Legislature(2003 - 2004)

04/14/2004 01:41 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                 SB 383-CHILDREN'S TRUST GRANTS                                                                             
The committee took up SB 383.                                                                                                   
MS.  MARGO  McCABE, Alaska  Children's  Trust  (ACT) Fund  Board,                                                               
testified from  Anchorage and explained  the four  key provisions                                                               
in  the  bill.    The  first  eliminates  the  $50,000  cap  that                                                               
currently  exists  in  granting   awards  to  potential  grantees                                                               
seeking funds  for programs eliminating  child abuse  and neglect                                                               
in Alaska;  the second requires  that the project include  a plan                                                               
for self-sufficiency  and program  maintenance; the  third limits                                                               
funding  to   four  years;  the   fourth  allows  the   board  to                                                               
discontinue grant awards when outcomes are not being achieved.                                                                  
SENATOR  LYDA GREEN  referenced page  2, line  10 that  says, "75                                                               
percent of  the first-year..."  and asked where  in the  bill the                                                               
$50,000 cap was removed.                                                                                                        
MS.  McCABE  confirmed  that  the   $50,000  provision  is  being                                                               
SENATOR GREEN asked if the whole section is being repealed.                                                                     
CHAIR DYSON noted this was Section 2.                                                                                           
SENATOR GREEN asked  why it's necessary to go from  50 to 75, and                                                               
wondered  if the  intent  is for  the grant  to  become the  sole                                                               
support for  this program, or  if the  project has energy  of its                                                               
own to create something that's being matched or added to.                                                                       
MS.  McCABE explained  that  one component  is  to eliminate  the                                                               
$50,000 cap.   Potential grantees can ask for a  small size grant                                                               
in the  amount of perhaps  $5,000, or in  an amount in  excess of                                                               
$50,000.   Second,  it relates  to self-sufficiency.   The  first                                                               
year, a grantee can apply for funds  to cover up to 75 percent of                                                               
program costs; in the second year  that amount can be 50 percent;                                                               
in  the  third and  fourth  year  that can  be  25  percent.   In                                                               
addition, ACT is asking that  there be a sustainability plan from                                                               
the  start  in order  to  ensure  that  the entities  have  plans                                                               
substantiating that the programs don't  go away after the funding                                                               
stops.   This provides  for greater  flexibility in  choosing the                                                               
recipients of grant awards.                                                                                                     
SENATOR GREEN asked  what might be the maximum amount  given to a                                                               
single entity if there isn't a cap.                                                                                             
MS.  McCABE said  it varies  in  different states.   The  average                                                               
grant across  the country  is about $50,000.   The  current board                                                               
favors  continuing  to  fund  the  smaller  grants.    There  are                                                               
opportunities to fund  larger programs, as seen  in other states.                                                               
She mentioned Missouri  as recently having an  average grant size                                                               
of $100,000 to  17 family-resource centers.   She reiterated that                                                               
a  maximum  or minimum  amount  is  not  being proposed  so  that                                                               
greater flexibility can be achieved.                                                                                            
SENATOR GRETCHEN  GUESS confirmed  that while  this might  be the                                                               
intent of  the current board, it  sets a precedent so  that there                                                               
could be  a grant for  $250,000 at  some future time.  That isn't                                                               
the intent of the trust or  statute, but it would be allowed with                                                               
this change.                                                                                                                    
MS. McCABE  responded that the  current board's thinking  "is not                                                               
that" and that  while concern regarding what  future boards would                                                               
do  is  necessary,  this  legislation would  open  the  door  for                                                               
private foundations  to give larger  amounts of money  that could                                                               
then be  turned around to  larger programs.   She said  the board                                                               
would  have to  exercise due  diligence in  making sure  that the                                                               
right  amount of  funds  go  to the  programs  most effective  in                                                               
combating this  problem.  She  said the current board  is capable                                                               
of making such  decisions, and she hopes the same  will hold true                                                               
with future boards.                                                                                                             
