                                                                                                                                
9:27:47 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:31:09 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair   MacKinnon  confirmed   that  the   Alaska  bidder                                                                    
preference   was   combined   with  the   Alaska   Veteran's                                                                    
preference  consistent with  AS 36.30.321.  She wanted  both                                                                    
preferences  listed  to  ensure  that  local  artists  could                                                                    
compete with  national and international artists.  She would                                                                    
provide the definition of  "Alaska bidder preference" before                                                                    
the bill went to the Senate floor for a vote.                                                                                   
                                                                                                                                
Vice-Chair  Bishop WITHDREW  his OJBECTION.  There being  NO                                                                    
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
Vice-Chair  Bishop discussed  the  fiscal  note. The  fiscal                                                                    
note by  the Department  of Education and  Early Development                                                                    
with  an  appropriation of  commissions  and  boards and  an                                                                    
allocation of  the Alaska State  Council on the Arts  had an                                                                    
OMB  component number  of  192. It  was  essentially a  zero                                                                    
fiscal  note.  The fiscal  note  removed  all state  funding                                                                    
within the state council. The  funding was being transferred                                                                    
to the  new state  council appropriation. The  second fiscal                                                                    
note,  currently without  an OMB  component  number, had  an                                                                    
appropriation and allocation of  Alaska State Council on the                                                                    
Arts.  The annual  cost was  $2,768.5 million.  The analysis                                                                    
indicated that the positive impact  of cost reductions could                                                                    
not   be   determined   until   the   agency   restructured.                                                                    
Efficiencies that were anticipated  in operating costs could                                                                    
not be quantified at present.                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  commented  that  the  council  received                                                                    
funds and leveraged  other funds from out of  state from the                                                                    
National Arts Endowment.                                                                                                        
                                                                                                                                
9:34:10 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:34:22 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon conveyed  the  definition  of an  Alaska                                                                    
bidder in at AS 36.30.990:                                                                                                      
                                                                                                                                
      (2) "Alaska bidder" means a person who                                                                                    
        (A) holds a current Alaska business license;                                                                            
                                                                                                                                
        (B) submits  a bid or proposal  for goods, services,                                                                    
     or  construction  under  the   name  appearing  on  the                                                                    
     person's current Alaska business license;                                                                                  
                                                                                                                                
        (C) has maintained a place  of business in the state                                                                    
     staffed by the bidder or  offeror or an employee of the                                                                    
     bidder  or   offeror  for  a   period  of   six  months                                                                    
     immediately preceding the date of the bid or proposal;                                                                     
                                                                                                                                
        (D)  is incorporated  or  qualified  to do  business                                                                    
     under the laws  of the state, is  a sole proprietorship                                                                    
     and the  proprietor is  a resident of  the state,  is a                                                                    
     limited liability company organized  under AS 10.50 and                                                                    
     all  members  are  residents  of the  state,  or  is  a                                                                    
     partnership  under former  AS  32.05, AS  32.06, or  AS                                                                    
     32.11 and all partners are residents of the state; and                                                                     
                                                                                                                                
        (E)  if a  joint  venture, is  composed entirely  of                                                                    
     ventures  that   qualify  under  (A)      (D)  of  this                                                                    
     paragraph.                                                                                                                 
                                                                                                                                
Senator  Olson  asked  Co-Chair   MacKinnon  to  repeat  the                                                                    
statute reference.  Co-Chair MacKinnon repeated  the statute                                                                    
reference.                                                                                                                      
                                                                                                                                
Vice-Chair Bishop MOVED to report SCS HB 137(FIN) out of                                                                        
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
SCS HB 137 was REPORTED out of committee with a "do pass"                                                                       
recommendation and with two previously published fiscal                                                                         
impact notes: FN2 (EED) and FN3 (EED).                                                                                          
                                                                                                                                
9:36:13 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:38:11 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon discussed the schedule for the afternoon                                                                     
meeting.                                                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
SB 78 Amendment 1 Bishop.pdf SFIN 4/13/2017 9:00:00 AM
SB 78
HB 137 Amendment 1 MacKinnon.pdf SFIN 4/13/2017 9:00:00 AM
HB 137