SENATOR GREEN  asked her  to repeat what  she said  about private                                                               
MS. McCABE  said, for example,  if a private foundation  chose to                                                               
give $100,000 but indicated that the  money needed to be spent by                                                               
the end of the year, or there  was some condition on it, it would                                                               
be hard  to break  that into  smaller grants  and turn  it around                                                               
quickly.  This legislation  would  allow for  the flexibility  to                                                               
issue  a larger  grant.   She  informed members  that a  $600,000                                                               
appropriation could  be coming to  the fund  in this cycle.   The                                                               
monies  would have  to be  spent  relatively soon  - possibly  by                                                               
September -  and the goal  would be to  spend the money  on small                                                               
community-based programs but  also to invest in  a media campaign                                                               
or some other  larger program that could help  combat the problem                                                               
of child abuse  and neglect.  She said that  is just one example,                                                               
and  the hope  is  that over  the  next few  years,  part of  the                                                               
strategic planning  process would  be to  attract larger  sums of                                                               
money from different entities  including private foundations, and                                                               
perhaps the federal government.                                                                                                 
SENATOR GUESS asked if the  current funding of the trust, besides                                                               
fund  raising, comes  from interest  payments from  the principal                                                               
that  was invested  somewhere in  line with  the permanent  fund.                                                               
She  questioned  whether  $600,000  could  be  deposited  in  the                                                               
principal so that  the board could use the interest  from that to                                                               
fund programs.                                                                                                                  
MS.  McCABE said  that wouldn't  be possible  in this  particular                                                               
case because  the money is  to be spent  in this fiscal  year, in                                                               
the  federal  government's  current appropriations  cycle.    She                                                               
thought specific  language in that particular  allocation says it                                                               
can't be added  to principal, but needs to be  spent on programs.                                                               
She  said it  could be  that future  appropriations or  donations                                                               
from private trusts are not worded that way.                                                                                    
SENATOR  WILKEN said  he had  three  questions, and  he began  by                                                               
asking  whether the  trustees  support SB  383  because they  are                                                               
referred to obliquely in the sponsor statement.                                                                                 
MS.  McCABE responded  that the  current  board of  the ACT  fund                                                               
supports  the bill.   The  thinking is  that it  provides greater                                                               
flexibility to the board in  the grant-giving process, and allows                                                               
for more responsiveness to community  needs and allows for grants                                                               
of  all  sizes.    Particularly,  the  pieces  that  require  the                                                               
sustainability plan and  the ability of the  board to discontinue                                                               
grants if objectives  aren't met will help to  ensure that monies                                                               
are being spent  appropriately on programs that will  help to end                                                               
this problem.                                                                                                                   
SENATOR  WILKEN asked  how the  trust has  interfaced with  other                                                               
funding sources, for  example the Rasmussen Foundation.   He said                                                               
he  was  going  to  request a  letter  regarding  another  issue;                                                               
perhaps  the answer  to that  question could  be included  in the                                                               
letter.   He then asked how  the Children's Trust money  has been                                                               
leveraged in the past to access other capital pools.                                                                            
MS. McCABE asked if he wanted her to respond at this time.                                                                      
SENATOR  WILKEN said  no,  but that  since SB  383  was going  to                                                               
Senate Finance, he would appreciate  an answer at that time along                                                               
with the letter  having to do with the '05  grants.  He expressed                                                               
concern as  to why  the '05 grants  haven't yet  been designated.                                                               
That was  brought to  his attention from  folks in  Fairbanks, he                                                               
said.   He wrote a letter  to the commissioner about  a month ago                                                               
inquiring as to  the status; he asked Ms. McCabe  to follow up on                                                               
that letter  so that when  the bill  comes to Finance,  she could                                                               
provide him  with an answer as  to the status of  the '05 grants,                                                               
the  intent of  the department,  and the  answer to  the leverage                                                               
MS. McCABE agreed to do so.                                                                                                     
SENATOR  GREEN  asked  if  the  entire  funding  package  of  the                                                               
Children's  Trust  goes  through  the regular  process  with  the                                                               
capital  budget or  if  it's  possible to  dispose  of and  award                                                               
grants outside the legislative budget process.                                                                                  
SENATOR  WILKEN said  he believes  it  is outside  of the  budget                                                               
process  and it's  not in  the capital  or operating  budgets. He                                                               
asked Ms. McCabe if this is correct.                                                                                            
MS. McCABE said the fund is  a separate entity and that "we spend                                                               
the net income of it."                                                                                                          
SENATOR GREEN  said she has seen  a report for the  year after it                                                               
came  back, so  she would  also like  an updated  report of  what                                                               
happened in the last two years.                                                                                                 
SENATOR WILKEN asked  if the status of grants in  the last couple                                                               
of years would be available.                                                                                                    
MS.  McCABE said  absolutely,  that the  annual  report was  just                                                               
prepared.   She said she  had the information available,  but was                                                               
happy  to  put  it  in letter  format  with  additional  detailed                                                               
information on the grants for the Finance Committee.                                                                            
SENATOR WILKEN  said he  would also pass  that information  on to                                                               
people in Fairbanks who expressed the concern.                                                                                  
CHAIR DYSON noted Senator Wilken's  presumption that SB 383 would                                                               
pass out  of committee today  was probably true.   He said  if or                                                               
when  it  gets  to  Finance,  he   would  enjoy  a  list  of  the                                                               
recipients.  Since President Bush  and Alaska's administration is                                                               
so  interested   in  involving   the  faith-based   community  in                                                               
providing human  services, he was particularly  interested to see                                                               
if   the  Children's   Trust  has   involved  folks   from  those                                                               
communities, or not.                                                                                                            
SENATOR GREEN asked  if there were enough applicants  to fill the                                                               
$600,000 request, or if they were not up to par.                                                                                
MS.  McCABE  said  unfortunately  the  money  has  not  yet  been                                                               
received.  If  it comes, it would  be in June or  July because of                                                               
delays  in  Congress in  passing  appropriation  bills this  past                                                               
year.   Because  the  fiscal year  ends  around September,  those                                                               
funds would  need to be spent  by then.  In  that 3-month period,                                                               
an RFP would  need to be submitted, and  potential grantees would                                                               
need  to  respond.   There  could  be  a  lot of  responses  from                                                               
different  entities  for smaller  projects,  and  there would  be                                                               
support  for those  if they  met the  objectives.   She expressed                                                               
wanting to  retain flexibility to  work on some  larger projects.                                                               
A media campaign  is a very interesting project  because it could                                                               
heighten awareness  of the  problem, and  provide a  resource for                                                               
people to  turn to.  She  noted that Rebecca Parker  reminded her                                                               
that  the media  campaign  could be  used  to leverage  obtaining                                                               
additional funds  into the trust  by promoting the  trust itself,                                                               
and making it known that contributions are accepted.                                                                            
SENATOR GREEN asked if the $600,000 is from federal dollars.                                                                    
MS. McCABE said yes.                                                                                                            
SENATOR GREEN said  very often there is a waiver  provision or an                                                               
extension, and wondered if this was a possibility.                                                                              
MS.  McCABE  said they  would  pursue  that.   The  board  didn't                                                               
actively solicit these  monies and they are trying  to figure out                                                               
how to work with and use them  and make sure they are meeting the                                                               
requirements if those  funds materialize.  In the  next couple of                                                               
years,  the strategic  plan includes  becoming more  proactive in                                                               
looking for monies  like this from private  foundations and other                                                               
entities.   The board is  trying to understand the  process right                                                               
SENATOR GREEN  asked, "Have you put  the word on the  street that                                                               
this is a possibility?"                                                                                                         
MS.  McCABE said,  "No,  we haven't  wanted  to disseminate  that                                                               
information until  we're sure it's  going to be deposited  in the                                                               
SENATOR GUESS referred  to Section 1, line 4, "the  net income of                                                               
the  trust" and  mentioned the  use of  the interest  off of  the                                                               
trust.  She asked why the  $600,000 couldn't go to the principal,                                                               
but "that's not net income, that  would be outside of that."  She                                                               
asked if  the Children's  Trust couldn't use  that money  for the                                                               
media campaign  because it has to  award a grant to  someone else                                                               
for that  media campaign, and that  campaign has to have  a self-                                                               
sufficient proposal.   If the  grant comes through, she  said she                                                               
was confused  whether the Children's  Trust or a  grant recipient                                                               
would  do  that  media  campaign,  and how  such  a  large  media                                                               
campaign would be sustained over time.                                                                                          
MS. McCABE  responded that  the board  hasn't decided  where that                                                               
money  might  go,  but  she  thinks  it  would  go  toward  small                                                               
community-based  grants  as  well  as   something  like  a  media                                                               
campaign.  In  current statute, there is some  leeway in spending                                                               
money to promote  the fund.  Also, there  are other organizations                                                               
interested in this idea that could be  a grant as well.  Like the                                                               
tobacco prevention  campaign, which was  an alliance of  a number                                                               
of  different entities,  and  was funded  in  part through  grant                                                               
monies.   It could go that  route as well. She  advised that they                                                               
would  meet on  April  30  to review  the  current  grant and  to                                                               
address some of these issues.                                                                                                   
CHAIR DYSON  agreed that Senator  Guess's question  regarding the                                                               
language on  page 1,  line 4,  "In awarding  grants from  the net                                                               
income..." allows  them to  be a  pass-through agency  for grants                                                               
authorized  for other  organizations.   He  said  what the  trust                                                               
wants to  do is probably fine,  in general.  He  could argue that                                                               
Senator Guess's  concern could be  better dealt with  in Finance,                                                               
so  the bill  could  either be  passed along  to  deal with  that                                                               
issue, or  it could be  set aside  and addressed on  Friday while                                                               
the  language  gets  fixed.    He asked  Senator  Guess  for  she                                                               
SENATOR GUESS  noted that neither  she nor Senator Davis  were on                                                               
the Finance Committee.                                                                                                          
SENATOR  GREEN read  from  AS 37.14.200,  "the  principal of  the                                                               
trust  consists of  legislative appropriations  to the  trust and                                                               
gifts, bequests, and  contributions of cash or  other assets from                                                               
a person"  and asked if the  government could be considered  as a                                                               
"person" and  said this  implied that  the contribution  would go                                                               
into the principal. This needs addressing, she said.                                                                            
CHAIR DYSON asked Kaye Saxon if she would speak to this concern.                                                                
MS.  KAYE SAXON,  Alaska Children's  Trust Board,  testified from                                                               
the  Mat-Su and  emphasized that  removing the  $50,000 cap  will                                                               
allow flexibility  regarding the monies  they do have.   She said                                                               
there are many new trustees on  the board who were trying to find                                                               
their footing and determine parameters.                                                                                         
CHAIR DYSON suggested that Senator  Guess was correct in assuming                                                               
that  the  $600,000 could  not  be  used  as a  pass-through,  so                                                               
perhaps the trust board could  propose an amendment that could be                                                               
addressed in the Finance Committee.                                                                                             
SENATOR BETTYE  DAVIS suggested this  issue be dealt with  in the                                                               
Finance Committee.                                                                                                              
CHAIR  DYSON  stated  that  Senator  Guess  raised  an  excellent                                                               
SENATOR  DAVIS moved  to  report  SB 383  out  of committee  with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
CHAIR  DYSON  asked if  there  was  any  objection.   Seeing  and                                                               
hearing none, it was so ordered.                                                                                                

Document Name Date/Time Subjects